Wisconsin is well-suited to support a soybean processing plant that would benefit dairy farmers and other livestock producers, as well as the state’s crop farmers. That’s the conclusion of a feasibility study commissioned by the Wisconsin Soybean Marketing Board, whose directors are actively looking for investors to build a plant.
The state’s 11,000 soybean farmers already grow an ample supply of beans for a processing facility as proposed in the study conducted by Frazier, Barnes & Associates, an independent consulting group with vast experience in the oilseed processing industry. The study notes that Wisconsin also has sufficient truck, rail and barge capacity, along with easy access to feed and consumer markets for the meal, hulls and oil that a commercial soybean processing facility produces.
“Wisconsin farmers are growing more than 100 million bushels of soybeans annually and, because the state doesn’t have large-scale soybean processing, farmers are missing an opportunity to add value to their crop,” says Patrick Mullooly, a Clinton, Wis., farmer and president of the Wisconsin Soybean Marketing Board. “Our new study reinforces something we’ve suspected for a while. Processing soybeans in Wisconsin would be good for our state farmers and our state economy.
“Building a soybean crush plant in Wisconsin offers financial advantages for state dairy, hog and poultry farmers who can feed soybeans, as well as those who are growing soybeans by reducing transportation costs. Additionally, soybean processing can add local jobs, additional tax base and new opportunities for support businesses in the area around such a plant,” Mullooly says.
Robert Karls, executive director of the WSMB, says Wisconsin is the only Midwest state without a soybean crush facility.
“Michigan is about the same size as Wisconsin and has almost the same number of acres and farmers, and they built a soybean crush facility about 12 years ago in Zeeland, Mich.,” Karls says. “In the past year, they completed a second soybean crush facility in Ithaca, Mich. It is more than twice the size of the first one.”
Lots more beans
Soybeans are the second-largest source of income for Wisconsin crop farmers and a proven rotational crop that can help improve farm sustainability. According to USDA statistics, Wisconsin soybeans generate an estimated $67 million in revenue annually, with most production concentrated in the southern third of the state. While total state production has nearly doubled since 2000, planted acreage is up only 38%, due in large part to higher yields.
USDA estimates Wisconsin soybean production in 2017 at 101 million bushels on a record 2.14 million acres. Wisconsin growers recorded their largest soybean crop in 2016 with 107.3 million total bushels.
“Growers are doing a great job of producing soybeans,” Mullooly says. “Yields have been going up and are fantastic. The WSMB is always looking for options to grow our market. I think this is a good option for our growers to grow our market. The number of dairy cows and other livestock, including poultry and swine, makes this a great opportunity.”
Mullooly and his wife farm 2,300 acres with his family and his wife’s family in Rock and Walworth counties near the Illinois border.
“We grow about 1,000 acres of soybeans every year,” he says. “About half of them are non-GMO food-grade soybeans, and the rest are GMO soybeans.”
Mullooly believes a soybean crush plant would help not only Wisconsin crop farmers, but also the state’s 8,800 dairy farmers, who milk 1.2 million cows, as well as state hog and poultry producers.
“We hope we can keep up with the times and keep Wisconsin farmers thriving and continue moving forward,” he says. “Why don’t we have a crush plant with all of those livestock? It will help the dairy and livestock producers be more profitable, and offer another market for our soybean growers.”
Out of state
According to the feasibility study, the vast majority of soybeans raised in Wisconsin leave the state either for further processing or to be exported overseas as whole beans. A processing plant would use about 20% of the soybeans grown in the state to produce high-protein meal and high-fiber hulls for feed along with soybean oil.
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PRODUCTION DOUBLED: While total state soybean production has nearly doubled since 2000, planted acreage is up only 38%, due in large part to higher yields.
Past efforts to attract investors to build such a facility haven’t succeeded, primarily due to an overall economic slowdown, but the study suggests markets have since stabilized. Additionally, state soybean production has effectively doubled since 2000, when the last such feasibility study was conducted.
“Soybean prices and the value of the meal, oil and hulls that result from processing are interrelated, which significantly reduces risks. Based on the study’s analysis, a solvent extraction plant that processes or crushes soybeans is financially, economically and technically feasible,” Mullooly says. “The greatest risk factors facing this project are the price and availability of soybeans and the marketing of soybean meal, but those are risks marketers inevitably face today anyway.”
The feasibility study concludes that based on competition for and availability of soybeans, Wisconsin could support a crush plant with a processing capacity of 2,000 tons per day, or 22 million bushels of soybeans annually. Such a plant would produce 531,800 tons of soybean meal annually, 230 million pounds of soybean oil and 33,000 tons of soybean hulls. Wisconsin has sufficient dairy, swine and poultry numbers to consume that amount of meal and hulls, according to the study.
The study also notes that any new facility should have flexibility built into the process to allow processing of specialty varieties of soybeans with minimum downtime.
Typical extraction involves multiple stages of cracking, rolling, flaking and then washing the oil-laden soybean flakes with a petroleum solvent. With each step, more oil is removed, concentrated and pumped to a distillation process. Wet flakes are then heated with steam, dried, cooled and transferred to meal sizing as requested by customers. Oil is further processed or degummed and refined. Soybean oil is a vegetable oil used as an ingredient for cooking, biodiesel production and making biodegradable plastics and adhesives.
The initial study notes that going forward, the project would need to undertake a preliminary engineering study to determine more precise estimates of the project scope and capital cost. WSMB is willing to work with groups to put a plan together. Interested investors should call Karls at 608-274-7522 or email firstname.lastname@example.org.