SOUTHERN GREAT PLAINS FARMERS GET NEW MARKETING OPPORTUNITIES THROUGH OILSEEDS!
Oklahoma City-based processing plant to expand Products

A novel investment from an unusual alliance of agricultural producers is bringing expansion and growth to an Oklahoma City-based oilseed processing facility, where finished food-grade oil products and oil for biofuels will be produced and marketed.

Built in 1944, the Producers Cooperative Oil Mill (PCOM), located near downtown Oklahoma City, will have capacity to process products from Winter Canola, sunflowers and other oilseeds. 

A newly signed agreement between PCOM and Plains Oilseed Products Cooperative (POP), a farmer-owned coop, will make farm producers a part of the value-added coop to market these new generation products and enhance their profitability.

The alliance brings new opportunities for farmers in Oklahoma, Kansas and Texas, said Gene Neuens, POP executive director.

“More than six years of research by Oklahoma State University and Kansas State University to better understand the value and yields of winter Canola has resulted in this unusual joint venture between an oilseed crusher, Oklahoma State University, a national seed supplier, and American Farmers & Ranchers Mutual Insurance Company (Oklahoma Farmers Union) to add to the economic development of rural America,” Neuens said.

The project had help from many agricultural and industry leaders and producers, including Oklahoma Farmers Union; Monsanto Dekalb Genetics; U.S. Department of Agriculture; Plains Oilseed Products; Producers Cooperative Oil Mill; Oklahoma Department of Agriculture, Food and Forestry; and Robert M. Kerr Food & Agricultural Products Center.

As a result, Southern Great Plains wheat farmers will gain significant benefits in several ways by growing Winter Canola, an oilseed adapted to the southern growing region, Neuens said. Read more...

“Rotating Roundup Ready Winter Canola with wheat crops will give farmers the benefit of better weed control and increased yields, while producers will have marketing contracts to know what their oilseed is worth before planting time,” Neuens said.

The newly expanded oilseed crushing plant in Oklahoma City will offer producers several local delivery points throughout the Southern Great Plains, saving them transportation costs to more northern markets.

Monsanto Company will deliver Winter Canola seed to farmers through their network of seed dealers and also invest in building infrastructure and providing a ready market in the Southern Great Plains.

POP will continue to work with grain handlers across the Southern Great Plains to establish additional local delivery points for growers’ oilseed crops.

Oklahoma Farmers & Ranchers Energy Enterprise (OKFREE), formed by Oklahoma Farmers Union, gained early value through a USDA value-added grant to study the feasibility of processing oilseed and understand the key market opportunities for using the crops in the food and biofuels industry. OKFREE also invested funds and in-kind contributions to ensure producers a local facility that could contract to crush the oilseeds and produce the final products.

POP also received a value-added cooperative marketing loan from the Ag Enhancement Diversification Program, a division of the Oklahoma Department of Agriculture, Food and Forestry.

“The investment – from seed to finished oil – in the Southern Great Plains is a key focus of many rural policy makers to help local producers become successfully diversified and grow a dynamic agriculture economy,” Neuens said.

History

The Beginning

In western Oklahoma, producers have been searching for alternative and value-added crop opportunities as an option for improving profits and expanding the utilization of natural resources, specifically their land. With continuing low prices and subsequent depressed profits for soybeans, canola, sunflowers, cotton and peanuts. Oklahoma family farmers have undertaken this oilseed initiative. Believing through cooperative action they can improve farm income to oilseed producers by double cropping, product diversification, crushing their oilseeds, refining the crude oil, packaging the refined oil and marketing it directly to the consumer.

In 2003, seed producers and technical advisors formed a steering committee and created Oklahoma Farmers & Ranchers Energy Enterprise LLC (OKFREE). OKFREE was formed to determine the feasibility of owning and operating a seed crushing and further processing facility in western Oklahoma. Oklahoma Farmers Union was instrumental in assisting with the formation of the steering committee, funded the writing of the USDA grant application and continues to provide support by providing for office space, meeting facilities and materials.

A $235,000 United States Department of Agriculture, Value Added Market Development grant enabled OKFREE to complete a detailed oilseed feasibility study and business plan. Oklahoma State University was selected as the contractor to provide these services. Drs. Phil Kenkel and Rodney Holcomb at OSU have extensively examined the feasibility of manufacturing and marketing oils and meals from the proposed facility, with significant input on product characteristics and processing options provided by Dr. Nurhan Dunford.

The initial steering committee and advisors have devoted a considerable amount of time and resources, visiting other crushing facilities, researching raw material supply, studying time path adoptions of canola, identifying markets, studying technology and equipment and establishing the appropriate business structure.

Next Chapter

This forward thinking Oklahoma producers formed OKFREE with the objective of creating a producer-owned oilseed processing enterprise. After significant due diligence review of the business plan documents and discussions regarding the business structure for the processing entity, Plains Oilseed Producers, LLC (POP) was formed on January 3, 2007. POP, an Oklahoma limited liability company, plans to construct, own and operate a state-of-the-art oilseed processing plant in western Oklahoma. The plant will be able to crush many different oilseeds, such as canola, sunflowers, peanuts, soybeans and any other oilseed grown in Oklahoma. The plant will add to the economic development of rural Oklahoma and provide Oklahoma agricultural producers with a new market for their current and future oilseed crops.

According to the business plan, POP anticipates processing over 100,000 tons of oilseeds each year, producing approximately 57 million pounds (7.7 million gallons) of oil, to market to food-grade oil refiners and biodiesel plants. The plant will also produce over 69,000 tons of canola and other meals annually, which will be marketed to Oklahoma feed manufacturers and large-scale dairies.

During January 2007, POP submitted an application to the Oklahoma Department of Agriculture, Food & Forestry Market Development Services for an Agriculture Enhancement & Diversification Cooperative Marketing Loan. This application was approved and POP will utilize these funds to continue the project development and marketing activities.

The proposed venture will strive to not only capture value, but to also create value, by adding profits in both ways to our agricultural production; and producers can affect the potential for risk and reward. POP’s Board of Managers are confident the proposed venture is one that not only can be driven by customer needs and perceptions, but also one that will be strongly supported by local, state and federal clean air and sustainable energy initiatives.

POP Board of Managers:  Matt Gard, President - Fairview, OK; Terry Detrick,  Vice-President - Oklahoma City, OK; Mark Holder, Secretary/Treasurer - Altus, OK; Walt Grabow - Omega, OK; Jerry Hedges - Vici, OK; Pete McDaniel -  Apache, OK; Clay Pope -  Loyal, OK.