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$4 million grant keeps Evansville crush facility plans moving

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GINA R. HEINE
April 9, 2008
— Landmark Services Co-op could break ground on the state’s first soybean crushing plant in Evansville by June 2009 with the help of a $4 million state grant announced Tuesday.

Gov. Jim Doyle awarded the grant to Landmark President John Blaska at the co-op’s Evansville facility.


“This is a great moment,” Doyle said, “and a major step forward for Wisconsin.”


Landmark will match the grant to help plan and build an $80 million plant that would process 80,000 bushels of soybeans a day, Blaska said. The plant would be on the city’s east side next to where construction on North Prairie Production’s biodiesel plant is stalled.


A crush plant separates soybean oil from the rest of the bean, and the oil can then be processed into biodiesel. Soybean meal is sold as feed for livestock. The state ranked 14th in the nation last year in soybean production with 51.9 million bushels, but Wisconsin is the only top-producing state without a crush facility.


The grant and Landmark’s matching dollars are intended for planning and development. If money remains, it would be used as seed money to attract other investments in the plant. Blaska could not yet say if construction is definite. Alternative plans for the grant are included in the agreement if a plant is not built, but “it all looks good” for building, he said.


If all goes right, construction would begin in June 2009 and take 12 to 18 months, he said.


The plant would create 30 to 40 jobs on site and many more indirectly, he said.


“It’s going to mean a lot to Wisconsin agriculture—not only soybean farmers, but livestock farmers,” he said.


He offered a look at the effects:


Wisconsin imports almost a million tons of soybean meal—much of it made from Wisconsin soybeans—from processing plants in neighboring states because it cannot be processed here. The proposed plant could produce 500,000 to 600,000 tons of soybean meal to be used in the state.


-- Wisconsin soybean farmers could see their average price of a bushel increase 15 to 20 cents because of reduced transportation costs, Blaska said.


-- Landmark sends about three trucks daily to Cedar Rapids, Iowa—the closest crush plant location—to collect about 75 tons of soybean meal, said Mike Halvensleben, transportation manager. That’s about $5,600 spent weekly on freight alone for the 330-mile round trip, he said, leaving an annual savings of nearly $300,000 if the meal is available next door.


Landmark has not decided on a business model for the $80 million plant, Blaska said. The co-op is looking for business partners and likely would hold an equity drive, he said.


Doyle commended the bipartisan effort of Rep. Brett Davis, R-Oregon, and Sen. Jon Erpenbach, D-Waunakee, who worked to include the grant in the state budget.


Mayor Sandy Decker said the plant is one more way the city can market itself as a renewable energy community—something local business people and leaders would like to see. The city already has a tax incremental financing district set up to help the project.


“The impacts here in the city and the region are going to be incredible,” she said.


Biodiesel plant construction still on hold

Construction on a $42 million biodiesel plant on Evansville’s east side still is on hold.


North Prairie Productions officials are waiting and watching for the price of soy oil to go down, company representative Randy Kyle said.


As long as a gallon of raw material costs almost more than the value of the finished product, construction will be on hold, he said.


A proposed neighboring soybean crush plant, which would provide soy oil to make the biodiesel, would give North Prairie an advantage only if the markets adjust overall, he said.


“Right now, it’s unlikely it’ll have much impact because a single crush plant isn’t going to change the overall economics of soybean oil and petroleum oil,” he said. “One plant isn’t going to change that.”


North Prairie is “evaluating alternatives” to soy oil, he said, but plans have not changed.


The company is doing what it can to conserve investors’ money, he said, “and position ourselves in a way that if the markets did change, we’d be in a position to move forward.”


North Prairie likely will have a member meeting soon, he said.



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