One of the greatest things that has happened here in the history of Vernon County has been the development and establishment of Prairie Pride Inc. This biodiesel plant is a major industry located in the Deerfield area. It is in operation and will continue to be important to the area economy in the future.
According to their Web site, "Prairie Pride, Inc. is a new-generation, producer cooperative that is converting soybeans into biodiesel fuel and soy meal. We have completed construction of our new soybean extraction/biodiesel refinery facility at Deerfield, in West Central Missouri. The new facility is poised to crush 21,000,000 bushels of soybeans per year. The soybean oil can yield 30,000,000 gallons of biodiesel. The resulting soy meal will be sold as animal feed, which has always been the primary use of the bean."
In last week's column "Myths and Realities behind Rising Food Prices," it was pointed out that the biodiesel industry is important for the production of biodiesel and has little effect on the cost of food. Most of the soybean is used for soybean meal which is used for food and for livestock feed. Having a crushing plant in our back yard makes it possible for the farmer members of the new-generation cooperative have a good market for their product at a higher price, increasing their profits.
The best way of doing economic development is to consider the resources that are available and then increase those resources. That is exactly what happened in the development and establishment of Prairie Pride. Marvin Oerke, board chairman, and others took a look at what we have in this area -- soybeans. They considered what alternatives might be available to establish a better market for this product. The group had a good idea and developed this idea into a reality. They set out to turn a dream of a biodiesel plant into a reality.
This group put out a lot of effort to raise the money and to gain the support that was needed for the plant and the new business. They spent many hours working on this project. They did it and got the work done in a highly successful manner.
In their equity drive to construct the plant, they successfully raised $36 million for the construction and establishment of the plant. The total cost for the plant was $89 million. It is a state of the art plant that is beyond the comprehension and knowledge of most of us. It certainly has been a great accomplishment.
In recent weeks there have been announcements about an equity drive that Prairie Pride is now conducting. This offers people an opportunity to become members of the cooperative and to invest money in the enterprise. Many of the original members are purchasing additional shares, which accounts for much of the money that is currently being raised. This indicates how much they believe in what they are doing and their vision for the future of their new generation cooperative.
When it was announced that another equity drive was being started, it might have been easy to assume that the plant was not doing well and there was a need for the additional money. It has more to do with the increasing cost of commodities in recent months and with the difficulty for anyone to get loans.
John Nelson, Prairie Pride CEO, said that the plant is making money. At the recent annual meeting it was reported that a profit had been made. The situation is that the beans that they were purchasing increased in cost. They had budged for what they had expected beans to cost and as a result they ran into a cash flow situation which happens with many businesses. With the shortage of money for loans in the current economic climate, they could not barrow any additional money. The amount of equity that the company had in relation to what they had borrowed was also a factor.
While Prairie Pride is making a profit at the present time, they are operating at about 50 percent of capacity. With a better cash flow they will be able to increase that to 100 percent and have bigger profits. They are using the right approach to get additional funds.
According to Caroline Phillips, human resource director, the goal for the current temporary equity drive is $10 million. This gives those who did not become members during the first drive an opportunity to become a member. The minimum investment is $1,000 for membership and the purchase of two units which cost $12,000 per unit.
There is also another type of investment that is open to everyone. Caroline says it operates like a CD -- it pays 8 percent annually and there is a three years minimum investment. This investment requires the purchase of a minimum of 2 units for $5,000 each.
Many of the investments are coming in at the present time. The final date for them to be received or in the mail is Saturday, Jan. 30. At that time she said that they will evaluate where they are. They will then decide whether to extend the drive, do something different or end the drive because they have raised enough money.
On each of the ads because of the type of investment there are disclaimers. Those that sign up will have to sign forms stating that they know the type of investment they are making.
Now during the last few days of this equity drive there are opportunities for more people to become involved and to support this exciting and important venture.