Ethanol Biorefinery Boosts Local Corn Production

Blue Flint Ethanol stimulates corn expansion in McLean County, North Dakota.
By Lyndon Anderson | May 13, 2015

When Blue Flint Ethanol came online in February 2007, corn production in North Dakota’s McLean County was about 32,500 acres. In order to purchase the corn needed to operate the biorefinery, employees had to look far beyond the local market. At that time, the primary corn-producing area in North Dakota was the southeast part of the state, hundreds of miles from Blue Flint Ethanol’s home in Underwood. More than 90 percent of the corn arrived via the Dakota Missouri Valley Western Railroad. Only about 10 percent of corn was purchased locally.

That ratio of local to regional corn has changed, and in a significant way, in recent years. Today, over 90 percent of the corn used at the ethanol biorefinery is delivered via trucks within a 100 mile radius of Blue Flint Ethanol.

Location, Location, Location
Blue Flint Ethanol is located adjacent to Great River Energy’s Coal Creek Station, North Dakota’s largest power plant. Instead of burning fuel to make ethanol, Blue Flint Ethanol uses excess steam from Coal Creek Station to provide process energy and dry distillers grains. That proximity to a power plant is essential to Blue Flint Ethanol becoming one of the most cost-effective, energy-efficient and environmentally friendly biorefineries in the country.

Blue Flint Ethanol is a part of Midwest AgEnergy Group, an upper Midwest biofuels enterprise owned by Great River Energy and other accredited investors including banks and international, agricultural and industrial businesses. MAG also includes Dakota Spirit AgEnergy, an ethanol biorefinery under construction near Jamestown, North Dakota.

According to David Spickler, vice president of marketing and risk management for Midwest AgEnergy Group, the increase in local corn production is due to a number of reasons, including:

• The presence of the Blue Flint Ethanol ethanol biorefinery.

• The improvement of genetics that has resulted in corn varieties better suited for the climate in western and central North Dakota.

• An increase in corn prices (although prices are lower now).

• Abundant rainfall contributing to higher than average yields in western and central North Dakota.
The numbers speak for themselves. In 2012, about 64,000 acres of corn were planted in McLean County. That number jumped to 85,800 acres in 2013, according to information from USDA’s National Agriculture Statistics Service.

Local Growers
Steven and Katie Heger operate a third-generation family farm near Underwood. They started raising corn in 2004. Although corn had always been an easy crop to grow, a lack of local outlets to market corn limited any expansion of corn acres on their farm. An increase in corn production for the Heger operation coincided with the start of operations for Blue Flint Ethanol in 2007. “It gave us a readily available and local market, and also a real freight advantage with our farm located just five miles north of the plant,” Heger says. He adds it took a lot of work to get corn production levels to where they wanted them. He benefited from improvements in corn genetics for growing conditions in central North Dakota, along with a better understanding of those genetics. “As a result, we have really seen yields increase in the last 5 to 10 years.”

Rob Tweeten, who farms on the west side of the Missouri River near Hensler, North Dakota, has been raising corn since the early 1980s, primarily for livestock feed. He increased corn acreage in 2005 with the addition of more irrigation pivots. After Blue Flint Ethanol came online, Tweeten gained a new market for corn, and the advantage of a local outlet boosting basis, a discount to nearby futures markets that mostly reflects transportation cost as well as local demand. Tweeten’s dryland rotation is now corn, followed by pinto beans or soybeans and then wheat. His irrigated rotation is corn, followed by soybeans. “We needed another crop in our rotation, in addition to wheat and beans. Corn has been a great addition and has taken over a lot of acres in this area,” he says.

Tweeten also utilizes another product produced by Blue Flint Ethanol: modified distillers grain. His farm has been purchasing the high-quality feed product since expanding the feedlot in 2008. Tweeten has an abundance of mixed grass forage for his livestock. By adding the modified distillers grains, he is able to provide his cattle a palatable and nutritious ration, and at a reasonable price. “It’s a good cold-weather feed,” says Tweeten. He credits Blue Flint Ethanol with providing a consistent product. “They do a good job with quality control.”

Added Drying, Storage
Another major factor that has helped contribute to an increase in corn acreage in the region is the development of Coal Creek Drying and Storage, located adjacent to Blue Flint Ethanol. This 2010 infrastructure enhancement, developed by Knorr Farms and Great River Energy, resulted in the addition of a dryer and 600,000 bushels of crop storage. “This provides local growers with an option to have their corn dried and then marketed at a local facility. Prior to this, there was not an option to have corn dried locally,” Spickler explains.

Since 2010, expansions at Coal Creek Drying and Storage have brought the total bin space to 2.36 million bushels of storage, in addition to the 1.5 million bushels storage at Blue Flint Ethanol. A second truck scale was also added to accommodate increased truck traffic. “We have provided growers with a place to market and dry their corn, and to get in and out of Blue Flint Ethanol in an efficient manner,” Spickler says. “This has reduced wait times substantially for local growers.”

The increase in local corn acreage has led to a dramatic rise in the number of suppliers for Blue Flint Ethanol. Prior to the opening of Coal Creek Drying and Storage, Blue Flint Ethanol worked with fewer than 100 suppliers. As a result of the surge in local corn production, the biorefinery now has more than 900 suppliers.

Author: Lyndon Anderson
Leader, Communications
Great River Energy