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Pocket of Opportunity

Perham, Minn. – Central Minnesota farmers are turning up the heat on plans that have been simmering for years to build a soybean-processing facility.

“We started talking several years ago, looking for ways to add value to our soybeans,” says Terry Wagenman, a member of the Central Minnesota Soybean Processors.

With 27 million bushels of soybeans produced in the eight-county area and a large concentration of livestock facilities that need soybean meal, producers are in a “pocket of opportunity,” Wagenman says. The idea “went to sleep for a few years, but now we’re to the point of looking into feasibility.”

Wagenman chairs the co-op’s five-member steering committee that is investigating a 2-million-bushel-per-year facility. About 50 to 100 producers would be needed to supply the soy-crushing plant, which would separate oil and meal.

Using advanced processing technologies, the cooperative would produce high-protein and full-fat soybean meal for livestock, and may also process organic soybeans.

The region around Otter Tail County has a fairly high concentration of livestock – hogs, dairy, poultry – all potential markets for soybean meal. With no crushing facility in the area, most of the meal has to be brought in.

At the same time, most soybeans grown here are shipped out by train and processed elsewhere. A local facility would keep more value close to home, Wagenman says.

Central Minnesota Soybean Processors members have met with potential end users and determined there is interest in the local marketplace, Wagenman says.

“We’re confident we have a niche market … we need to do the feasibility work to get the full feel for the marketplace.”

While the co-op “isn’t looking at being world leaders in soy processing,” says Michael Sparby, AURI project development director, it “has done a good job identifying who potential end users are because (members) know where some of their products would go.”There is a fairly large concentration of livestock in the area and it’s one of the farthest concentrations from a crush facility. Hopefully they can take advantage of lower costs for transportation.”

Wagenman expects the feasibility analysis to be completed after the fall harvest. If the results are favorable and investors are attracted to their plan, construction could begin in the spring of 2005.