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AGP plans $71.5M expansion of bean crushing operation at Port Neal

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AGP, soybeans unloading

Soybeans are unloaded at Ag Processing Inc.'s Port Neal facility in a Journal file photo. The agribusiness is planning a $71.5 million expansion of its bean crushing operation at the plant near Sergeant Bluff.

SERGEANT BLUFF -- Ag Processing Inc. is seeking over $1.4 million in state and local incentives to help finance a proposed $71.5 million expansion of its soybean crushing plant at Port Neal. 

State officials said the added capacity would allow the farmer-owned agribusiness to crush more beans grown in Siouxland. 

"AGP plans to upgrade the Sergeant Bluff soybean processing facility to increase the sustainable crush rate, which would allow AGP members to sell production locally in an area that supply historically exceeds crush availability," according to a state report to the Iowa Economic Development Authority Board released Thursday. 

The IEDA board will meet in Des Moines Friday to consider AGP's application for a total aid package of $842,000, which would include $500,000 in investment tax credits and $342,000 in sales, service and use taxes paid during the construction.

The state assistance is contingent on a local government match from Woodbury County, according to state documents. The county supervisors scheduled a special meeting Friday to consider the co-op's request for property tax abatement of $578,242 over five years.  

The project, which is anticipated for completion in the fall of 2023, would create two new jobs, according to the state documents. The complex currently employs 128.

The co-op's investment is projected to total $71.5 million, with $59.3 million in new machinery and equipment accounting for the largest expenditure.

The IEDA staff report noted AGP's competitors in the bean processing industry include ADM, Cargill and Bunge, all of which have a "significant overall U.S. presence, as well as a presence in Iowa."

"AGP currently processes only a fraction of the soybeans grown in the region. Since production of soybeans has and is expected to continue to grow, AGP does not believe there will be a significant impact to other current users of these inputs," the report said.

This is the latest major capital project at AGP's Sergeant Bluff complex in recent years.

In 2017, the co-op constructed a $90 million vegetable oil refinery, which refines beans at the site, and also completed a $38 million expansion of its biodiesel plant. 

It was the fourth expansion of the Port Neal biodiesel plant, which was the nation's first commercial-scale biodiesel plant when it opened in 1996.

The bean crushing facility was built by Farmland Industries in 1974 and purchased by AGP in 1983.

One of the nation’s largest cooperatives, AGP is owned by 149 local and regional cooperatives representing over 200,000 farmer-producers across the U.S. It operates 10 soybean processing plants in Iowa, Minnesota, Missouri, Nebraska, and South Dakota, as well as four soybean oil refineries, and three biodiesel plants.

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