News 668 views last update:6 Aug 2012

Kentucky Specialty Grains will need soybeans

Kentucky Specialty Grains has engaged CoBank, Business Advisory Services to evaluate the feasibility of specialty soybean processing in the West Kentucky area. Their work shows KSG will add value for farmers by vertically integrating the producer into the processing of specialty trait soybean for human food and livestock feed use.

Kentucky Specialty Grains (KSG) is a farmer owned company formed to explore the feasibility of soybean production, processing and marketing initiatives. Its goal is to add economic and business value for agricultural producers and the rural economy of West Kentucky.

Kentucky Specialty Grains will contract with farmer-owners in a cooperative type arrangement to plant approximately 40,000 acres of specialty oil soybeans. Based on historical yields, this will produce an average of 1.8 million bushels of specialty oil soybeans annually. The planned facility will process as much as 150 tons of soybeans per day; a daily equivalent of 5,000 bushels. The plant will use extrusion technology to produce non-solvent extracted non-transfat oil for the food industry.

Approximately 12.0 million pounds (5,360 tonnes) of specialty soybean oil will be produced per year. Also, 37.500 tonnes of high-bypass meal will be produced for consumption as livestock feed and pet food.

Premium price for farmers
The non-transfat oil and the high-bypass meal both sell at a premium price to commodity grade soybean oil and meal. This additional product value and the value added by the processing will be returned to the farmers through a premium price for their soybean and a patronage dividend from the operating profit of the company. This combination is projected to be 60 to 75 cents per bushel per year over the first five years or approximately $1.3M per year.

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