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West Tennessee Oilseed Diversification Project
Business Development Overview
A project of:
The project is funded under an agreement
with the State of Tennessee
March 2009
mechanical, photocopying, recording or otherwise, without the prior written permission of Memphis Bioworks Foundation.
West Tennessee Oilseed
Diversification Project
Business Development Overview
March 2009
Project completed by:
Pete Moss, President
& Don Lossing, Consultant
Frazier Barnes & Associates Memphis, Tennessee
©2009, Memphis Bioworks Foundation. The purpose of this document is for the exclusive use in the development of a diverse oilseed production and processing business in West Tennessee. Any other use is strictly prohibited. The information contained herein is the property of Memphis Bioworks Foundation unless specifically noted otherwise. No parts of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic,
Tennessee Oilseed Diversification Business Development Overview
Frazier Barnes & Associates, LLC designed this business development overview to provide information and strategic direction for developing a diversified, seasonal oilseed business that maximizes regional advantages inherent in agriculture and superior logistical infrastructure in West Tennessee. The business development plan’s purpose is to assist potential organizers in the cultivation, processing and utilization of products and byproducts from diverse and developing oilseed crops in the “AgBio” region.
TABLE OF CONTENTS
Executive Summary....................................................................................................................5 Introduction...............................................................................................................................10 I. Oilseed Crop Identification ..................................................................................................11
A. Commodity Crops ........................................................................................................... 11 Soybeans .......................................................................................................................... 11 Cottonseed........................................................................................................................ 14 Sunflowers ........................................................................................................................ 17 Canola ............................................................................................................................... 20
B. Dedicated Crops .............................................................................................................. 27 High Erucic Acid Rapeseed............................................................................................. 27 Crambe .............................................................................................................................. 31 Castor ................................................................................................................................ 34 Flax .................................................................................................................................... 36 Camelina ........................................................................................................................... 39 Lesquerella........................................................................................................................ 42 Cuphea .............................................................................................................................. 43 Meadowfoam..................................................................................................................... 44 Pennycress ....................................................................................................................... 45 Coriander .......................................................................................................................... 46
C. Oilseed Ranking for AgBio Region ................................................................................ 47 D. Oil Properties ................................................................................................................... 49 E. Seed Supply & Development .......................................................................................... 52 F. Pilot Scale Development Facilities ................................................................................. 53 G. Algae ................................................................................................................................ 54
II. Markets ..................................................................................................................................57 A. Regional Processing Infrastructure.............................................................................. 57 B. Logistics.......................................................................................................................... 63 C. Industrial Oils.................................................................................................................. 68 D. Biomass Based Diesel ................................................................................................... 72
III. Strategy for West Tennessee Crusher..............................................................................75 A. Oilseed Processing Technologies ................................................................................ 75
1. Mechanical ................................................................................................................... 75 2. CO2 Mechanical............................................................................................................ 77
Memphis Bioworks AgBio March 2009 Business Development Overview Final
3 .. 78
....................................................................... 92 3. Rivergate Industrial Port .............................................. 94 4. Hardy Bottling Company.............................................................................................. 94
F. Oilseed Transport ............................................................................................................ 95
CV.
PrPr
VI. A
. Continuous Liquid Hydrocarbon Extraction ...........................................................4. Solvent Extraction ....................................................................................................... 78
B. Processing Technology Determination ........................................................................ 80 C. Processing Strategy for West Tennessee .................................................................... 83 D. Capital and Operating Costs ......................................................................................... 90 E. Potential Processing Locations .................................................................................... 91
1. Producers Mid-South Covington................................................................................. 91 2. Port of Memphis ....................................
................................................
G. Permitting Requirements................................................................................................ 96 IV. Project Development...........................................................................................................97
A. Strategic Partners............................................................................................................ 97 B. Potential Programs Applicable to Project ..................................................................... 97
1. State Programs ............................................................................................................. 97 2. Local Assistance Programs......................................................................................... 99 3. USDA/Federal.............................................................................................................. 101 . Project Estimate & Schedule ....................................................................................... 103
Conclusions & Recommendations ..................................................................................103 oject Conclusions .......................................................................................................... 103 oject Recommendations................................................................................................ 106 TTACHMENTS.................................................................................................................107
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Exe AninprbioilseaddiusesWes W
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products from oilseed crops that are currently suitable for production in the region. In the short term these include canola, high erucic acid rapeseed, high-oleic and traditional sunflowers. The medium-to-long term focus will include a wider variety of specialty oilseed crops that have unique and desirable properties. This document addresses hurdles ranging from breeding to processing that must be overcome to stimulate a critical volume of oilseed crop acreage. At the same time, it must be emphasized that the introduction of these crops will not require a volume of acreage large-enough to negatively impact the production of traditional crops in the region. The long-term objective of this plan is to establish alternative oilseed production in this region via introduction of local processing and delivery infrastructure. An identity-preserved processing facility would allow for regionalized production and consumption of value-added industrial oil products from seeds versus traditional crops which are in large part exported or shipped to distant processors. An oilseed crush plant located in West Tennessee would have to be appropriately sized so as to optimize identity preservation––including the ability to process organically certified crops. The processing facility would need to be sized small enough to facilitate campaign processing, with minimal switch times. However, the operation should be large enough to provide an acceptable economy of scale, which would translate into lower fixed costs per bushel or ton of seed processed. The selected processing technology is scaleable, allowing for incremental
cutive Summary
opportunity exists in West Tennessee and the surrounding region for the development of an dustry based on the production and processing of “alternative” oilseeds. The oil and by-oduct fractions of these seeds may be manufactured into an increasingly broad spectrum of oindustrial products and applications. The successful introduction and processing of these
eds in the region could provide a range of functional benefits, including the provision of tional planting options to local producers, stimulating research in new crop varieties and , introduction of base materials for value-added “green” products and the establishment of t Tennessee as a premiere agricultural and logistical hub for the emerging bioeconomy.
est Tennessee has a strategic advantage with respect to its superior inbound/outbound logistics, flexible agricultural economy, longer growing season and presence of transitional
emical manufacturing infrastructure. The diversification of oilseed production could play a undational role in the creation of an entire new “green” economic engine in the region focused
leochemical chemistry and plant breeding/genetics. This new value chain from farm-to-ry would create opportunities for farmers, new jobs, and locally sourced renewable raw rials for various industrial markets.
