WI soybean processing would benefit state farmers

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 site and build a plant.

The state’s 11,000 soybean farmers already grow an ample supply of soybeans 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,” said Patrick Mullooly, a Clinton, WI, 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.

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 US Department of Agriculture statics, 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 percent due in large part to higher yields. Latest forecasts from USDA estimate Wisconsin soybean production in 2017 at an estimated 101 million bushels on a record 2.14 million acres. Wisconsin growers recorded their largest soybean crop in 2016, with 107.3 total bushels.

Currently, the vast majority soybeans raised in Wisconsin leave, either for further processing or to export markets as whole beans. A soybean processing plant would use approximately 20 percent of the soybeans grown in the state to produce high-protein meal and high-fiber hulls for feed long with soybean oil.

Raising soybeans also offer corn farmers a rotational option that can improve the sustainability of cropping.

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.

“The greatest risk factors facing this project are the price and availability of soybeans and the marketing of soybean meal, but those are risks Wisconsin farmers inevitably face today anyway,” says Mullooly.  “Also, soybean prices and the value of the meal, oil and hulls that result from processing are interrelated, which significantly reduces those risks. Based on the study’s analysis, a solvent extraction plant that processes or crushes soybeans is financially, economically and technically feasible.”

The feasibility study concludes that based on competition for and availability of soybeans, Wisconsin could support a solvent extraction (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 of biodegradable plastics and adhesives.

The initial study noted that going forward the project would need to identify a specific site and undertake a preliminary engineering study to determine a more precise estimate of the project scope and estimated capital cost. WSMB currently is willing to work with groups to put a plan together.

Interested investors should call Bob Karl at the Wisconsin Soybean program office, 608-274-7522 or email karls@wisoybean.org.