North Mo. ethanol plant a success

MALTA BEND, Mo. -- Some might say the two fuel-price signs that sit along this quiet section of Highway 65 in north-central Missouri are all the proof you need -- $2.31 a gallon, reads one; $2.86, says the other.

The difference? The more expensive option is garden-variety gasoline. The cheaper choice is a corn-based concoction hopped-up on 200-proof moonshine. It's a seemingly magic mixture that is highly touted as at least part of the solution for the country's increasingly dire fuel problem.

But magic it's not -- it's ethanol, a renewable fuel made from a complicated process that creates a potent, alcohol-based clear liquid that is being used to increase octane and improve the emissions quality of gasoline.

Those two contrasting signs sit in front of a gas station less than 3 miles from Mid-Missouri Energy, an 18-month-old ethanol plant in corn-rich Saline County that transforms 15 million bushels of corn into 40 million gallons of ethanol each year.

From many accounts in Saline County -- residents, economic development officials, farmers and government officials -- the plant has been a boon for the area. The plant has created high-paying jobs for residents while leading to higher prices for corn and big profits for the plant's owners: 726 corn-growers from 45 counties.

Things are going so well plant executives are planning a $50 million expansion that will double production, increase the number of jobs and perhaps drive up corn prices and profits even higher. They are doing so, in part, because of Gov. Matt Blunt's requirement that all gasoline sold in Missouri be 10 percent ethanol by 2008.

"It's a win-win situation," said Patty Kinder, the plant's assistant general manager. "How often can you say that about farmers?"

Mid-Missouri Energy, or MME, is one of the state's three ethanol plants, along with those in Macon and Craig, that produce about 115 million gallons of ethanol annually. The plant employs about 35 people. But with at least three plants planned in Southeast Missouri, economic developers here are keeping a close eye on how the existing plants are performing.

"I'm well aware of how things are going at the plant in Malta Bend," said Mitch Robinson, executive director of Magnet, an economic development group in Cape Girardeau. "I've heard about their success. We're hoping for that kind of success here."

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Malta Bend, about 300 miles from Cape Girardeau, sits along the Missouri River among a sea of corn, its agricultural roots stemming from those first settlers who came there in the early 1800s.

The town is home for 250 people. It's largely white, 98 percent white according to U.S. Census figures. More than half of its residents are married. Most graduated high school but opted against college.

Folks drive to Marshall, Mo., 10 miles down the highway, to shop at the new Super Wal-Mart. They stop in for a bacon cheeseburger or cigarettes at the town's only restaurant/convenience store, the Waggin Wheel.

U.S. Census figures say they live in $35,000 homes, on average, and make less than $30,000 a year.

And many of them farm.

Almost 120,000 of Saline County's 483,000 acres is dedicated to the production of corn, ranking the county in the top five counties in the state over the past five years.

And it appears that many of them have no problem with the ethanol plant.

Lee Roe, a 26-year resident of Malta Bend raking leaves in his back yard less than 2 miles from the plant, raves about it.

"It's made all the difference," he said. "We have cheaper gas, more jobs -- and the farmers here love it. Saline County is nothing but corn. Why not have an ethanol plant here?"

Roe has no complaints about the plant, which opened in February 2005. No foul odors have emanated from the plant, and he doesn't mind the tractor-trailers that thunder up and down Highway 65 delivering corn, the main ingredient of ethanol.

"I look at it this way," he said. "Use our corn to make money for our farmers or send the money overseas for foreign oil. What do you think the best option is?"

The only regret some have is that they didn't invest in the plant when they had the chance.

"Too bad I didn't buy no stock," said Saline County farmer Kenneth Dierker as he watched the mounds of corn fall from a truck into the plant's underground receiving conveyor. "I screwed that up."

Dierker is glad the plant is there. It's easier for him to simply unload his corn in five minutes at the plant than to drive 160 miles to a grain elevator and have to wait two hours in line. Plus, Dierker says he's getting 15 cents more a bushel than before the plant went up.

Farmer Brian Marshall agrees. Marshall, who farms on 1,000 acres 5 miles from the plant, said he sells every bit of the corn he grows to the plant, except for what he uses for animal feed.

"We're getting more for corn than we ever did before," he said. "We're really getting a premium."

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Ken Yowell, the director of the Marshall Chamber of Commerce, supports the ethanol plant. He likes that it's clean and automated and not too loud or obnoxious for the neighbors' sakes.

Yowell also thinks the ethanol plant has been a great advertisement for the city and no doubt has been great for area farmers.

The new plant hasn't been a cure-all. It hasn't given everybody a job -- it only employs 35 people. Businesses are seeing some increase in business, but not large amounts.

