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‘All about added value’

Worthington, Minn. — Okabena farmer Paul Henning won’t settle for selling raw commodities. He’s involved instead in several ventures, including the newly formed Minnesota Soybean Processors cooperative.

“It’s all about added value,” says Henning, MnSP’s treasurer. “Farming is a struggle, so if we can put an extra 30 cents onto each bushel we sell, we’ve done something to help ourselves.”

Minnesota Soybean Processors, owned by a group of southwestern Minnesota farmers, is in the early stages of building a soybean crushing facility in the Brewster, Minn. area. MnSP envisions a plant processing 100,000 bushels per day, on line in two to three years.

Bob Kirchner, now the cooperative’s president, was one of the first involved in discussions that began more than two years ago. “We got together to discuss our own plant modeled after the South Dakota Soybean Processors plant in Volga, S.D. Our first step was to study the feasibility of a similar facility in our region. That came back in December of 1999, and the results were positive.”

MnSP sought the input and guidance of their neighbors to the west in that study, partially funded by AURI but conducted by the South Dakota Soybean Processors. The relationship has since blossomed into a five-year management and marketing agreement that will make the two plants cooperators rather than competitors.

“The number one advantage is that we are using experienced people to help with our equity drive, plus we have management on board to help us avoid some mistakes,” Kirchner says. “Normally you don’t gain that experience until you’re partly through the process. They’re already successfully operating a plant.”

Kirchner says co-management will save each enterprise about a half million dollars a year. Plus, the plants will market meal and oil products together rather than competing against one another. The Volga plant and the proposed Brewster facility are on separate rail lines so they will serve different markets.

“Climbing up the food chain is the only way producers can capture value,” says AURI scientist Max Norris. “Converting soybeans into meal and oil will help these producers capture the value locally.”

So far, the co-op’s equity drive has raised several million dollars in construction capital. The goal is to have as many as a thousand producers co-owning the plant.

Both the Minnesota and South Dakota Soybean Processors share the goal of returning value-added profits directly to farmers, with a policy of paying a minimum of 70 percent of the current year’s profit to producers.

Kirchner hopes that will be music to farmers’ ears because “our driving motivation is to return the value back to the farm.”

For more information, contact the Minnesota Soybean Processors at P.O. Box 100, Brewster, MN 56119-0100, phone (507) 343-6677 or check the Web site: