The town of Lilbourn, Mo., wanted good news. So, seizing on an opportunity, it created some. This story is about a fledgling co-op, Great River Soybean Processing, and a hopeful town on the Bootheel's river side. It's about a struggling Missouri Delta community pulling out all the stops to improve itself.

Around Lilbourn (some five miles from New Madrid) there are a “couple of large manufacturers that employ many good people,” says Gary Branum. “They help keep our community alive. Without them, I'd hate to think what would happen around here.”

Still, more jobs are needed. To provide them, Lilbourn offered those forming the co-op free industrial park acreage. Further sweetening the offer, grants for rail-line spur access and sewer and water lines were also obtained.

“How great is that?!” says Branum, a farmer and co-op board president. “We'd be crazy not to take them up on it.”

Brain-stormers

The “brain-stormers” on the co-op project were Mary and Peter Myers. “They believed this would be good for the Bootheel, they had the original vision and the drive,” says Branum.

Actually, says Peter Myers, it was his wife who came up with the idea several years ago. “She was trying to figure out how we could add value to what we were producing. It hit her, ‘Why not have a soybean processing plant — a co-op?’ This fit with the situation here — we produce 30 million bushels of soybeans in the Bootheel.”

A small federal grant was procured for a feasibility study. The study showed such a co-op would work in the area. The grant also covered legal work, which is substantial in setting up a co-op.

“By the end of last summer, we had the legal work done,” says Myers who, besides being a long-time farmer, is chairman of Missouri's House Agriculture Committee. “We're now in the process of selling shares in the co-op.”

The project is important to the area and helps explain why Lilbourn backs the plans, says Myers. Initially, at least 37 area residents will be hired.

“These will be good jobs, mostly full-time,” says Myers. “Workers, except for four or five, won't need to be highly skilled. They can grow into the job. Plus, there will be extra work for those hauling meal and oil.

“This area is typical of rural areas in the Delta — small towns struggling to stay afloat. We need economic development. The jobs that are created here will be just as important as the value we add to farmers' soybeans.”

This co-op is a “practical idea that has worked out incredibly well,” says Branum. “The idea is to do something helpful and positive. We need good news around here.”

The project has been an education, say all involved. This is especially true for those impatient to get the co-op built.

“Let me tell you,” says Branum. “this has been in the works for probably 18 months. We'd like to begin building this fall and be open in the spring of 2005. If that happens, it would be great. But I'm not as green as I once was. All of us being new at this, we thought we'd be able to work on the co-op for a year and be ready to go. That isn't how the process goes, though, and we found that out quickly. But we're pushing through.”

The plant

Once running, the co-op will crush 3 million bushels of soybeans annually. The plant will crush six days per week, 24 hours per day. It won't be a huge operation, but if business picks up, “we can double the size pretty quickly,” says Branum. “The building we're planning will be able to handle another three extruders if we decide to go that direction.”

The co-op will be sitting on I-55, the Mississippi River is close by and “we've got a good rail system that runs right alongside. Right off the bat, we want to tap into the different animal-feed markets: hog operations, poultry operations, whatever.”

A Tyson feed mill is located within 20 miles of proposed co-op. “They'll use every bit of our soybean meal,” says Myers.

The long-term goal, though, is to work into being a soy-diesel plant. “We feel that bio-diesel is the fuel of the future,” says Myers. “We want to tap into that market. If we go that route, it will be much cheaper to put together than the processing plant has been.”

Branum says he hopes to have a bio-diesel operation working in the next few years. “Right now, we'll have to ship out the oil from crushed beans. If, instead of shipping it out, we can set up a soy-diesel operation on that land, it would be great. With the price of fuel currently, it just makes sense. Right now, the bio-diesel looks like a win/win proposition for the farmer and consumer.”

Farmer-friendly

Myers says the co-op board is full of good, common-sense folks.

“If a farmer has a good idea, we're flexible — if it'll work, we want to co-op to be able to do it,” says Branum. “The co-op, we're hoping, will service farms in a 50-mile radius. And everyone is invited, no one is excluded.”

Around $250,000 worth of memberships have been sold thus far. The books are still open.

“We'd like to sell 1,500 memberships at $1,000 each,” says Branum. “A place at the table in this co-op costs much less than others. Most new-generation co-op memberships run between $15,000 and $30,000 — and there's nothing wrong with that. With this co-op, though, we wanted to allow all farmers — regardless of the size of their operation — to have a stake.”

The co-op flexibility was in evidence recently. A contract stipulation said that a farmer wanting a share had to deliver 1,500 bushels of soybeans to the plant.

That was changed, says Branum, “because farmers 40 miles away wanted in, but they didn't want to haul truckloads in from that far. So, we just changed the stipulation.”

If a farmer becomes a member, his money is put in escrow and won't be touched until building begins. That means if something disastrous happens and building isn't started, each farmer's money is returned and no one will be out his investment.

A further inducement to buy shares is a special program for Missouri's value-added co-ops. Once the co-op has begun, an investor can get 50 percent of his share's cost back through tax credits.

As the shares are sold, investors are told two things, says Myers. “First, when we start breaking ground to build the plant, you can apply for that 50 percent tax credit. Second, if for some reason the plant isn't built, you will have your money refunded — all of it. So come aboard, we need you.”


e-mail: dbennett@primediabusiness.com