Agricultural News
Minnesota Company Continues Efforts to Build New Canola Crushing Plant in Enid
Thu, 10 Jan 2013 18:32:55 CST
Neil Juhnke, president and chief operating officer of Northstar Agri-Industries spoke to business leaders in Enid Thursday about the canola crushing plant his company is in the process of building in Enid. Oklahoma Radio Network Farm Director Ron Hays spoke with Juhnke about the genesis of the company, its plans, and its progress so far.
The company was founded in 2006 to grow along with the canola industry in the United States. Juhnke was one of the six founding members and investors of the company which built its first plant in northwestern Minnesota.
Juhnke said he was originally drawn to the fledgling canola business due to the incredible opportunity it offered.
"What we were drawn to was the strength and growth potential in the U.S. market. Canola is the healthiest vegetable oil on the market. It has the lowest saturated fat content. It has the right ration of Omega-3 to Omega-6 fatty acids. It's just an extremely healthy component in the U.S. diet and we saw that driving increased adoption levels and utilization levels in the U.S. food industry."
Juhnke said their first crush plant in Kittson County, Minnesota, is a state of the art facility. It has a capacity of 1,000 tons per day. It produces refined canola oil ready to be bottled for retail sale. Juhnke said that also leaves them with 38 percent protein canola meal.
The plant in Kittson County draws canola from as far away as 150 miles to the west, Juhnke said. Canadian farmers from as far north as Winnipeg also make use of his facility. With the typical yield of canola at between three-quarters and one ton per acre, the Kittson County plant can serve 500,000 acres.
In turning to Oklahoma, Juhnke said he sees much the same opportunity for his company and Oklahoma farmers as he saw further north.
"The interest in the Southern Great Plains is the growth potential. We see canola as an excellent agronomic fit for the dryland wheat farmer to provide a rotation crop. It's profitable in its own right. The last three years has returned a higher net return per acre on an average basis to the grower than wheat. It also improves wheat yields and has the potential to help the Oklahoma wheat farmer to clean up their grassy weeds and other issues. It breaks up disease cycles. It has a tap root so it can break up hard pan. It's just an excellent agronomic fit.
"The potential is there if canola is adopted at the levels that OSU recommends for a 1.6-million-acre potential. So, as we studied the national trends and the growth opportunities, we identified the Southern Great Plains as the next step for the development of our company to build a second plant."
Juhnke said Enid provides an excellent location for that second plant. He said it will take about 800,000 acres of canola to support the Enid operation.
Northstar's proposed facility would have the capacity to process 2,200 US tons of canola per day or 760,000 tons per year, and will include a full refinery capable of producing 580 million pounds of food grade refined canola oil and 450,000 tons of canola meal annually. This significant investment in Oklahoma will create approximately 55 permanent full time jobs with a total annual payroll of approximately $3.75 million.
"Enid is centrally located in the region where canola is grown and will be grown. It has excellent surface transportation access with both the U.P. and the B.N. rail. It's a community large enough to have the utilities requirements to support our plant and we've been welcomed with open arms by the city of Enid to help us develop this important project."
In regards to marketing canola oil at the present time, Juhnke said there is a ready market for everything his plants can produce.
"Selling canola oil into the U.S. market is not difficult. It's in demand. It's a very versatile oil. It can be used in everything from deep fat frying to salad oils to shortenings. It is used in all of those things."
He said his company already has a client list of more than 35 companies and is selling oil by the tanker truck and tanker railcar load nationwide. They have a marketing partnership with Land O' Lakes-Purina Feeds and a subsidiary of a Minnesota dairy co-op markets both Northstar's meal and its oil.
"We're currently working on a timeline that would allow us to break ground on the plant around about October 1, 2013. We see all of the permitting and different aspects of development coming together to enable that. It will take us about 18 months to build the plant. The plant will come online just prior to the 2015 crop which is harvested in June in the Southern Plains.
"In the meantime, what we intend to do is reach out to elevators and farmers who are participating in the regional farm meetings that are being held. Our agronomy services manager Jay Bjerke is a speaker at the farm show here in Enid over the weekend.
"In addition to that we have a unique opportunity to source canola from this region even to be crushed in our Minnesota plant. We are the only crush plant with a single-line rail connection to this region and, so, we've sourced some canola from Enid last year in June and July. The plant ran well with the canola. We were very happy with the quality and so we plan to expand on our regional sourcing program and buy canola in June and July and crush it in our plant in Minnesota."
Juhnke said his company will put out a bid for the upcoming canola crop soon.
You can hear Ron Hays's full interview with Neil Juhnke by clicking on the LISTEN BAR below.
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