Needless to say, the transition of West Tennessee into a “green economy” based on value-ded processing of value-added oilseed varieties will not occur overnight. A collaborative fort must made on the basis of a developing network of key strategic partners. The first step is
to assist potential organizers in the cultivation, processing and utilization of products and by-
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
capacity as acreage is introduced. A 200 ton per day capacity is onsidered a benchmark minimum size for this type of operation, but could vary substantially
y rocessing operation utilizing CO2 mechanical technology––with suitable refining, storage,
ne or more area research institutions, and generating ommercial samples of oil.
expansion of processing cdepending on a range of factors including the amount of oilseed acres, availability of existing infrastructure at the selected location and the market premium associated with the oils. The processing technology needs to be the most efficient with respect to the percentage of oil extracted and at the same time environmentally friendly. Crown Iron Works Company, in conjunction with European technology provider Harburg-Freudenberger, offers a mechanical press enhanced with liquid CO2. The use of CO2 allows for a superior meal and oil quality. The percentage oil extracted is also enhanced versus traditional mechanical extraction technologies––vital to the economics associated with the plant. Assuming a 200 ton per daploading/unloading and working capital, the projected capital investment would be approximately $15 million. In addition to the agronomic work and development of a multi-feedstock crushing facility, it is recommended that a research pipeline of alternative oilseed crops be established that would include the production of novel oilseed plants at area research farms, harvesting the seeds, developing a bench scale processor at oc
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
inter canola, high erucic acid rapeseed and potentially camelina. Flax (linseed) an be produced in the region, but is not yet proven to be as competitive as other oilseeds.
ther oilseed crops researched include pennycress, crambe, coriander, cuphea, castor, lesquerella and meadowfoam. Pennycress has been produced successfully in Peoria, Illinois, but the crop has yet to be produced at regional test plots. Crambe has excellent market potential for the oil, but is sensitive to extremes of cold and heat. Due to crambe being a spring crop, significant crambe production could be difficult to establish in the southeast. Nonetheless an excellent local market exists for the erucic fatty acid present in crambe at levels up to 60%. Pennycress and coriander are both crops that may be viable for commercial production in the region, but further research needs to be conducted at test plots in order to determine proper production protocol for this climate. Current varieties of castor are not recommended for processing due to concerns with toxicity, the presence of allergens and difficulties with mechanical harvest. However, there is significant research being conducted in breeding varieties with reduced ricin and these varieties are being trialed in West Tennessee. In addition, there is work being advanced by the USDA with the objective of genetically engineering castor varieties that do not have ricin. If and when these technologies become feasible they will be developed in West Tennessee. Cuphea is considered a high maintenance crop with limited yield potential. It is not believed that cuphea could be competitive with other crops grown in the region at this time. Lesquerella and meadowfoam are both crops with excellent potential as sources of industrial oils, but current varieties are not suited to this region. The following table ranks oilseed crops evaluated based on their production potential in the study region. Soybeans and cottonseed have been omitted due to their current representation as primary oilseeds for the region. It is not the intent to reduce the production of existing oilseeds, but to supplement production with higher value oilseed products.
In order to properly ascertain the viability of this business approach, the study team has conducted an exhaustive analysis of all potential oil bearing crops and narrowed the field of viable options to those crops that have proven production capabilities in the region and/or have the potential for relatively mid-term breeding potential; the presence of unique or special properties that may be enhanced by growing in this region and have valuable markets; the ability to be produced on a large enough scale to be economically viable, but small enough to fulfill emerging specialty markets and offer diverse transitions; and the ability to add value according to market demand and inherent qualities contained within the seed that can be realized through processing. Based on numerous inquiries with agricultural researchers and crop research stations, the study team believes the most viable crops with respect to production potential in the region are sunflowers, wcCamelina shows great promise as a low-input winter crop. It should also be noted that due to the extraordinarily short period to maturity for camelina (85-100 days), it may be possible to plant back to back winter and spring crops, with final harvest in June in time for a late soybean crop. O
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Ranking of Potential Oilseed Crops Oilseed Ranking Fatty Acid/Oil PropertySunflower 1 Oleic Fatty Acid; Industrial and Food Oil UseWinter Canola 2 Polyunsaturated Oil; Industrial and Food Use; Biodiesel FeedstockHigh Erucic Acid Rapeseed 3 Erucic Acid Utilized in Numerous Industrial ProductsCamelina 4 Biodiesel and Oleochemical Refinery Base FeedstockFlax 5 Linolenic Acid; Oleochemical and Health Food UsePennycress 6 Biodiesel FeedstockCoriander 7 Petroselinic Acid; Use in Industrial and Cosmetic ApplicationsCrambe 8 Erucic Acid Utilized in Numerous Industrial Products
9 Medium Chain Fatty Acids; Lubricants, Soaps and DetergentsCupheaCastor 10 Ricinoleic Acid; Numerous Industrial UsesMeadowfoam 11 Long Chain Fatty Acids; Waxes, Lubricants, Detergents & PlasticizersLesquerella 12 Hydroxyl Fatty Acid; Potential Substitute for Castor Oil
There are a number of other potential oilseed crops that are not at present suitable for commercial production in the Tennessee study region, but could present options as viable varieties are developed. These include: Borage , Brassica Juncea, Calendula, Echium, Euphorbia, Jatropha, Jojoba, Kenaf, Lupin, Milkweed, Okra, Safflower, Stokes Aster, and
ernonia Galamensis. The establishment of currently viable varieties will lay the foundation for
pen ponds allow for much higher volume production and ould represent a more agronomically focused option. A comprehensive feasibility study on
egion. All users are eeking more oil at competitive market prices with specific oil characteristics that are present in
Vnewer, higher value oilseeds in the future. Algae is currently being explored throughout the country a potential source of biomass and biofuel. Interest in commercial development of algae is not new, but efforts have been revitalized due to the high energy prices experienced in the last five years. Most literature and documented algae research suggests that algae production, harvest and extraction is not economically viable at this time. Algae research is segregated into enclosed photobioreactors and open ponds. Photobioreactors allow for increased control of process variables, but at significantly higher capital cost. Ocopen pond algae production, harvest and extraction from an engineering perspective has been completed by a researcher at Auburn University1. Additional research and commercialization efforts will be required to make algae a viable oil source. The Tennessee Oilseed study team has identified a number of industrial users, including biofuel and non-biofuel processors, which are demanding bio-based oil in the rsthe higher ranking crops identified. Although biodiesel represents the single largest industrial market for oils and fats, there is considerable demand for new oilseeds to provide feedstock to produce fatty acids, fatty esters, glycerin approved for pharmaceutical applications, glycerol esters, amides, bisamides, stearates and triglycerides.
1 Algae As A Biodiesel Feedstock: A Feasibility Assessment. Ron Putt. Auburn University. April 7, 2008.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final For oilseeds identified, a d edatabase of information is being creat to include the following important characteristics:
Oil content (Percentage) Oil stability Fatty acid composition Cold Flow characteristics Lubricity characteristics Erucic acid percentage
In addition, the following information is being documented to assist in the developmental process of the selected oilseeds:
o Identification of specific genetic suppliers various oilseeds o Calculation of seed cost to the grower for selected varieties
Assessment of the yield characteristics and harvesting impediments
far will facilitate the next phase of the project – the evelopment of a plan to process the value-added crops and capture the inherent value within
oo Evaluation of the “processability” characteristics of each oilseed
Oil content Fiber content (Hull or Bran component) Meal suitability for consumption – Human or Livestock
The database of information collected thusdthe crops. The implementation of the Tennessee Oilseed Diversification Business Plan will have a dramatic and positive impact on the production of higher value oilseeds in the region. Tennessee is well positioned to be a leader in the production, processing and distribution of new industrial crops that attract new investment and the creation of new industries and green jobs for the entire region.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Frazier Barnes & Associates, LLC designed this business development plan to provide information and strategic direction re multiple oilseed extraction operations in W for such a facility would be sourced from a regional area, comprised of western Tennessee, eastern Arkansas, northern Mississippi and the Missouri Bootheel was considered for feedstock ourcing. The b in s purpose is to assist potential organizers in the
Introduction
for the installation of one or moes Tennessee. Since oilst eedsthe 83 county “AgBio” region
sc
us ess development plan’ultivation, processing and utilization of products and byproducts from diverse and developing
oilseed crops in West Tennessee, by concentrating public and private resources towards a common vision.
