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Grant for crush plant headed for other projects

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GINA R. HEINE
January 13, 2010
— A $4 million state grant designated to help build Wisconsin’s first soybean crushing facility in Evansville is now being doled out to other agricultural projects, and plans for the crush plant have been “mothballed.”

Landmark Services Cooperative had planned to build a $100 million soybean processing plant next to a planned biodiesel plant on Evansville’s eastside. When developers pulled the plug on the biodiesel project in May 2008, Landmark officials said plans would continue for the crush plant.


But the financial market’s meltdown and changes in commodity prices shelved the crush facility plans.


At the co-op’s annual meeting Tuesday, board president John Blaska delivered nearly the same news as the year before: Nothing’s changed.


Blaska said the crush plant is still “possible.”


“I wouldn’t use the word probable,” he later told the Gazette. “It’d be a long shot. Things have to change in the financial market, and I don’t see that happening (any time soon).”


Planning has been “mothballed,” but the board could “spring to action if we had a partner,” he said.


A groundbreaking had been projected for June 2009 after Gov. Jim Doyle announced a $4 million state grant for the project in April 2008.


The state gave Landmark an extension on the grant but ultimately included it in the 2009-11 budget for other agricultural projects. That’s still a win for farmers, Blaska said, because he doubted the money would stay in agriculture during the budget process.


A portion of the grant was spent on planning for the crush facility, leaving $3.5 million to $3.8 million that state officials now will distribute to several projects, said Lee Sensenbrenner, spokesman for the state Department of Agriculture, Trade and Consumer Protection.


After state officials realized the Evansville crush facility wasn’t going to happen, the state invited applications for projects to use the money fitting the following criteria:


-- Build a cheese co-op headquarters to process 1.5 million pounds of milk a day.


-- Build a soybean crush facility.


-- Add small-scale anaerobic digesters to individual farms to turn animal waste into electricity.


-- Diversify cheese making.


The state received applications for all except a crush facility, Sensenbrenner said. The state should be announcing grant recipients in the coming weeks, he said.


The need for a crush plant in Wisconsin remains, Blaska said.


A crush plant separates soybean oil from the rest of the bean. The soybean meal is sold as feed for livestock while the oil can be processed into biodiesel.


Landmark’s project faced too many challenges, Blaska said, including:


-- Difficulty obtaining commercial lending.


-- Potential investors not having cash to contribute to an equity drive.


-- Increased operating costs. When planning started, soybeans were around $6 a bushel. Now, the price is around $10.


-- Slim margins on a crush plant.


Wisconsin farmers send most of their beans for export through Chicago and import millions of tons of soybean meal for dairy and poultry, Blaska said. The crushed beans that come into the state usually are from Minnesota and Iowa, he said.



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