Mikkel Pates, Forum News Service, Published February 21 2014
Non-sugar beet promo prompts interestVALLEY CITY, N.D. – “Industrial beets” is now the preferred moniker for beets being promoted for growing outside the Red River Valley to make things such as industrial sugar components or “green” ethanol, but not sugar.
For the past five years, Green Vision, Heartland Renewable Energy of Muscatine, Iowa, and North Dakota State University have been working to prove the beets can be grown elsewhere in the region. Now they’re anxious to hear whether farmers are willing to grow them, at what cost, and whether the farmers would prefer to grow for a partnering company or own a processing plant themselves.
The goal is to increase farm income by including beets in rotations in North Dakota, in a plant that theoretically could be built to accept beets in 2016 or 2017. Farmers attending the meeting heard the company is looking at two markets – biochemicals and biofuels.
Agronomic research has shown good yields, drought tolerance and saline soil adaptability. Green Vision says rocks in soil shouldn’t be a problem, because processing isn’t as sensitive as with sugar production mills. Some 1-inch-size rocks might go through the process but be pulverized by hammer mills.
Plot trials have succeeded despite often being planted in late May or even early June. Sugar content is often 16 to 18 percent, but sometimes higher.
Lloyd Anderson, Green Vision vice president, emphasized that he wasn’t selling any stock, but he gave some estimates about what a plant would cost. He says it might be built for $75 million to handle production from some 30,000 acres of beets, probably in a 20-mile radius, possibly in the range of 500 to 1,000 acres per grower.
Some farmers interested in the crop have been concerned about labor – especially needing trucks and drivers for the harvest. They’re also concerned about price and must decide whether the crop needs to net as much or more than corn and competing crops. One possibility would be to peg the price of beets to corn.
“One of the things we’re looking at here is the possibility of setting up custom harvesting,” Anderson says. “Farmers can use existing equipment to plant the beets, and for chemical application. They’d need new equipment to harvest the beets and may need additional trucks for the harvest period.” He says Europeans are piling beets on the side of the field for a short period of time, to solve some of the labor issues.
Farmers would have to be careful to avoid carryover effects of Atrazine and Pursuit herbicide and other products important to corn and soybean producers. Farmers planning to become involved would need to start planning to withdraw sensitive chemicals three years before trying to grow beets. Typically, beets follow small grains. If they follow soybeans, the added nitrogen can lead to larger beets with less sugar content.
Anderson says hypothetically a $75 million plant – if it included 50 percent equity and 50 percent debt – might cost growers roughly $1,200 per acre.
“That sounds like a lot of money, but if you look at what Minn-Dak (Farmers Cooperative) or what American Crystal Sugar Co. stock was selling for two and three years ago – those numbers were $3,000 and up to $4,500 an acre,” he says.
Maynard Helgaas, president of the company, acknowledged that the focus has shifted to a dual one.
“We had been working on biofuels, initially, so we came up with the name ‘energy beet,’” Helgaas says. “Now it appears we are going to be looking more seriously about other biochemicals, working with the sugars.”
The market looks more attractive today for producing things such as plastics.
Dave Ripplinger, an NDSU bioenergy and biofuels agricultural economist, is working to help Green Vision qualify for as much federal support as possible for advanced biofuel. The RIN levels are about 15 to 20 cents a gallon today, but were $1.30 a gallon a year ago. He thinks burning ethanol from beets would have about half the greenhouse gas emissions as burning the same amount of gasoline.
Company officials want to know whether farmers want to grow for a processor or would want to make the investment to own a plant. Alternatives would include a joint venture between some of the growers and community investors, or a strategic investor to take ownership in partnership with growers.
Anderson says CHS Inc. and others have talked to Green Vision about the possibility of marketing the chemicals, fuels or RINs if the operation gets off the ground. Ripplinger says farmer ownership of corn ethanol plants operates as a hedge when corn prices are low.