AgBio Region Counties
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Memphis Bioworks AgBio March 2009 Business Development Overview Final I. Oilseed Crop Identification
A. Commodity Crops oybeans
Soybeans are the primary oilseed crop in North America and within the AgBio region. The U.S. produced almost 2.6 billion bushels of soybeans in 2007 and is expected to produce around 3 billion bushels in 2008. There are approximately 67 solvent extraction soybean processing facilities located in the U.S., with the majority being situated in the Midwest. A listing of solvent extraction oilseed plants, including those processing soybeans is provided in Attachment I. A number of smaller mechanical extraction operations also exist. Over 80% of the processing capacity in the U.S. is owned by Archer Daniels Midland, Cargill, Bunge, Ag Processing and Cenex Harvest States. Recent additions to the processing industry include Louis Dreyfus plant in Claypool, Indiana and Prairie Pride in Nevada, Missouri. These major multi-national agricultural product companies have generally positioned themselves with large centralized facilities in order to realize processing economy of scale. Riceland operates a 1,500 ton per day soybean cooperative processing facility in Stuttgart, Arkansas. The operation represents the extraction soybean processing facility in the region, although Prairie Pridestart-up phase for its 2000 ton per day facility in Nevada, Missouri. Bungewas closing its 2,700 tpd plant in Marks, Mississippi in 2007. A map ooperations in the U.S. is included in Attachment I. Two small mechanical extraction operations are located in Arkansas. ArkGroup operates a mechanical extraction facility at Dewitt, Arkansas which produce 4.5 million gallons of soybean oil. England Dryer and Elevator opemechanical extraction facility in England, Arkansas which supplies apprallons of oil annually. Soybeans predominate as the primary oilseed crop
This section will examine the potential for oilseed crops produced on a commodity scale, oilseed crops for which contract premiums are typically paid to farmers to produce under identity preservation (IP) production and storage protocols (dedicated crops) and those crops which are not widely produced but have attributes highly desirable for industrial use (niche/developing crops). Soybeans and cotton are examined with regard to their strong regional production and opportunities to co-process with other oilseeds. Other crops, such as canola and sunflowers, include regional production protocols in order to provide a basic understanding of how each crop may fit into a mid-South Mississippi Delta rotation production scheme.
S
s
g
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Figure 1 Soybean
only active solvent is currently in the announced that is f solvent extraction
ansas Soy Energy has the capacity to rates a small scale oximately 1 million in the AgBio region,
Memphis Bioworks AgBio March 2009 Business Development Overview Final
k for a multiple oilseed processing operation. Soybeans re direct extracted in solvent crush plants versus using the prepress step utilized on high oil
ased oleic content offers proved oxidative stability, making any high-oleic content oil useful for industrial (and edible)
oybean Board has instituted the QualiSoy® program, which has the ybean to ensure soybean oil’s market share.
. soybean varieties can carry producer premiums of up to sixty cents or higher. an extraction plant
t in the meal (≈8%) versus
a wide range of industrial d utilization of soybean oil biodiesel produced in the historical cost per gallon
and could represent a base feedstocacontent seeds. Approximately 21 billion pounds of soybean oil is produced in the U.S. annually. Soybean oil is predominantly used for edible purposes, but continued growth in biodiesel production will account for an increasing share of the soybean oil market. There is some interest in increasing the oil content in soybeans from the typical 18% to 20% range. However, the primary focus of genetic development has been for lines more suitable for edible purposes, such as low-linolenic and high-stearic varieties. Pioneer® (Dupont) is currently developing a variety of soybeans with 80% - 90% oleic fatty acid. Increimapplications. The United Sspecific objective of developing varieties of soSpecialty I.PProcessing of commodity soybeans on a competitive basis typically requiressize in excess of 800 -1,000 tons per day if solvent extraction is utilizeextruder) extraction is less efficient due to the large quantity of oil lefsolvent (<1%). Soybean oil is widely used as a biodiesel feedstock, as well as in products. Soybean Oil prices over the last two years have diminisheas a feedstock at many biodiesel locations, however, the majority of U.S. is still derived from soybean oil. The following chart indicates theof soybean oil over the past 18 months:
d. Mechanical (expeller or
Soy Oil Feedstock - Historical Pricing
$5.000
$5.500
$6.000
$2.500
$3.000
$3.500
$4.000
$4.500
$/G
allo
n
$2.000
$1.500
2/12
/200
7
3/12
/200
7
4/12
/200
7
5/12
/200
7
6/12
/200
7
7/12
/200
7
8/12
/200
7
9/12
/200
7
10/1
2/20
07
11/1
2/20
07
12/1
2/20
07
1/12
/200
8
2/12
/200
8
3/12
/200
8
4/12
/200
8
5/12
/200
8
6/12
/200
8
7/12
/200
8
8/12
/200
8
9/12
/200
8
Date
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
(Millions of Pounds)
Source Data: USDA
Total estimated industrial use of soybean oil in 2008 is reported by the U.S. Census Bureau at 3.1 billion pounds, or almost 15% of total soybean oil production. In addition to biodiesel, soybean oil is used in the following products:
• Building Materials - Adhesives, Carpet, Wood-like Composites, Insulation • Candles • Crayons • Fiber - Soysilk • Foam - Chair and Sofa Armrests as well as Truck, Car and Tractor Seats • Lubricants and Hydraulic Fluids • Paints and Coatings • Inks • Dust Suppressant - Made from Soybean Soapstock • Adjuvants for Herbicides and Pesticides • Solvents • Toner in Laser Printers
The following table indicates the overall consumption of soybean oil for industrial purposes in recent years.
Soybean Oil Industrial Consumption & Compounded Annual Growth Rate
2001 2002 2003 2004 2005 2006 CAGRSolvents and specialty 9.5 11.01 17.51 19.3 21.87 23.38 16.19%Paints, coatings and ink 166.28 192.67 202.72 251.87 248.19 254.26 7.33%Lubricants 3.8 5.5 7.37 9.65 16.17 20.46 32.39%Polyols and plastics 123.52 119.27 124.4 145.72 193.04 214.32 9.62%Soaps, amines, etc. 237.54 238.55 234.97 270.2 266.26 272.76 2.33%Biodiesel 35.21 104.72 137.19 183.57 556.29 1655.43 89.89%Others 9.5 91.75 18.4 19.3 9.51 9.74 0.42%
Source Data: United Soybean Board
Soybean oil has the following major fatty acid composition:
Soybean Oil Fatty Acids %16:0 palmitic 10.318:0 stearic 3.8018:1 oleic 22.8
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18:2 linoleic 51.018:3 linolenic 6.80
PMC Biogenix and Helena Chemical Company are the largest users of soybean oil for industrial purposes in the AgBio region. PMC Biogenix (formerly Chemtura) operates a refinery in
emphis that is one of the largest producerMC
s of fatty acids from fat and oil splitting. Helena hemical o r an oil.
