In an AgriTalk interview on Tuesday with host Chip Flory, Mike Kinley, managing member of Agricultural Development Group LLC, discussed his vision for value-added projects in the ag sector. Particularly, Kinley shared plans for Platinum Crush LLC to develop a Buena Vista County soybean-crushing plant.
“If you take a look at what’s happening across the food, feed, and fuel part of the industry, we’re seeing a lot of growth on the fuel side, and a real strong push towards products like renewable diesel. Some of these breakthroughs in technology in that sector have created opportunity for additional soy oil demand,” says Kinley. “Having been familiar with what those dynamics are, we’ve identified more crushed capacity in the U.S. as a constraint to growth.”
Incentives and government regulations, according to Kinley, are both driving factors in the renewable diesel push. States like that of California have peak interest in the Midwest, as do fuel industry stakeholders, thanks to our soybean-crushing facilities.
“If you look at the first modern project in Shell Rock, Iowa, Phillips 66 certainly took a great interest in that project and step forward to be not only an investor, but to be a buyer of all the oils that are coming from that facility. So, in a sense, we broke new ground with that Phillips 66 agreement sort of being the first of its kind,” Kinley says. “Now we’re seeing some follow-on effects with other players stepping up and doing a similar thing.”
Diverse technology also plays a pivotal role in fuel stakeholders’ interest in the soybean-crushing game.
“These players in the petroleum industry are recognizing the opportunity and, through technology, have found a way to convert fats, oils, and greases—in particular, soybean oil—into a diesel product that is molecularly identical to petroleum-based diesel,” Kinley says. “In doing so, they’ve removed a lot of blending requirements and, because they produce it themselves, they get the opportunity to capture those profits longer term.”
With offers coming in from Phillips 66, Kinley and his team at the Ag Development Group are eager to put each operation in motion. A rough construction timeline puts into perspective the opening date of the Shell Rock location, as well as the highly anticipated Buena Vista facility.
“The Shell Rock facility is currently under construction. We started doing dirt work last fall and were able to get a lot of dirt work done. We worked all the way through the middle of December. Then spring, being on the drier side, we found ourselves able to continue that work and get to pouring concrete and going vertical,” Kinley says. “Now, we’re in pretty good shape where I hate to say we’re ahead of schedule, but we’re doing very well in construction. Our target date is to be able to receive soybeans into the elevator on-site in July of 2022, and then be able to crush soybeans in December of 2022.”
According to Kinley, the Platinum Crush, Buena Vista soybean-crushing facility budget is on-par with the Shell Rock location of $350 million. Local producers can also expect to use the Buena Vista facility by winter 2024.
Catch Chip Flory’s full interview with Mike Kinley, managing member of Agricultural Development Group LLC, here.
