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Leaders Out at Missouri Soybean Group

January 3, 2014
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By DAVID A. LIEB, Associated Press


Two longtime leaders of the Missouri Soybean Association are out of their jobs as part of an organizational shakeup following an audit of how the prominent agricultural group managed millions of dollars of merchandising fees paid by farmers.

Board members of the soybean organization declined to release the audit and, in interviews with The Associated Press this week, provided no specific reason for the staffing changes. But the ousted executives blamed their departure on an internal political squabble involving state and national leaders in the soybean industry.

Gone are Dale Ludwig, who served as executive director of the soybean association for more than 20 years, and the organization's field services manager, J.P. Dunn. Both resigned under pressure Dec. 19.

Their departures are notable because soybeans are a multi-billion-dollar business in Missouri, which ranked seventh nationally last year in soybean production. Missouri's soybean organization has been a national leader in developing soy-based fuel used in diesel vehicles. It's also a significant political player, making endorsements of state officials and contributions through a political action committee.

Ludwig said he was placed on paid administrative leave for about a month before his departure as an audit was underway at the behest of the United Soybean Board. The national board, created by a 1990 U.S. law, oversees about $180 million annually of "check-off" fees paid on all U.S. soybean sales to help promote the industry. Half of that money goes to the national group and half stays with state organizations.

Ludwig blamed his departure on pressure from national soybean leaders.

"This whole thing has some politics involved," he said.

Dunn, who also cited "internal politics," said he was asked to resign by the state soybean board.

"I did ask for an explanation and wasn't given one," Dunn said, adding that there was "no wrongdoing, no scandal or anything like that."

Both Dunn and Ludwig said they never were shown the audit. But Ludwig said concerns were raised during the auditing process about how the Missouri Soybean Merchandising Council used its share of the farmers' check-off fees. Among other things, he said there was criticism for providing research money to private companies and for buying university laboratory equipment. The United Soybean Board's compliance manual states that it "strongly discourages the funding of equipment."

Ludwig said he also was accused of having a conflict of interest for investing in biodiesel facilities, which convert soybeans into fuel, while some of Missouri's merchandising funds were used to promote biodiesel. Dunn also is an investor in biodiesel businesses.

The Missouri Soybean Association focuses on industry advocacy while the Missouri Soybean Merchandising Council distributes the farmers' check-off fees for industry research and marketing initiatives. Ludwig and Dunn worked for both entities.

The soybean association played an instrumental role in getting farmers to help start the Mid-America Biofuels plant in Mexico, Mo., and the Paseo biodiesel facility in Kansas City. Ludwig and Dunn both said they considered it their professional responsibility to personally invest in the facilities, which opened in 2006 and 2008.

"When I was out basically encouraging farmers to invest in this venture, it was from a standpoint of was I willing to walk the walk?" Dunn said.

Ludwig said no one suggested he had a conflict until this year's audit was underway.

"Most everyone believed that if I was promoting it, that I should be involved in it," Ludwig said. "Then a decade later, there were some people that said maybe that was a conflict of interest."

Will Spargo, a southeast Missouri farmer who is chairman of the Missouri Soybean Merchandising Council, said he couldn't recall whether the audit identified any potential conflicts of interest. He said auditors found no money missing.

"There were just recommendations on how we handled procedures within the office when it comes to making sure we were recoding stuff in the proper places, and things we needed to do on a staff level to keep the flow of everything going smoother," Spargo said.

Spargo and Doug Thomas, a northeast Missouri farmer who is president of the Missouri Soybean Association, both declined to comment on the connection between the audit and the staffing changes. No replacements have been hired yet.

John Becherer, the CEO of the United Soybean Board, said the audits it commissions are confidential and declined to discuss the one for Missouri. He said audits don't normally make personnel recommendations.

"The findings go back to the state, and the state takes the appropriate action that they feel is necessary," Becherer said.

Since his resignation, Ludwig has registered as a lobbyist for Mid-America Biofuels, Paseo Biofuels and Missouri Farmers Care, a group backing a November ballot issue that would create a state constitutional right to farm.

Some state soybean board members praised Ludwig's tenure at the association.

"There's not a guy that is more dedicated to the soybean industry than Mr. Ludwig," said Kelly Forck, a Jefferson City soybean farmer who is a board member and its former president.

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