Ag Processing Inc., a large farmer-owned cooperative, announced last week that it has signed a Letter of Intent regarding the purchase of the assets of the former East Fork Biodiesel LLC plant near Algona in northern Iowa. The plant, which is currently idle, has a rated capacity of 60 million gallons of biodiesel production annually.
AGP anticipates that the facility will be operational on or before September 1, 2011 creating 31 new jobs and new economic activity in the community while expanding the cooperative's presence in the renewable fuels industry.
AGP was the first company in the United States to construct a purpose-built soy biodiesel plant at Sergeant Bluff, Iowa in 1996. The cooperative constructed a second soy biodiesel plant at St. Joseph, Missouri in 2007. These two plants have a combined annual capacity of 60 million gallons of biodiesel.
AGP is long-term supporter of renewable fuels, particularly biodiesel
"AGP is a long-term supporter of the renewable fuels industry, particularly soy biodiesel, which complements our soybean processing platform," says AGP CEO Marty Reagan. "Soy biodiesel reduces our nation's dependence on foreign oil while strengthening Midwestern agriculture and rural communities."
AGP is a regionally federated cooperative owned by 185 local cooperatives in the U.S. representing 250,000 farmers. The company has nine soybean processing plants including six in Iowa, and is a leading vegetable oil refiner. Corporate headquarters are located in Omaha, Nebraska.
The Algona biodiesel plant was built in 2007 but never began operation because of high soybean oil costs at the time its construction was completed. Unlike many other biodiesel plants, the Algona plant did not have the system to allow it to use other feedstocks such as animal fats to make biodiesel. This plant was built to use soybean oil exclusively.
A number of local Iowans and farmers originally bought stock
The announcement by AGP last week didn't mention the purchase price. The plant was built for $63 million, and is most recent owner was listed as Enservation Advisors of New York. A number of individual investors from Iowa, including many local farmers, had originally bought stock to raise money to build the East Fork Biodiesel plant. They lost their money when the lender called in the loans and the plant went bankrupt before it could start making any biodiesel.
Biodiesel hasn't enjoyed economic growth like ethanol has, as ethanol has benefited from federal mandates for usage. But, biodiesel now has a national mandate of 800 million gallons per year, which will grow to 1.2 billion gallons next year, as specified by the federal Renewable Fuels Standard. Biodiesel has also been boosted by reinstatement of the $1 per gallon federal tax credit to blenders of the biofuel, a tax credit Congress had allowed to expire at the end of 2009.
AGP is owned by 185 U.S. cooperatives representing 250,000 farmers. The company has nine soybean processing plants, including Iowa facilities at Emmetsburg, Eagle Grove, Mason City, Sheldon, Manning and Sergeant Bluff.