Soybean oil ed low enough relative to rack diesel prices. One acre of soybeans will yield approximately 450 pounds of soybean oil, assuming a 40 bushel per acre yield. Soybean m l d 44% protein there is no dehulling. Soybean meal represents approximately 75% of the soybean, whereas ap o Poultry and catfish predominate as the primary market for soybean me l the range of $360 per ton. Protein in t also synthetic fibers, glues, foams, foam-forming agents. So ≈40%) and are included as a feed ingredient b ogastric diets. Current prices for soybean hulls are approximate hulls of ome cultivars have a high peroxidase activity,
Conclusion: Soybeans may represent a potential base processing stock for the proposed facility until sig region. Howeve nola or sunflowers. Cottonseed Approximately 6 million tons of cottonseed was produced in the U.S. in 2007. Cottonseed processing has gradually decreased with the decline of cotton acres in the AgBio region over the last three years. The decline in cotton acreage has primarily been a result of increased plantings of corn and soybeans planted for biofuel production, although the number of textile manufacturers has also declined in the U.S. over the last several years lowering the domestic cotton price to the international price. Cotton acreage declined over 30% regionally between 2007 and 2008, as indicated in the following table.
pe ates a refinery in West Helena which manufactures adjuvants from soybeis y essentially all biodiesel production facilities in the region if pric utilized b
ea contains approximately 48% protein if hulls are removed (hi-pro) or aroun
pr ximately 5% is hulls. a locally. Current prices (09/08) for Hi-Pro meal are in
nimal food, he extracted meal is used for human and aybean hulls are high fiber (
in oth ruminant and monly $170 per ton. Soybean s
100-fold greater than that of cultivars containing low activity. Hulls from cultivars with high activity were used in the 1990s as a commercial source of peroxidase for industrial products.
nificant quantities of higher oil content seeds can be cultivated within the r, processing steps vary significantly between soybeans and seeds such as ca
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Arkansas Mississippi Missouri T Total
300,000 1,667,008
uth Planted Cotton Acreennessee
Midso s
2001 1,080,000 1,620,000 405,000 620,000 3,727,001 2002 960,000 1,170,000 380,000 565,000 3,077,002 2003 980,000 1,110,000 400,000 560,000 3,052,003 2004 910,000 1,110,000 380,000 530,000 2,932,004 2005 1,050,000 1,210,000 440,000 640,000 3,342,005 2006 1,170,000 1,230,000 500,000 700,000 3,602,006 2007 860,000 660,000 380,000 515,000 2,417,007 2008 700,000 365,000 300,000
Source Data: USDA
The decline in cotton acreage in Mississippi has been particularly sharp over the last two years. The following chart indicates the overall decline versus soybeans, corn and wheat.
Mississippi Crop Shifts ‐ Planted Acres
2,500,000
2,000,000
‐
1,500,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
500,000
1,000,000
Wheat Al l Rice Al l Corn for Gra in Cotton Soybeans
Source: USDA
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Memphis Bioworks AgBio March 2009 Business Development Overview Final In addition to declining cotton acreage, there are a declining number of cottonseed gins available to supply seed to regional processors. There are four cottonseed processing operations located in the AgBio region - Southern Cotton Oil Mill in Memphis (owned by ADM), Delta Oil Mill in Jonestown, Mississippi, PYCO in Greenwood, MS and Planters Oil Mill in Pine Bluff, AR. Cottonseed oil has at times been utilized as a biodiesel feedstock, but currently is valued too highly in edible oil markets.
ad , there are a declining number of available to supply ed
less efficient ource of oil than canola or other high-oil content seeds which have oil content around 40%. An
acre of cotton will produce about 220 pounds of oil. Cottonseed meal contains gossypol, which restricts its inclusion in laying hen diets and the meal protein content averages approximately 6-8% lower than soybean meal. The high value of cottonseed oil and decline in cotton acreage may present an opportunity for idle processing capacity to be employed in the processing of other oilseeds. It is known that Producer’s Cooperative Oil Mill in Oklahoma City, Oklahoma has installed a prepress system to a cottonseed crusher to enable it to effectively process canola, sunflowers and high erucic acid rapeseed. Monsanto and John Deere have highly supported development of canola in Oklahoma and other Great Plains states. Retrofitting an existing solvent extraction cottonseed facility with mechanical prepress capability (suitable for oilseed >30% oil content) could potentially be an option in order to expand alternative oilseed acreage in the region. However, retrofitting oilseed production facilities for new feedstocks presents challenges with respect to maintaining a consistent supply of different oil and meal products to respective markets. In past research, FBA determined that retrofitting a cottonseed processing facility for canola processing would entail additional operating costs approaching $20 per ton of seed processed. Cottonseed oil contains the following major fatty acids:
Cottonseed Oil Fatty Acids %
In ditioncottonseed ginsc
se to regional ottonseed processors.
hole cottonseed contains approximately 17% oil content, making it an overall
14:0 myristic 0.8016:0 palmitic 22.718:0 stearic 2.3016:1 palmitoleic 0.8018:1 oleic 17.018:2 linoleic 51.5
Figure 2 Cottonseed
Ws
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Conclusion: Retrofitting of existing cottonseed proceprocessing of high-oil content oilseed crops, in additiopresent a viable commercial opportunity for the introdregion. However, this option would likely represendedicated alternative oilseed crusher once significant a Sunflowers Sunflowers represent a viable option for producers iAgBio region. The crop
18:3 linolenic 0.2020:4 arachidonic
ssing capacity in the AgBio region for n to existing cottonseed requirements may
uction of alternative oilseed crops in the t an intermediate step to constructing a creage is attained.
n the has been successfully grown in
everal local locations including Pine Bluff and Newport, AR
has approximately 42% oil ontent. The seed is extraordinarily light, leading to the
sand Portageville, MO. Sunflowers are planted in April-May and harvested in late August through September. The crop should not be planted on the same plot in more than a three or four year period due to the potential for disease and pest infestations. Sunflower seed cpotential for loss at harvesting. One bushel of sunflower seeds will typically weigh between 24-32 pounds, making transport and storage somewhat less economical versus crops Sunflower meal contains approximately 35% crude protein if seed is not. Sunflower hulls can be either included in the meal or utilized Sunflower hulls contain 8300 - 8500 BTU per pound. Sunflower mfeed value relative to soybean or canola byproducts. Sunflower meaaround 50% to 60% the price of hi-protein soybean meal if dehincorporated in processing, sunflower meal values will approximate soybean meal. A potential use for sunflower hulls is bio-remediation.of Cape Town, South Africa (www.sunsorb.com) has developed a prohulls to clean up oil and other hydrocarbon (mostly petroleum and pe
0.10
n land and water.
n acre of sunflowers will yield about 720 pounds of oil, assuming typper acre). Sunflowers are a fairly drought tolerant crop, and have a wMay). Sunflower production predominates in the wheat producing amajority of sunflowers are grown in the Midwest, with North DaSunflowers require between 90 to 100 days to maturity. Seed counpound. The number of plants per harvested acre typically ranges fromextraction sunflower processing plants are located in the following loca
Name Location
o A
North Goodland, Kansa ern Sun s
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Figure 3 Sunflower Crop
with higher test weights. dehulled, or around 28% if as a biomass fuel source. eal and hulls have limited l will typically be priced at ulled. If no dehulling is 40% or less that of hi-pro Sunsorb Absorbents Ltd, duct made from sunflower tro-chemical based) spills
ical yields (1500 - 2000 lbs ide sowing window (April - reas of the country. The kota leading production.
