Soybean extruder opens
new doors for Dakota co-op
By Pamela J. Karg
Even large farms and organizations are finding they
need to make changes to adapt to new market realities.
Influences such as population patterns, transportation
costs and weather trends were among the factors Cooperative
Agricultural Services (CO-AG) in South Dakota started
to examine in 2001. This study eventually led the co-op to
add a soybean extruder to its operations to produce its own
feed and oil. This not only helps to boost producer income,
it is helping strengthen the local economy.
“Farmers were aging and retiring, and the next generation
was moving elsewhere for non-farm jobs,” says CO-AG
feedmill manager Mike Bucher. “We needed to make some
changes to keep farming viable in our area and to keep the
economic infrastructure that was slowly
crumbling away.” He worked diligently on
the project to bring it to fruition.
Soybeans are a good clean-up crop
after corn. However, corn requires more
water than soybeans. With parts of the
area experiencing nine years of drought,
the Ogallala aquifer (the underground
water supply) is showing signs of decline.
Water restrictions make the future of irrigation
here iffy, at best, explains Duane
Cheney, coordinator for the Western
Prairie RC&D Area Council.
“I think we all saw a need for a change,” Cheney says.
“Even though there’s an ethanol plant just down the road,
we needed an alternate crop to corn that required less
water as well as a way to add value to what we were producing
here. With the majority of the soybean crop being
exported from the area for processing, we needed to add
something that would keep the dollars in our community.”
The cooperative has always transported its members’
soybeans 300 miles to a terminal. It then hauled soybean
meal from 400 miles away to meet the needs of cattle feedlots,
corporate hog farms and large-scale dairies in northwestern
Kansas and eastern Colorado, explains Bucher.
At a board retreat, he suggested adding a soybean
extruder to make soy meal and oil. The cooperative had
room in its existing Grinnell, Kan., feedmill, which made it
easier and less expensive to construct. But more research
was needed to determine if it was the right investment for
the area.
The co-op turned to the Western Prairie RC&D for assistance,
which eventually garnered the cooperative nearly
$1.2 million from a USDA Rural Development’s Value-Added
Producer Grant, and funds from the Kansas State Department
of Commerce and Housing, and a local utility. About
half the $1.2 million — $520,000 — came from USDA.
The money was used in part to study the market as well
as the feasibility of converting an unused portion of the
cooperative’s existing processing facilities for bean crushing.
The studies determined that soybean processing could
be a solid business venture for the co-op.
Bucher and Cheney agree the extruder has not only
helped the cooperative, but the economy of the entire area.
First, it helped farmers change
their thoughts about what crops to
plant at an important time. Now, with
soybeans that require less irrigation
and rain, farmers are hoping the odds
are in their favor.
Second, the extruder allows producers
and the cooperative to lower
transportation costs and create jobs —
it initially added four jobs in this town
of 339 people. Bucher, the son of a
retired truck driver, notes that while
corn needs little or no processing for
use as livestock feed, soybeans must be converted into a
more edible form. Locally grown soybeans are now delivered
to the local mill for processing.
“One of our concerns was how to slow down the outmigration
we were seeing in this area,” Cheney says.
“Could we draw in big industry? That would be hard to do
with little water to support it.” But it can certainly support
smaller, less-water-demanding industries.
Third, the extruder created more agricultural infrastructure
to serve the livestock farms already here, as well as
those looking to expand or even relocate to the area. As an
example, Bucher points out that the cooperative’s fleet of
semitrucks now haul finished soy meal — rather than raw
soybeans — 300 miles to eastern Colorado’s expanding
livestock farms.
“I don’t know if this one project is saving the family
farm,” says Bucher. “It’s going to take more than just this —
like getting a break in the weather pattern around here. But
I think the cooperative’s move to put in the extruder is part
of the solution for a lot of issues we’re facing.”
