| What is a new generation
cooperative? Like all cooperatives, new generation
cooperatives are producer-owned and controlled. Unlike traditional co-ops with their open
memberships, new generation cooperatives have a defined membership that's linked to the
optimal capacity of the processing plant. How will farmers participate? Producers will buy stocks in the cooperative up front. They participate by having a responsibility to deliver the quantity of soybeans that represent their ownership in the plant. For example, if a producer owns 5,000 shares of stock, the producer must deliver 5,000 bushels of soybeans to the processing plant during the processing year. The producer receives a dividend at the end of the year based on the profitability of the plant and his percentage of ownership. What will be the farmers' investment? Assuming the producers have full ownership of the plant, their combined investment would be 40 percent of the capital cost to construct and start-up the plant. If the capital cost is $22.5 million then their investment would be $9 million. The remaining $13.5 million would be financed. Based on the 9 million bushel capacity of the processing plant, the farmer's investment would be $1 per bushel. Who will run this new generation cooperative? Farmers will be in charge of the decisions for the cooperative. They will elect a board of directors. The board will hire a company to be responsible for the construction, start-up and day-to-day management of the cooperative. What will be the location? The actual site of the plant has not yet been selected. The feasibility study indicates the ideal location would be near Chillicothe, Mo. What will be the price advantage for local soybean growers? The primary cost advantage to producers will be reduced transportation costs to the processing plant. This could be as much as a $.05-$.15 per bushel increase in price. What will be the primary market for the soybeans? The primary market for soybean meal will be local livestock feed mills. The soybean oil will be marketed to refiners in the Midwest. How will this plant compete with other plants? The primary method of competition with other processors will be the development of niche markets for identity-preserved soybean products. The processing of identity-preserved soybeans in existing large processing plants is difficult. The disruption of the continuous process used in these large plants makes small quantities of identity-preserved soybeans costly to process. How will the plant handle identity-preserved soybeans? The processing plant is designed for processing both commodity soybeans and identity-preserved soybeans. Because of the new design, it will take less than one hour to change between one type of soybeans to another. In current plants it can take days to switch between one identity-preserved product to another. How many bushels of soybeans will the plant use each year? The plant is designed to process 9 million bushels a year. That is based on processing 26,667 bushels per day for an average of 337 days per year of processing time and 28 days of downtime. What is the time line? A producer education campaign will take place through the fall of 1999. A board of directors will be selected from soybean producers interested in leading the project. As early as harvest 1999, the group could begin soliciting for memberships. After the membership soliciting ends, the plant construction will begin. It will take approximately 14 months to complete the plant once construction starts.
For additional information on the Northwest Missouri Soybean Processing Plant Cooperative, contact Stephanie Gable, public relations director for the Missouri Soybean Association 573-635-3819.
This page was last editied: 12/18/99 |