ts approximate 82,000 per 15,000-25,000. Solvent tions:
Memphis Bioworks AgBio March 2009 Business Development Overview Final
North Redwing, Minnesota ern Sun Mont Culbertson, Montana ola Growers ADM Enderlin, North Dakota Cargill West Fargo, North Dakota Producers Coop Oil Mills Oklahoma City, Oklahoma
Sunflower production in the Southeast is constrained by the strong presence of corn, soybeans and cotton, as well as the lack of a processing outlet. Sunflower oil commands a strong market remium over soybean oil in edible markets, with NuSun® and p High-oleic varieties
over traditional varieties. High-oleic sunflower oil has monounsaturated fat levels or higher. This sunflower oil is used in food and industrial applications that require
re also contracted in some parts
a replacement to linseed oil for over time like linseed oil.
osition:
%
predominatingf 80 percento
higher levels of monounsaturated fats. High-linoleic varieties aof the country. High-linoleic sunflower oil contains fattpolyunsaturated. High-linoleic sunflower oil can be used asdrying applications. High-linoleic sunflower oil does not yellow High-oleic sunflower oil has the following major fatty acid comp
Sunflower Fatty Acids
y acids that are 69 percent
16:0 palmitic 3.7018:0 stearic 4.3022:0 behenic 1.0018:1 oleic 82.620:1 eicosenoic (gadoleic) 1.0018:2 linoleic 3.6018:3 linolenic 0.20
ACH Food Companies corporate headquarters are located in Memphis, Tennessee. The company contracts large quantities of high-oleic sunflower oil for both edible and some industrial uses. ACH has retained Technology Crops International Inc. to do the acreage contracting for all high oleic sunflower production. Trisun® is the brand under which ACH markets its high oleic sunflower oil to U.S. food and industrial products manufacturers. ACH does not operate any manufacturing or refining facilities in Memphis, however. PMC Biogenix is also believed to
Crop: Sunflowers (Helianthus Annu
procure certain quantities of high-oleic sunflower oil. Producers in the AgBio region would have the option of producing traditional, NuSun® or high-oleic variety sunflowers. Sunflower oil is too valuable for food use to be used as a biodiesel feedstock. However, Riceland Foods in Stuttgart, Arkansas and ConAgra Foods in Memphis both operate edible oil refineries in the region that may represent a potential edible oil market. The following production protocol is recommended for sunflowers produced in the AgBio region:
s) Planting Period: April - May
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Field Prepar or No-Till Dependin ements ation: Till g on Herbicide RequirPlanting Me /2 inches deep thod: 1 to 1 1Seed Per Ac 3 to 4 lbs. per acre: 15 acre re: 000 to 25000 plants per Harvested: eptembLate August - S er Growing Days: 90-100 Optimal (°F) 63° - 93° Soil pH 6 to 7.5 Soil Texture/Type Medium to Light Precipitation 24 to 39 inches Soil Drainage Well Diseases Pythium, Phytothora, Rust, Rhizoctonia, Cercospora, Powdery Mildew,
Cephalosporium, Sclerotina, Verticilium wilt
Insects Sunflower Head Moth, Sunflower Clipper Weevil, Grasshoppers and Caterpillars
Insecticides Asana, Baythroid, Furadan, Endosulfan, Lorsban, Parathion, Permethrin, Stryker, and Warrior
Nitrogen (N) 50 lbs. preplant, 75 to 100 lbs per acre at 10 to 12 inches plant height
Phosphorus (P) 25 to 30 lbs./ t (medium soils) acre preplan
Potassium (K) nt (medium soils) 30 to 40 lbs./acre prepla
Boron (B) t loam soils Sandy and sil
Weed Control replant herbicide and tillage; Treflan, Prowl, Sonalan and ndup or paraquat can be used o burndown
Combination pEptam; Rou prior t
Potential Varieties Suitable in Region
riumph 658, Cropland CL 380, Monsanto DK 3900, Kaystar 9501, TCropland CL 821
Bird Control Measures
(propane cannon, etc.), Planting away from woods, tree arshes
Killing, Scaringlines or cattail m
Harvest Ready when back of the heads turn yellow; Platform, row-crop or corn heads modified with a stationary cutting knife; Addition of pans to the front of the platform and/or modifying the reel can improve efficiency of platform heads; Combine settings: Reduce airspeed, bottom screen 3/8 inch and top screen 1/2 to 5/8 inch; Cylinder speed 250 to 400 rpm
Rotation Protocol Full Season or Double Crop; One in three or four year rotation Residual Herbicide Constraint
Triazine herbicides can be problematic; Should not be planted where herbicide carryover is a problem
Rotational Benefits Rotations with soybeans may add in cyst nematode; Reduced corn borer risk with corn
Storage 10% moisture or less; 8% in summer months; Sunflower drying has risk of fire hazard
Transport Low test weight (28 -32 lbs per bushel); Tarping may be required
Weed Competition Competitive with most weeds
Miscellaneous lows for heads to lean on row space Planting rows north and south al
* Sunflower sources provided in Attachment IV
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Memphis Bioworks AgBio March 2009 Business Development Overview Final According to regional crop researchers, harvest and crop damage from birds (primarily blackbi the g good sunflower crops. Scaring or direct killing is e e birds. At some locations, propane cannons have b effectively. Combines should be modified in order to accommodate harves t. Platf -crop or corn heads modified with a stationary cutting knife can be used at harvest. Airspeed and cylinder speed need to be reduced as well. If possible, it is recommended that sunflowers be planted as far as possible from woods, tree lines and cattail marshes. It is recommended that sunflowers be planted in rows facing North and South in order for the on row ptable in this reg de Monsa 380, and Cropland CL 821. According to a Monsanto reprcosts b $260 and $ imately 10 acres. Conclusion: Sunflowers rep The crop could be gr h other regional crops if suitable processing capacity existed in the reg Canola The te refers produces high quality oilCanola sless th idglucosi am of mrapese roduce ca(musta ) is the moDakota is by far the larg910,000 acres of canola
produc nlargest traction M’s processinDakota roEnderlin, North Dakota. ly, Producer’s Cooperative OOklahoma began processin Winter a viable September through early October and harvested in late May throughthe pot m lds and value ofbe rotated with wheat on a
so viable. Canola should not be p
rds) represent two most substantial difficulties in attaininffective in deterring th
een utilized ting the plan orm, row
heads to ion inclu
lean space rather than on each other. Sunflower varieties accento DK 3900, Kaystar 9501, Triumph 658, Cropland CL
esentative, a 50 pound bag of sunflower seed 300. One bag will supply enough seed to plant approxetween
resent a viable oilseed for production in the AgBio region.own competitively wit
ion.
rm “Canola” to a variety of oilseed rape that and a high value animal feed.
