Monday, April 11, 2011

By Rusty Murry

On Monday, April 4, the Archer Daniels Midland Company announced plans to acquire the "soybean crushing and biodiesel facility in Deerfield, Mo., from Prairie Pride Inc." ADM has also formed a "partnership with Prairie Pride for the biodiesel portion of the business," according to a news release.

Several months of negotiations between the county and the two businesses have resulted in what Vernon County Presiding Commissioner Bonnie McCord describes as an action that "took a defunct company and made it into a viable entity again, providing jobs and economic benefits which are good for the community,"

As part of the agreement, ADM will pay all legal fees incurred by the county since it was first contacted by ADM. Other key terms agreed to in the project include :

• ADM will pay a $500,000 cash payment to the county to satisfy the 2010 PILT (Payment in Lieu of Taxes) payments due the county under the original performance agreement.
• The tax abatement and PILT payments paid to the county on an annual basis for the current project have been modified to reflect that the current project will be for 20 years beginning on April 1 of this year and ADM will make PILT payments in the amount of $250,000 per year for that period.
• Real property improvements made by ADM during the next five years will be abated at 50 percent tax and such abatement will last for 10 years. ADM will also make an additional PILT payment equal to 50 percent of the taxes that would have otherwise been due on such improvements each year absent abatement.
• ADM will make a minimum of $5 million in property improvements by April 1, 2012. If not made, ADM will pay an additional PILT payment in the amount that would have been paid under the amendment documents if such improvements had been made.
• ADM will have a minimum of 30 employees at all times during the 2011 test period and increase that number of full-time, year-round jobs at the project to 35 beginning in the year 2012.
• The agreement also states that no oil or mineral rights or interests will be abated. If any oil or mineral rights of or interests are held in the name of the county by virtue of the county having fee ownership of the project site, then a 100 percent PILT payment will be made to the county.
• And finally, ADM shall comply with all the terms of the performance agreement, the lease agreement and any related documents, as amended but not limited to ADM's payment of the county's legal fees.

Even stated fairly simply this agreement is complex, but the county wanted more. The terms are "what we negotiated with them" said McCord. "Prior to that we were receiving nothing," she said.

Southern Commissioner Kennon Shaw said that the county wanted a little more and the company wanted less so "we split the difference with them." Northern Commissioner Neal Gerster thought that it was a good deal because the county wasn't getting anything with the facility in an idle state. Gerster said in the long run the new agreement will directly benefit, the county, ambulance district, health department, schools and the township.

Jobs provided under the new agreement will provide a boost to the tax base and local farmers and investors will again have a local market for their crops. In an ADM-issued press release, Matthew J. Jansen, vice president and president of the oilseeds business unit said, "the acquisition of Prairie Pride's soybean facility and partnership for the biodiesel business were attractive to us because they are aligned with our growth strategy and fit well with our integrated business model."

In addition to creation of jobs, the purchase could bring some revenue back to the city of Fort Scott.

While in operation, the biodiesel plant purchased $50,000 to $75,000 worth of wastewater from the city annually. The plant used an average of 340,000 gallons of water each day from the treatment plant at 601 S. Barbee St. in Fort Scott. A 6-inch water line was contructed to transport the water to Prairie Pride, located six miles east of Fort Scott.

Fort Scott City Manager Dave Martin announced during Tuesday's meeting of the Fort Scott City Commission that the city will be working to renew the contract for the wastewater.

Prairie Pride representatives are also excited about the new project. Marvin Oerke, board chairman said, "it's great for the farmers and the whole county."

According to Oerke, Decker was Prairie Pride's front man on the project.

Decker said he was pleased with the way the negotiations turned out. "It's a good thing," he said. "When looking at the other possibilities, this seemed to be a good choice."

Decker said ADM will own and operate the crushing and processing part, but PPI "still has ownership interest in the biodiesel side" of the operation. Decker said that "before long, you'll be out there mowing your grass and you'll be amazed at the number of trucks passing by."

No one has a definite timeline for when the plant will be up and running again.

At ADM's headquarters in Decatur Ill., media relations representative for ADM Jessie McKinney said there was no set date.

"It's going to take some time for us to bring operations on line," she said. Now that the deal has been sealed, things will move a little faster.

Decker agreed that there is no set time line for getting back under production, but he did say "everybody is running as fast as they can to make that happen."

Prairie Pride has been in Vernon County for about five years. It is a producer cooperative formed to convert member and locally grown soybeans into biodiesel fuel and soy meal for use in agriculture.

The Deerfield, Mo., plant began producing fuel in late 2007 and processing beans in 2008.

ADM is an agricultural giant that employees nearly 30,000 people.

The company turns crops into renewable product and has a diversity of agricultural interests and markets in more than 60 countries. Its net sales for the fiscal year ending in June of 2010 were $62 billion.

Michael Pommier contributed to this report.

© Copyright 2011 Fort Scott Tribune.