Clearbrook Elevator Association - Clearbrook, MN
CLEARBROOK ELEVATOR ASSOCIATION - Clearbrook, MN
Project: Soybean Extruder
Product: organic soybean oil and Mid By-Pass Soybean Meal (MBPSM)
Began Extrusion Operations: April 2011
Current Production Capacity: 350 tons
Maximum Production Capacity: 400 tons
2012 Annual Sales: $270,000
Jobs Created: 1 part-time salesperson
Prior to installing a soybean extruder at its northwestern Minnesota location, the Clearbrook Elevator Association (CEA) purchased organic feed-grade Mid By-Pass Soybean Meal (MBPSM) and raw organic soy bean oil for their organic dairy farmer member/customers from a processing plant over 200 miles away. “We had to haul the oil here, put it in the feed, and then add our margin before selling to the local farmers,” said CEA General Manager Glen Nelson. By installing their own extruder for on-site soybean processing, CEA eliminated this costly transportation step, providing their farmer members with a locally made product at a lower cost.
CEA had conducted an experiment using a borrowed extruder to see what kind of production they could get and achieved favorable results during the year-long trial. “We concluded it was feasible to do on a small scale. These aren’t large commercial presses; they are small presses that are usually used in a farm situation,” Nelson explained.
In 2011, they hired Cooperative Development Services (CDS) to conduct a Feasibility Study determining the technical, marketing, and financial feasibility of processing conventional and organic soybeans into meal and oil. “We were told by other companies that our idea wasn’t feasible and didn’t make sense because we were competing against larger companies,” Nelson explained. “The CDS feasibility study showed it wasn’t true. Our approach was found to be feasible and it’s working just fine.” CDS then developed a Business Plan for the extrusion operation identifying markets, competitors, sales strategies, and financial projections.
CDS also wrote a $300,000 working capital grant application for a USDA Value Added Producer Grant, which was awarded to CEA in early 2012. “Without CDS, we would never have known about that grant,” Nelson said. “And because of that grant, we were able to hire a part-time salesperson. We now have a man on the road calling on organic farmers to help find new markets for our meal and oil. We would never have been able to afford that it if wasn’t for the grant, and CDS.”
CEA sells all the meal they’re currently producing and will look at expanding operations as demand increases. On the oil side, a new customer in central Minnesota is demanding all the oil they can produce to control dust in an organic fertilizer operation. “He heard about us and it developed from there,” Nelson said. Correspondingly, CEA revenues have increased.
“We were trying to reduce the price to the local farmers because that’s the purpose of the co-op – to help the local farmers.”