Investors tour Otter Tail Ag ethanol plant

By Ryan C. Christiansen | July 08, 2008
Web exclusive posted July 28, 2008 at 10:58 a.m. CST

Hundreds of investors and farmers, along with their families, attended the grand opening and ribbon-cutting ceremony for Otter Tail Ag Enterprises LLC, a 55 MMgy ethanol plant near Fergus Falls, Minn., on July 25. After 17 months of construction, in March the plant began production. Planning for the facility began in January 2005. The plant employs 33 people.

According to Kelly Longtin, chief executive officer and general manager for the plant, the project was completed on time and on-budget. The facility is producing 157,000 gallons or more of ethanol daily and as of July 25 the plant had produced 16.1 million gallons of ethanol. The plant has also produced 60,000 tons of distillers grains, he said.

"One thing we are really proud of is that our distillers grains sales continue to be good, especially in our wet cake area," Longtin said. "We expected about five percent to 10 percent sales and they are averaging 20 percent to 25 percent sales and so we are really proud of that. The farmers are real happy with that."

During the grand opening event, investors were invited to tour the plant and ask questions. "It's pretty impressive," said Scott Biss, a farmer from Elbow Lake, Minn., who has money invested in the plant. "We have increased our acreage of corn a little bit. Recently things have kind of pointed toward more corn production to increase our bottom line."

Dan Beske, a farmer from Fergus Falls, Minn., hauled corn to the plant about a month ago and now he wanted to see the inside of the plant. "I've never been in an ethanol plant and so I wanted to see what the process was like," he said. "I've driven by here ever since they started building it and so it was fun to see the finished product and to see it all in motion and all of the workers that are here. It was interesting." Beske said he has increased his corn acreage by 50 acres because of the proximity of the plant. "It's only two miles from my yard to here, so I save some fuel hauling," he said.

"Our vision was to create economic value for our region," said Jerry Larson, president of Otter Tail Ag. "Without the investor we wouldn't be here. It's been said many times that there are only two things important for renewable energy projects and that is equity and permits." Larson is a corn and soybean farmer from Elbow Lake, Minn., and is a founding board member of Chippewa Valley Ethanol Co. in Benson, Minn., and DENCO LLC in Morris, Minn., according to the company's Web site. He is vice chairman of Minnesota Corn Research and Promotion Council. He has also served as a board member of the Renewable Fuels Association, and is past president of the Minnesota Coalition for Ethanol.

"I was just in [Washington, D.C.] last week and there is little enthusiasm to change [the renewable fuels standard] or revise it and so we have strong support in Washington," Larson told his investors. He addressed recent concern about ethanol production and its affect on corn prices and overall food costs in the United States. "Just a little bit about the grocery manufacturer's babble about giving ethanol the blame for food prices," he said. "Six percent of the food cost comes from corn. The major cost comes from fuel. The average grocery cart travels 1,500 miles and so fuel cost is a key component."

Larson added, that there is one thing to watch for - "I don't think it will happen: the corn price has dropped 25 percent since its high. Just see if food prices come down. I doubt it."

Larson told the farmers and investors attending the Otter Tail Ag grand opening that the one thing they could do to help is be an advocate. "Be informed. And when you hear misinformation, speak up, because collectively we need to counter all of the myths and all of the misinformation that's out there and so be an advocate. I think this is the most important selling point of all: every time you buy ethanol, that dollar stays in the U.S. Every time you buy petroleum, that dollar goes to countries that aren't necessarily all our friends. By buying ethanol, we're keeping our dollars here without any military expense and so be a supporter, not only verbally, but in consumption, as well."