is an edible rapean 2% erucic ac
eed that has been bred to contain and less than 30 micromoles of
eal. There are several species of nates per gred that prd family
nola varieties, but Brassica napus st common one in the U.S. North est producing canola state, with planted in 2008, 90% of all US
tion. Minnesota a canola ex
d Montana accounted for most of the baoperation in the U.S. is AD
. Some canola p cessing also occurs at ADM’s multiple oilMore recentg canola and offering bids to local produce
canola is option for the Southeastern U.S. Winter
ential to outperfor wheat with respect to yien annual basis or double-cropped with a la
cropping with grain sorghum is al
Page 20 of 118
Figure 4 Canola Crop - Agricenter
tion. Theg facility in Velva, North cility at
il Mills in Oklahoma City,
lanted in late early June. The crop has production. The crop can
p. Double-lanted on the same plot in
lance of produc
seed processing fa
rs.
canola is p
te soybean cro
Memphis Bioworks AgBio March 2009 Business Development Overview Final more than a three or four year period. The crop is also sensitive to broadleaf herbicides, so
g involves cutting the crop and placing it in rows directly on the cut stubble. This hastens
e drying rate of the crop, ensures even ripening and reduces the possibility of seed losses
e of ripening reduces green seed problems and seed shatter losses and ensures e quality required for top grades and prices.
Swathing Canola
fields where these types of herbicides have been used the previous season should be avoided. The most notable research with regard to winter canola in this region has been conducted by Dr. Robert Bacon at the University of Arkansas Division Of Agriculture Cooperative Extension Service. The average yield between Marianna, Kibler and Fayetteville experiment locations was 2,308 lbs. per acre for the period 1999 - 2004. However, the crop is more risk intensive than wheat, with a significantly narrower window for harvesting. Shattering at harvest is a continuing problem for production in the region, particularly if bad weather occurs during harvest. Successful cultivation of canola in this region will require increased familiarity and attention to production protocol by local farmers. According to a representative of Shoffner Farms in Newport, Arkansas, yield loss from shattering during harvest will approximate between 200 to 400 pounds per acre, 9-17%. In order to minimize shattering loss, swathing is recommended. Swathinthfrom wind and hail. After the crop dries to a uniform seed moisture content of 8 to 10% moisture (usually five to 10 days after swathing), it is ready for harvesting. Swathing canola at the optimum stagth
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Source: North Dakota State University and Canola Council of Canada
Swathing is recommended for not only canola, but most of the oilseeds examined in this study (except sunflowers, soybeans and cottonseed). Shattering and yield loss are a significant obstacle to the establishment of alternative oilseed crops in this region. Investment in swathers may be essential in order to establish various oilseed crops within the region. A new swather will typically cost in excess of $100,000. A more economical option to investme e of a “canola pusher.” Pushers bend the stems over just above the drower (swather). This allows the crop to ripen while reducing the st ring by the wind. When mature, canola is then direct comb The method has reportedly achieved satisfactory resu A new canola pusher is expected to run approximately $20,000.
Canola Pu
nt in a swather is ussoil surface rather than cutting the stems with a win
em movement and shatteined in the opposite direction of the pusher.
lts in the Great Plains states and Canada.
sher
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Pushing Canola
he Monsanto canola marketing trait manager, a 50 ound bag of fully treated Roundup Ready canola seed will cost $260. Approximately 5 pounds
higher for canola than wheat. urrent Monsanto Canola Seed Prices with Seed Treatment (50 lbs.):
Roundup Ready varieties ofconventional canola varieties.
Source: North Dakota State University and Canola Council of Canada Roundup Ready varieties of winter canola seed are available from Monsanto, Croplan Genetics, Pioneer Hi-Bred and Asgrow. According to tpof seed are recommended per acre, totaling $26 per acre. There have been some reported issues with glyphosphate volunteer canola in soybeans. However, volunteer canola is reportedly easy to kill, according to some Monsanto and producers at Shoffner Farms. Products that can be used to kill canola include Valor and ALS herbicides e.g. Raptor, Cadre, Scepter, Sofonyl ureas. Canola stands in the Midwest have yielded returns $110 per acre higher than that of wheat. This is net of seed and other inputs which run $35 to $40 C
DK 13-62 – 209.50 DK 13-69 – 254.50 DK 13-86 – 239.50 DK 41-10 – 254.50 DK 45-10 – 264.50 DK 46-15 – 259.50 DK 47-15 – 259.50
winter canola will typically afford higher yields and returns than
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Oklahoma Sta Trial Results te Canola System
Source: Monsanto As with , the primary hindrance to canola production in the region is the lack of significant processing capacity. Canola meal has approximately 34-38% crude protein and carries a significant premium in dairy cattle diets. Canola meal typically carries 60% to 80% of the value of hi-pro soybean meal. Canola oil is widely utilized in various culinary applications. The oil may in some circumstances e utilized as a biodiesel feedstock. PMC Biogenix (Chemtura) may represent a local market for
gra’s refinery in Memphis would both represent potential edible markets for the oil. Canola quality rape seed (OO var.) have virtually no nutritionally undesirable long chain fatty acids and can be further improved by decreasing the linolenate content from 10% to 3% which gives enhanced shelf life. For industrial appli ations, a high oleic acid content (80-90%) is
other oilseed crops
buse of canola oil in industrial applications. As with sunflower oil, Riceland Foods refinery in Stuttgart, Arkansas and ConA
c
Page 24 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final preferred due to its suit extraction. Canola oil has the following major fatty acid composition:
Canola Oil Fatty Acids %
ability for certain chemical reactions and ease of
16:0 palmitic 4.0018:0 stearic 1.8020:0 arachidic 0.7022:0 behenic 0.4024:0 tetracosanoic 0.2016:1 palmitoleic 0.2018:1 oleic 56.120:1eicosenoic (gadoleic) 1.7022:1 erucic 0.6018:2 linoleic 20.318:3 linolenic 9.30
Industrial uses for canola oil include:
• Food Grade Lubricants • Hydraulic Fluids • Metal Working Fluids • Steel Casting Lubricant • Chain Bar Lubricant • 2-Cycle Engine Oil
The following production protocol applies to canola:
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Crop: Winter Canola (Brassica napus) Planting Period: Late September-Oct 10 North of Memphis; Through
October 30 south of Memphis Field Preparation: red Tilling PreferPlanting Method: -1/2 inch;
eeper than 1/2 inch decreases yields Grain D
Drill; 6 to 7 inch rows; Seed Depth
Seed Per Acre: 6 Pounds Harvested: te May/Early June LaGrowing Days: 80-340 2Optimal (°F) 77° 50° to Winter Minimum (°F) -4° Soil pH 5.5 to 7.6 Soil Texture/Type Medium to Light Precipitation 20 - 39 inchesSoil Drainage Well Diseases Phytothora, Sclerotina, Blac Rhizoctonia,
ercospora, Anthrachose, ery Mildew kleg,
C PowdInsects
Seedpod Weevil; Insects typically not a problem Aphids, Caterpillars, False Clinch Bug, Grasshopper,
60 Lbs. Per Acre Early January + 60 Lbs. Early Nitrogen (N) February
P s evels >35 PPM = 0; 26 to 35 ppm = 50 lbs.; 16-25 ppm = 60; <16 ppm = 90 Lbs.
