A group of community leaders is studying the feasibility of building a 5,000-tonne-per-day soybean-crushing plant in western Manitoba.
The newly created Westman Opportunities Leadership Group (WOLG) is a volunteer group whose membership includes business, farm and civic leaders from the region.
“Most of the (soybean) growth from here on in will certainly be in Westman,” WOLG chair Ray Redfern, president of Redfern Farm Services, said in an interview from his Brandon headquarters Dec. 22. “That’s why we think Westman is a good location for a (soybean-crushing) plant.”
WOLG, has broad Westman region representation with everyone “pulling in the same direction,” he said.
WOLG, in partnership with the Brandon Economic Development Corporation, has hired EcDev Solutions to build a detailed work plan centred around “a strategic approach to assessing and, if applicable, pursuing the identified potential opportunity along with identifying funding sources for these efforts,” WOLG said in a news release. Funding for the preliminary work, to be completed by January 31, 2017, is coming from the Brandon Economic Development Corporation, with oversight by WOLG.
The longer-term objective is to determine if a plant makes economic sense, and if so, take that information to a crushing company in hopes it will build a plant, Redfern said.
The WOLG investigation will be based on a hexane solvent extraction plant costing $60 million to $175 million. It’s estimated such a plant will cost $1 billion a year to operate and employ 40 to 80 people, not including spinoff businesses, Redfern said.
Biodiesel made from soybean oil is one possible spinoff. Soybeans are primarily crushed for the meal, which is fed to livestock.
In May 2015 a study prepared for the Manitoba Pulse & Soybean Growers (MPSG) and Soy 20/20 concluded Manitoba soybean production could sustain a 2,000-tonne-a-day soybean-crushing plant, in part because of poor and expensive rail service to export soybeans and import soybean meal.
For several years soybeans have been Manitoba’s third most planted crop behind canola and spring wheat, respectively. Soybean plantings are expected to continue growing because of their profitability for farmers and ability to tolerate stress, including wet soil.
In 2015, Manitoba farmers seeded a record 1.33 million insured acres of soybeans, Manitoba Agricultural Services Corporation (MASC) data shows.
In 2016 soybean plantings jumped 310,000 acres or 23 per cent, to a record of 1.64 million acres. And industry observers expect a similar jump this year to two million acres. If the pace set the last five years continues Manitoba soybean plantings will hit three million acres by 2022.
The 2015 study suggested the best place for a crushing plant would be between Portage la Prairie and Winnipeg and Lake Manitoba and Carman because of the proximity to most of Manitoba’s soybean production, feed mills and road and rail corridors and being far enough away from northern U.S. crushers to have a freight cost advantage. However, MPSG executive director Francois Labelle noted the study was based on 2015 statistics and future soybean production and possible hog production, would be in western Manitoba.
In 2011, 95 per cent of Manitoba’s soybeans were grown in the south-central and eastern parts of Manitoba, including the Red River Valley and five per cent in the rest of agro-Manitoba, data from Manitoba Agriculture pulse specialist Dennis Lange shows. However, in 2016, 61 per cent of soybean acres were grown in the ‘traditional’ area and 39 per cent beyond that region.
With soybean acres growing, especially in the western part of the province and eastern Saskatchewan and the possibility of expanded hog production in western Manitoba where Maple Leaf in Brandon and Hylife in Neepawa process hogs, if a soybean-crushing plant is to be built the Westman region makes sense, Redfern said.
Soybean planting could “explode” in Saskatchewan following poor lentil and field pea yields there in 2016, he added.
“The genetics have been proven, at least to this point — potential frost notwithstanding,” he said. “The potential is there for reasonable success. The Parkland area (of Saskatchewan) has really had great success.”
Assuming a 5,000-tonne-a-day plant operates 350 days a year it would need 1.75 million tonnes of soybeans annually. That’s more soybeans than Manitoba has typically produced. Preliminary estimates based on MASC data puts 2016 production at an estimated 1.83 million tonnes (an average 42 bushels an acre from 1.6 million acres). However, Redfern said the feasibility study could take several years and acreage, including in eastern Saskatchewan, could be higher.
If Manitoba production hits three million acres, assuming the current five-year average yield of 35 bushels an acre, annual Manitoba soybean production could reach 2.85 million tonnes a year.
In July Keystone Agricultural Producers’ (KAP) advisory council passed a resolution supporting the Brandon Chamber of Commerce’s efforts to attract a soybean-crushing plant.
Some of WOLG’s volunteers include KAP members Owen MacAulay, Barry Routledge and David Rourke, all known as strategic thinkers.
Allan Preston, a former deputy agriculture minister, is also part of the group.
Redfern stressed the study must be thorough and fact based.
“We don’t want to be blown out of the water because we did a poor job building our case,” he said.
Taking a regional approach will pay off, he added.
“I am becoming more and more convinced that this is all about us making sure the community is on common ground and not islands, all competing with each other. We will be far more successful if we embrace collectively that there is going to be some benefit to all of us wherever we fit in this chain.”