Biodiesel producers don't want to be held hostage by the ruthless world of commodity markets. The current demand for vegetable oils across the globe is unprecedented, and fuel producers don't want to get involved in bidding wars with food processors for feedstocks. Archer Daniels Midland Co. (ADM), Cargill and Bunge have significant crush holdings in North America, and as their biodiesel businesses get off the ground, they are proving that its advantageous to control the feedstock. 
 
 These conditions have spurred the development of more crushing facilities across the country, and many involve biodiesel businesses looking to become vertically integrated. It is important to remember that soybeans and canola aren't biodiesel feedstocks-their oils are-and most refineries aren't equipped to process raw materials. However, this situation may be changing as a rush of crush operation proposals move toward the construction phase.
 
 Some of the logistics of the past have been less than ideal. A recent feasibility study for a soy crush plant in Wisconsin, performed by the Wisconsin Soybean Program (WSP), revealed some startling results. With no crush facility in the state, nearly all of Wisconsin's soybeans are shipped abroad for sale in other markets. These circumstances seem strange considering that Wisconsin is one of the leading soybean producers and its dairy cows consume an estimated 800,000 tons of soybean meal annually; hogs and pigs take in another 99,000 tons per year. Still, the state's raw soybeans are shipped out-of-state for processing, and then shipped back in the form of feed for dairy cattle. This doesn't seem to make a lot of sense considering that "Wisconsin can absorb 83 percent of the plant's soybean meal production, a rather unique situation for a soybean processor," the WSP reported.
 
 A Wisconsin soybean processing plant can expect stiff competition from existing crush facilities that sell product there, specifically ADM and CHS Inc. in Mankato, Minn.; Cargill Inc. in Cedar Rapids, Iowa; and ADM in Galesburg, Ill. The localness of such a plant, however, makes building in south-central Wisconsin attractive and could be an advantage in the marketplace as freight costs continue to increase, the WSP study concluded. "It's a funny deal," said John Belasco, board president of Landmark Services Cooperative in Evansville, Wis., which commissioned the feasibility study. "Soybeans are shipped out to Chicago for exports, and then the meal is shipped in from Minnesota or Illinois for the dairy cattle."
 
 Landmark Services is considering locating a soybean crushing facility and biodiesel plant near its Evansville facility. Despite the significant opportunity that seems to exist for a crush facility in Wisconsin, Belasco said finding investors has been a challenge. "It's going to cost $100 million to build the thing," he said, adding that investors are currently seeking a 12 percent to 15 percent return on investment "At that [construction] price, the math says we'll be looking at a 6 percent to 10 percent return." Even though the feasibility study was positive, Belasco said it might not be positive enough. "We're still looking for the right formula," he said. 

 
 Also in the upper Midwest, Northstar Bioenergy LLC, an affiliate of Johnson Oil Co. in Hallock, Minn., announced plans to build a 30 MMgy biodiesel plant that will take in canola oil from an adjacent crushing facility. Likewise, Northern Prairie EnviroFuels LLC is in the development stages of a canola crushing facility and biodiesel plant in Cavalier County, N.D., according to Project Manager Mark Luther. The facility would process 275,000 to 300,000 tons of canola in order to produce 30 MMgy of biodiesel.

Landmark Services Cooperative is looking to build a soybean crushing operation and a biodiesel plant adjacent to its existing facility in Evansville, Wis.

Number of proposed oil crushing facilities rises

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Upcoming Events

2024 International Fuel Ethanol Workshop & Expo

Biodiesel Summit: Sustainable Aviation Fuel & Renewable Diesel

Carbon Capture & Storage Summit

North American SAF Conference & Expo

2025 International Biomass Conference & Expo

Number of proposed oil crushing facilities rises