ho phorus (P) P L
P s 0 ppm = 0;91-130 ppm = 60 lbs.; 61-90 = 90 lbs.; < 60 ppm = 140 lbs. in split
applications
ota sium (K) K Levels > 13ppm
S h 20 Lbs. S Per Acre in preplant or December/January Applications
ulp ur (S)
Boron (B) B on alkaline silwith preplant fer
t loams; 1 lb. per acre (granular B) tilizers or foliar application of .3 lb per
acre December/January Weed Control Trifluralin (Treflan, etc.) - typically applied preplant;
and sethoxydim (Poast); Potential Varieties Suitable in Region
Jetton, Ceres, Wichita and Plainsman; Monsanto Roundup Ready Varieties
I.P. Constraints High Erucic Acid Rapeseed (HEAR) kept 50 feet from canola at all times; HEAR I.P. Protocol includes cleaning of equipment and storage to avoid potential contamination of canola
Harvest Swathing when 2/3rds of Plant is Brown is Ideal; Combine - Platform Head; Cutter set just below seed pods; Cylinder speed = 450 -650 rpm; Concaves = 3/4 inch in front and 1/8 to 1/4 inch in the rear; Air speed = 400 to 600 rpm; Top sieve set at 1/4 to 3/8 inch and bottom sieve at 1/8 to 1/4 inch; DIRECT CUT WITHIN 2 WEEKS OF PLANT TURNING BROWN TO MINIMIZE SHATTERING
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Rotation Protocol anola-grain Double-crop canola-soybeans or csorghum; 1 in three or four year rotation with wheat
Expected Yields 1500 to 3500 pounds per acre Residual Herbicide ing period = Ally , Accent (if pH
rnado, and Devrinol, Lexone, Salute, rsuit = 26 months
Constraint 16-18 month waitabove 6.5), Atrazine, Beacon, Canopy, Classic, Command, Commence, Dual, Glean, Lorox Plus,
eflex, Scepter, Squadron, ToPrincep, RTri-scept; 12 month = Sencor and Turbo; Pu
Rotational Benefits an cyst nematodes; Increased s
Reduction in soybewheat yield
Storage 9% moisture for extended periods; drying temperature lative humidity < 65%; Storage
°F or lower <110°F; Retemperature = 50
Transport Duct tape holes; Tarp at Highway Speed
and cracks in combines and grain s trucks
Weed Competition Competitive once established Miscellaneous f split Inspect Stems for Sclerotina before flowering, i
apply Quadris; Crop rotation and destruction of wild mustard plants is essential to prevent Blackleg
* Canola s
Conclusion: Canola has agronomic a e AgBio region. Canola could represent a oilseed to ing facility. Investment in swathers or pushers cou in order to decrease the risk of shattering at harvest. B. Dedicated Crops High Erucic Acid Rapeseed High eruci Rrapeseed is an oilseed crop that haspotential. The crop is very similar toagronomic perspective. Generally, “indrefers to any rapeseed with a high conpercent) of cid in the oil. Indurapeseed a for non-edible pulubricants, hydraulic fluids and plastacid rapeseed (HEAR) oil is especiahigh heat stability is required. HEARproperties which include: High smokoiliness and stability at high tempera low temperatures and durability. One of the primary markets for high-erucic acid oils is erucamide. Erucamide is a
ources provided in Attachment IV
nd market potential in th value-added be processed in a multiple oilseed process
ld be an option for local producers
c acid rapeseed (HEA ), or industrial strong regional canola from an ustrial rapeseed” tent (at least 45
erucic are used
strial varieties of rposes such as ics. High-erucic-lly useful where oil has special
e and flash points, tures, ability to remain fluid at
Figure 5 Rapeseed Crop
Page 27 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final ‘slip agent’ molded p Erucamide is a large relatively complex molecule and etically from petrochemic ry expensiv duce erucamide which is used as a slip additive in polythene and n and prevent adhesion between film surfaces. HEA nts and has a range of other applications. PMC Biog of the largest producers of erucamide in the world. t for erucic acid. The majority of HEAR consumed in th n Union and Canada, although there is very small domestic p ecently. Although somewhat dated, the followin echnology magazine provides an estimate of applications
plication sed Volume of Derivative Produced
Erucamide Slip agent 15,000Erucyl Alcohol Emollient 10,000
en derivatives Hair care and textile softening 18,000 6,000henyl Alcohol P 00 6,000
used in injection lastics and polyethylene manufacture. consequently attempts to produce it synth
als would be ve e. HEAR oil is used to propolypropylene, to reduce surface frictioR oil is also used in printing inks, lubricaenix chemical refinery in Memphis is one Erucamide represents the largest markee U.S. is produced in the Europearoduction, estimated at 1,000 acres most r
g data from the August 1994 issue of Lipid Tworldwide use of high-erucic-acid oils in industrial
:
Derivative Ap Volume of Oil U
48,00030,000
(1,000 Pounds)
Various fatty nitrogBeEs
our point depressant 18,0ters and others Lubricants 6,000 5,000
Glyceryl triehenate Food Emulsifier 3,000 3,000Silver behenate Photography 750 250Total 123,750 45,250
Source Data: Economic Research Service, USDA
EAR has agronomic properties very similar to canola and is cultivated and harvested in a rrently no glyphosphate resistant (Roundup Ready) varieties of nternational (TCI) actively contracts HEAR and is contracting
In Oklahoma, the crop has been
r commodity canola prices. Rotating to 15%. TCI is also interested in
tributor of HEAR seed. TCI offers two uropean variety. HEAR must be kept
t crosspollination and rendering of any ive identity preservation protocol must nd storage. Canola cannot be planted eral years due to cross-contamination
Hsimilar manner. There are cu
EAR. Technology Crops IHacreage in Oklahoma as well as western Arkansas. successfully produced with yields as high as 3,500 poundshave received a contract premium of $1.50 per cwt oveHEAR (or canola) can increase wheat yields by 10%contracting acreage within the Agbio region and is a disvarieties of HEAR seed, one from Dekalb® as well as a Eat least 50 feet separate from stands of canola to prevenhybrid variety oil unfit for human consumption. An intensalso be in place to prevent contamination via equipment aon the same plot that HEAR has been planted on for sevconcerns.
As with canola, shattering is a significant risk for HEAR. Swathing is recommended for HEAR production when the crop is approximately 2/3rds brown. HEAR has in the past been restricted
per acre. TCI growers in Oklahoma
Page 28 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final in livestock rations due to the presence of glucosinates in the meal. However, according to TCI representatives, there are now varieties available with glucosinates content reduced sufficiently that there is no distinction between HEAR and canola meal. The presence of PMC Biogenix in Memphis could provide regionalized HEAR production a localized market with limited transportation costs entailed for oil production. The major fatty acid composition of HEAR is shown below:
HEAR Oil Fatty Acids % 16:0 palmitic 4.0018:0 stearic 1.0020:0 arachidic 0.8022:0 behenic 0.5018:1 oleic 14.020:1 eicosenoic (gadoleic) 9.0022:1 erucic 48.018:2 linoleic 13.018:3 linolenic 9.00
The production protocol for HEAR is almost identical to that of canola, with the exception that HEAR requires a stringent IP protocol. Also, as HEAR is more of a value added specialty crop, the need for swathing is increased versus canola.
