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Posted on  

November 1, 2001

> Equity drive starts for $62M cattle lot, ethanol plant

Supporters of a new style of farmer-owned cattle feedlot and ethanol plant began a statewide drive Monday for a project designed to keep more agriculture processing and profits in South Dakota.

"I can't guarantee the success of any project, but this project appears to have a very, very high potential for success," said state Agriculture Secretary Larry Gabriel at a news conference in Sioux Falls.

Dakota Value Capture Cooperative plans to build a $62 million cattle feedlot and ethanol-production facility on 310 acres of farmland in rural Sully County, about 14 miles north of Pierre. The plant is expected to employ 60 people and indirectly benefit another 350 jobs in the area.

The co-op hopes to raise $18 million to $24 million in start-up equity from farmers and ranchers in a series of 18 fund-raising meetings that begin today in Pierre and will conclude Nov. 26 in Sturgis.

"We think the concept is so good, we're very optimistic," said co-op president Curt Mortenson, a rancher and lawyer from Fort Pierre. "We think people will grab onto it. We really do."

About 150 people attended Monday's informational meeting at the Holiday Inn City Centre, including U.S. Sens. Tom Daschle and Tim Johnson and U.S.
Rep. John Thune.

Dakota Value Capture Cooperative will own and oversee the proposed complex and use a "closed-loop" design pioneered by Prime Technologies, a company based in Pierre.

Wet distillers grain, a by-product of ethanol produced by corn and milo from the area, would be fed to cattle in a climate-controlled environment. Methane from the cattle waste would help fuel the ethanol plant.

"The concept of the circular capture is what's so exciting about this," Mortenson said. "We just keep taking things from the parts."

Building the plant in central South Dakota, where the cost of transportation holds down the price of grain, would provide a new market for producers.

"We will, working together, make this succeed and make it a model for other projects in South Dakota," said David Hallberg of Prime Technologies.

The combination feedlot and ethanol plant sounds promising to Dwayne Archer, owner of Archer Farms in Agar in Sully County.

Currently, he and his sons are not affiliated with it. "We've got to go to some of the meetings and see what the program is," said Archer, 70. "We'll look into it."

Asked what he thought of using methane from cattle waste as fuel, Archer said, "What I've heard of it, it works pretty well."

Monday's event came three days after Davisco Foods International said it would open a new $40 million cheese factory and $10 million waste
treatment center in Lake Norden by the spring of 2003.

Officials called it South Dakota's biggest one-time investment by a private company.

By contrast, Dakota Value Capture Cooperative, listed at $62 million, is a cooperative with shares offered to farmers and ranchers who will supply the venture with grain and then be repaid. The support includes $6 million from the federal government and a state grant exceeding $400,000 to cover expenses including a feasibility study.

"They're all major investments, and we're excited about all of them," Gabriel said.

Thune, a Republican House member, called Dakota Value Capture Cooperative "truly a pioneering technology."

Johnson, a Democratic senator whom Thune will challenge in the 2002 election, said: "This is a project that will have great consequence for
the South Dakota. But it also will be looked at all around America."
 

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