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Published September 04, 2012, 10:22 AM

Minn-Dak Farmers Co-op will expand

The board of Minn-Dak Farmers Cooperative of Wahpeton, N.D., voted Aug. 28 to go ahead with a $70.3 million plan to build a molasses desugarization plant as an add-on to its sugar beet factory.

By: Mikkel Pates, Agweek

FARGO, N.D. — The board of Minn-Dak Farmers Cooperative of Wahpeton, N.D., voted Aug. 28 to go ahead with a $70.3 million plan to build a molasses desugarization plant as an add-on to its sugar beet factory.

The desugarization and load-out facility will be a major expansion of the plant, says David Roche, the company’s president and chief executive. It will add 20 additional jobs. The two-year construction period will begin in September.

Roche says the project will have a five-year Richland County tax exemption at 100 percent, and another five years at 50 percent. It will have interest rate buy-downs from the state, and a use-tax exemption, among other assistance.

Minn-Dak harvested and processed a record 3.1 million tons of sugar beets in 2010, based on 114,500 acres of beets and a 27.1 ton per acre average. This year’s crop could be beyond that, Roche says, but he declines to say how much. “This year, the current issue is how many beets to take,” he says. “The forecasted size of our crop could exceed our processing capacity.”

Since the 2010 record crop, Minn-Dak has installed additional ventilation capacity. The board is concerned about pushing the slice campaign too far into May. He says the company could process “a tad more” than the 2010 record.

The record

The 2010 crop produced 123,000 tons of molasses byproduct, of which 25,000 tons was used by the company’s Minn-Dak Yeast Co. Inc. That leaves 100,000 tons of molasses that could go through a desugarization process, which yields about 990,000 hundredweights of sugar.

“We could sell the molasses at a pretty good price, but it’s not as good as for sugar,” Roche says.

At current sugar selling prices of $34 per hundredweight, that’s about $34 million, he says. Molasses is worth about half of what it’s worth as sugar. “But there’s a major capital investment and there are risks in terms of governmental programs,” Roche says.

Minn-Dak Farmers’ molasses desugarization expansion means that only one sugar beet company in the United States — Wyoming Sugar Co. of Worland, Wyo. — won’t have that capability. American Crystal Sugar Co., Southern Minnesota Beet Sugar Co., and all of the rest, have already installed that capability.

When other companies were installing their desugarization plants in the late 1990s, Minn-Dak was investing in expanding its slicing capacity and acres. Minn-Dak was exploring the desugarization expansion about 10 years ago, but the 2008 farm bill instituted marketing allocations based on 85 percent of U.S. sugar consumption. As U.S. sugar consumption has increased, allocations have increased, making it more feasible, Roche says.

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