"It really hasn't affected anybody in town here," he said. "The payroll has been relatively small. It does bring people to come to town to see the plant. I guess we get a few hotel nights for that. Don't get me wrong, we're glad it's here."

The town's bigger concern has been the opening of the new Super Wal-Mart. "Several of our businesses have just closed their doors," Yowell said. "They don't want to take on Wal-Mart. But it's Wal-Mart that has brought in a lot of jobs."

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For 18 years, Patty Kinder, who now is assistant to the general manager at MME, was an economic developer in Carollton, Mo., just up Highway 65 in Carroll County. So she was in on the ground level at the plant's formative stage.

When her board of directors started inquiring about the possibilities for an ethanol plant in the area, $25,000 was quickly raised in donations from interested farmers to do a feasibility study. Soon, a 15-member steering committee formed. Strong interest was shown immediately, she said.

Over six weeks, 82 meetings were held as Kinder told any farmer who would listen about a chance to get in on the ground level. "I was putting on a little dog and pony show," she said. "I was telling farmers that they could improve the value of their corn and they could hedge against corn prices dropping. We could also reduce the amount of money we were sending to the Middle East."

She got their attention. Big time. During those six weeks starting in February 2003, $17 million was raised through farmer investors only.

"A farmers group hadn't done that before," she said, noting that they set a national record for producer investment at an initial offering.

By July 2003, they had all the money they needed to get started from 726 corn-growers from 45 counties. They used that as equity and borrowed the rest from an area bank.

Construction started in October 2003. By this time, Kinder had left her job and had become coordinator for the project.

Kinder still marvels at how quickly everything happened. It took only three years from the first meeting until MME ground its first corn for ethanol production in early 2005.

"We really didn't know what we had gotten ourselves into," she said. "It was such a big project. We had no idea how big."

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Not that everyone was in favor of the ethanol plant when it was first proposed. In 2003, the Saline County Commission voted 2-1 to grant a tax abatement agreement that excused the corporation from paying county taxes for 30 years -- until Dec. 15, 2033, or until it buys all $62 million of the Chapter 100 bonds back from the community.

Commissioners Becky Plattner and Richard Pemberton were in favor of the agreement and Commissioner Mike Dillon was opposed. At the time, Dillon questioned whether the agreement was good for the people of the county.

"I'm not opposed to the ethanol plant. I'm just opposed to the deal," Dillon told the Marshall News. "It's not the tax part, it's the fairness part to the citizens of the county. You're expecting everyone else to pay property taxes."

Plattner said last week that there were "a handful" of residents who were also concerned about giving up so much in tax money, likely millions of dollars in property taxes. Some residents believed that was a huge loss for a fourth-class county of 23,000 with only an $8 million budget.

But Plattner said getting the plant was worth whatever tax loss the county endured. First of all, she said, many of the owners of the project lived in Saline County, meaning it would benefit local residents.

Besides, she said, Chapter 100 bonds require that a corporation pay taxes on any expansion that are not funded by the bonds. The plant's expansion next year will mean the county and the city of Malta Bend will receive taxes on the expansion, though she's not sure how much yet.

"There was some controversy," she said. "But it wasn't large-scale controversy and it came from people who didn't understand the process. This was the first business in 31 years built to that size in this county. We were going to do whatever it took to get it.

"And we knew that those farmers weren't going to take a chance to build a $62 million plant to watch it go bankrupt in five years."

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County tax abatement wasn't the only incentive MME received. Part of Patty Kinder's job was to pursue state help, such as incentive money, and state and federal tax credits.

As an economic developer, she applied for and received a $200,000 grant from the Missouri Agricultural and Small Business Development Authority, which is a commission charged with helping new and expanding agricultural producers expand their operations.

The state granted $1.5 million in tax credits. A special state ethanol incentive fund didn't offer any financing the first year, but when the plant entered its second, MME received the maximum in a $3.125 million direct payment.

Catholic Charities even donated $45,000 as part of the agency's Rural Community Development program. "Incentives are crucial in enticing farmers to make investments," Kinder said.

She said people across the state were impressed with MME. "A project like this doesn't come along very often. Rarer still will it be related to and helping farmers. That's what I saw. That's what everyone saw."

Whether the plants proposed for Cape Girardeau and Scott County will be as successful as the one in Malta Bend is yet to be determined. None of the three has even broken ground yet.

"That's the million-dollar question," said Mitch Robinson, the Magnet director in Cape Girardeau. "That's what we're all waiting to find out."

smoyers@semissourian.com

335-6611, extension 137