Georgia oilseed co-op to decide plant site

Leaders of Georgia’s new Farmers Oilseed Cooperative, Inc., (FOC) are expected to make a decision this month on a site for a proposed oilseed processing plant. The plant would crush soybeans, canola, peanuts and sunflower seed for oils and other products.

FOC leaders and others met with representatives of eight communities this past summer, and the co-op asked five to submit written proposals. They then narrowed the list of prospective sites down to four. The proposed $55 million processing plant would employ 55 to 60 people.

"They also continue to work on a stock offering that will be made after they identify a plant site," says George Shumaker, University of Georgia Extension economist who has advised the co-op throughout its development.

Grower interest in the co-op has remained steady throughout the 2002 production season, says Shumaker. "Co-op leaders will really crank up the stock offering campaign during the fall and winter production meetings," he adds.

While the co-op might be new to Georgia, it’s not an entirely new idea in production agriculture, notes Shumaker. "This concept has proven itself time and again in the Midwest. Farmers there recognize the value of joining together to enhance their profits. And Georgia farmers are just as smart as Illinois and Iowa farmers," says the economist.

The FOC was incorporated in May 2001, two years after the idea surfaced in Georgia. With 152 charter members from throughout the state, the co-op spent the past year developing a business plan, handling the legal paperwork required to make a stock sale and laying out the site requirements for the processing plant.

"They decided not to sell stock until they determined where the plant will be," says Shumaker. "The most common question they kept hearing was, ‘Where will the plant be?’"

The co-op had considered as many as 25 sites. They came up with about half of those on their own. The remainder were added by industry location specialists with the Georgia Electric Membership Corporation and the Georgia Department of Industry, Trade and Tourism.

When the co-op narrowed the list of sites to eight, FOC President Billy Wayne Sellers, site selection chair Ben Deal and Shumaker made a whirlwind tour to view the sites and meet with community representatives.

"All in all, the visits were very good," says Sellers. "We had some strong proposals. Now, the committee will have to sort through them and make the best decision for the farmers. It’s going to be a hard decision."

Once the final site is determined, the co-op will develop delivery points using existing grain elevators in areas remote from the plant, says Shumaker. This way, growers who are located away from the plant won’t have far to truck their crops.

Of the oilseeds the plant would process, only soybeans and peanuts are grown to any extent in Georgia. It’s hoped, however, that such a plant would encourage more farmers to grow canola.

Researchers have touted the profit potential of canola for several years now, but growers have had no nearby processing plant.

"It’s an ‘if you build it, they will come’ kind of thing," says Paul Raymer, University of Georgia Extension agronomist.

"We’ll have a small crop this year, and I expect the acreage to continue to grow fairly rapidly if the market opportunities come. The problem with growing canola in Georgia always has been the sporadic market," says Raymer, who has worked with the crop since the late 1980s.

Canola is at least as stable as anything else grown by Georgia farmers, he says. "In the 15 years I’ve worked with canola, I’ve lost only a handful of trials. I’ve lost a lot more corn, soybean and even wheat trials. Canola has been pretty consistent over the years."

The FOC facility would provide a canola market for farmers throughout Georgia. "Arrangements need to be made for consolidation points to allow growers statewide a nearby delivery point. The co-op board members agree with that in principle, but the details need to be worked out," says Raymer.

The most difficult aspect of growing canola in Georgia is its narrow planting window, he says. "You’ve got four weeks, from late October to late November, to seed it and get it established. The seeds can be harvested by late May. That’s early enough to plant soybeans or cotton after canola in a double-crop scheme."

Whether Georgia farmers grow canola, soybeans or peanuts, the crop’s value should be higher for co-op shareholders, says Shumaker.

"At current market prices — about $5 per bushel — soybean growers would get about 80 cents more per bushel by marketing through the co-op. Canola growers could add about $2.40 to the current $5 per bushel," says Shumaker.

"The farmer will own the product until it gets to the grocery shelves," says FOC President Sellers. "The added income from the processing is money farmers don’t ordinarily receive."

The co-op will buy oilseeds first from shareholders. Other farmers may be able to sell to the co-op, says Shumaker, but only shareholders will receive the added income for the processing.

Building the plant and beginning operations will require 750 to 800 shareholders with average commitments of 275 acres to the co-op. Minimum investments will be 1,500 shares at $2.25 per share.

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