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November 16, 2001

S.D. Ag Complex Draws Early Support

ABERDEEN, S.D. (AP) - Organizers are looking for people interested in a proposed beef, ethanol and energy complex north of Pierre, S.D. - and apparently are finding some.

A meeting last week in Aberdeen attracted about 175 people - some of whom are not even involved in agriculture. An earlier meeting in Union Center, near Sturgis, S.D., drew 120 people.

"You look at this idea, and it's going to revolutionize the cattle-feeding industry," said Dennis Mitchell of Houghton, S.D., a board member of the Dakota Value Capture Cooperative.

Organizers want $18 million to $24 million in investments from farmers and ranchers, a $6 million federal grant and a debt-financing package to pay for a $62 million complex.

It would be part feedlot, part energy plant and part ethanol plant and is planned for 310 acres in Sully County about 14 miles north of Pierre.

The board's vice president, Lars Herseth of Houghton, said none of the engineering or science for the complex is necessarily new. But it will be the first time that beef, ethanol and energy are all hooked together, he said.

The complex would produce slaughter-weight beef cattle, fuel ethanol, wet distillers grain, methane and other byproducts. And each would either be sold or used at the facility, organizers said.

Construction could start next spring on a 15-barn feedlot. Backers think 65,000 head of cattle will be finished there each year.

Next, construction would start on an anaerobic digester - described as a giant sewage treatment plant for the cattle manure. The manure is to be turned into biomethane, fiber and liquid fertilizer.

The ethanol plant, the final phase, would be powered, in part, by the biomethane. Along with ethanol, it would yield wet distillers grain - which would be mixed with corn and fed to the cattle at the feedlot.

Backers want the feedlot ready for cattle in about a year and the ethanol plant running by spring 2003.

Plans call for wrapping up the equity drive before the end of the year. If $24 million is raised, no more investments will be accepted.

Potential investors will get their money back if enough isn't raised, said Mitchell.

Organizers said the complex, between eastern South Dakota corn country and western cattle country, would employ about 60 people.

The average return on investment would be 25.7 percent at the end of five years if $22 million is raised during the equity drive, the board members said.

Herseth said he thinks 25.7 percent is conservative.

"The numbers are real," he said.

South Dakota exports 80 percent of its cattle and corn, the board members said. "(This) allows farmers and ranchers to compete as far as being able to feed cattle out," Mitchell said.

"If you look at the resources of the state, it would just make sense," Herseth said.

The downside includes no rail line nearby and no assurance that the finished cattle would have a buyer. But board members said they think the cattle finished at the complex would draw packer interest.

Backers said the 75 million gallons of wastewater produced each year would be filtered and channeled through an existing canal system and sprayed on the surrounding land.

Officials said the project has support from the South Dakota congressional delegation.

 

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