Crop: HEAR (Brassica napus)
Planting Period: Late September-Oct 10 North of Memphis; Through October 30 south of Memphis
Field Preparation: Tilling Preferred
Planting Method: Grain Drill; 6 to 7 inch rows; Seed Depth -1/2 inch; Deeper than 1/2 inch decreases yields
Seed Per Acre: 6 Pounds Harvested: Late May/Early June Growing Days: 280-340 Optimal (°F) 50° to 77° Winter Minimum (°F) -4° Soil pH 5.5 to 7.6 Soil Texture/Type Medium to Light Precipitation 20 - 39 inches Soil Drainage Well
Diseases Phytothora, Sclerotina, Blackleg, Rhizoctonia, Cercospora, Anthrachose, Powdery Mildew
Insects Seedpod Weevil; Insects typically not a problem Aphids, Caterpillars, False Clinch Bug, Grasshopper,
Nitrogen (N) 60 Lbs. Per Acre Early January + 60 Lbs. Early February
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Phosphorus (P) P Levels >35 PPM = 0; 26 to 35 ppm = 50 lbs.; 16-25 ppm = 60; <16 ppm = 90 Lbs.
Potassium (K)
K Levels > 130 ppm = 0;91-130 ppm = 60 lbs.; 61-90 ppm = 90 lbs.; < 60 ppm = 140 lbs. in split applications
Sulphur (S) 20 Lbs. S Per Acre in Preplant or December/January Applications
Boron (B)
B on alkaline silt loams; 1 lb. per acre (granular B) with preplant fertilizers or foliar application of .3 lb per acre December/January
Weed Control reflan, etc.) - typically applied preplant;
im (Poast); Trifluralin (Tand sethoxyd
Potential Varietiesin Region I contract HEAR varietie
Suitable TC s
I.P. Constraints
igh Erucic Acid Rapeseed R) kept 50 feet from ola at all times; HEAR I.P. Protocol includes
cleaning of equipment and storage to avoid potential of canola
Hcan
(HEA
contamination
Harvest
speed = 400 to 600 rpm; Top sieve set at 1/4 to 3/8 inch and bottom sieve at 1/8 to 1/4 inch; DIRECT CUT WITHIN 2 WEEKS OF PLANT TURNING BROWN TO MINIMIZE SHATTERI
Swathing when 2/3rds of Plant is Brown is Ideal; Combine - Platform Head; Cutter set just below seed
ods; Cylinder speed = 450 rpm; Concaves = 3/4 inch in front and 1/8 to 1/4 inch in the rear; Air
NG
p -650
Rotation Protocol Double-crop with soybeans or with grain sorghum; 1
ion with wheat in three or four year rotatExpected Yields 1500 to 2500 pounds per acre
Residual Herbicide
lly , Accent (if pH ine, Beacon, Canopy, Classic,
o, and 2 month = Devrinol, Lexone, Salute,
rsuit = 26 months Constraint
16-18 month waiting period = Aabove 6.5), AtrazCommand, Commence, Dual, Glean, Lorox Plus, Princep, Reflex, Scepter, Squadron, TornadTri-scept; 1Sencor and Turbo; Pu
Rotational Benefits an cyst nematodes; Increased
s Reduction in soybewheat yield
Storage
9% moisture for extended periods; drying temperature lative humidity < 65%; Storage
°F or lower <110°F; Retemperature = 50
Transport Duct tape holes
; Tarp at Highway Speed and cracks in combines and grain
s trucksWeed Competition Competitive once established
Miscellaneous
, if split Inspect Stems for Sclerotina before floweringapply Quadris; Crop rotation and destruction of wild mustard plants is essential to prevent Blackleg
Page 30 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final
*HEAR so Conclusion: HEAR has excellent ma the AgBio region. HEAR could represent a va ortunity in a multiple oilseed processing plant assuming the prop exceeded. However, HEAR yields will average les la varieties. Crambe
Crambe (Crambe abyssinica) is an oilsneeds to be further explored in the AThe oilsee ntains inedible industrial products. It is increasingly Europe, wh hin the U.S. on a more or bwas introduced to the U.S.A. by theAgricultural Experiment Station in Evaluations for strains of the crop bega1958. Crambe has since been successseveral areas of the northwestern U.S, but the majority of contracted acreage has Dakota, with seed yields varying from ted yield for crambe in North Dakota would ap he seed has approximately 40% oil content. Oil yie Crambe is a spring crop that has excellent market p percentage of erucic acid However, further n order to attain varieties mo ble to the southea s of hot and cold. Attem the crop in cessful thus far. An atte cial product n western Kentucky during the early 1980’s but the resulting crop was destroyed by aphids. The major fatty acid composition of crambe is shown below:
be
urces provided in Attachment IV
rket and agronomic production potential in lue-added processing opper level of cross contamination was not s than those of Roundup Ready cano
eed crop that gBio region. oil used for d crop cocultivated in as occurred ile small-scale production
less periodic asis. Crambe Connecticut the 1940s.
n in Texas in fully grown in
been in North 300 to 2500 pounds per acre. An expecproximate 1200 pounds per acre. Tlds are estimated at 480 pounds per acre.otential in the Agbio region due to its high development needs to be conducted i(≈60%).
re suita st. The crop is highly sensitive to extreme Mississippi and Oklahoma have been unsucpts at producing
mpt at commer ion of crambe was made i
Cram % 16:0 palmitic 2.4018:0 stearic 0.4020:0 arachidi 0.50c 16:1 palmitoleic 75.018:1 oleic 18.420:1 eicosenoic (gadoleic) 2.6022:1 erucic 54.018:2 linoleic 710.18:3 linolenic 5.10
Figure 6 Crambe being direct cut
Page 31 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final The crop does not have a high tolera at flowering. Damage will occur for extended periods rs have been
ran ted from crambe
anufacture of synthetic rubb acid, a long chain fatty acid,
tential uses of Crambe oil
nce for low temperatures at planting and below 50°. It is reported that newer cultiva
ce to cooler temperatures. The oil extracdeveloped in Europe with more toleseed is used as an industrial lubricant, a corrosion inhibitor, and as an ingredient in the
er. The oil contains 50 to 60% erucicmwhich is used in the manufacture of plastic films, plasticizers, nylon, adhesives, and electrical insulation. Crambe is being promoted as a source of erucic acid, which is typically supplied by imported HEAR oil from Canada and smaller quantities from Europe. Crambe oil typically contains 8 to 9% more erucic acid than industrial rapeseed oil.
PoOil Product Uses
Triglyceride (refined oil) Pharmaceuticalsfluids, waxes, fis
, lubricants, heat transfer fluids, dielectric h food coating agent.
Erucic acid Erucamide, plasticizers, antistats, corrosion inhibitors.
Behenic acid Behenamide, antprocessing aids,
ifriction coatings, mold release agents, flow improvers, cosmetics.
Erucyl alcohol Surfactants, slip and coating agents. Behenyl alcohol Surfactants, slip and coating agents. Wax esters Lubricants, cosmetics. Fatty acids Existing markets for C18-C22 acids and their amides.
Brassylic acid Nylon, perfumes, coatings, flavors
plasticizers, synthetic lubricants, .
Pelargonic acid Perfumes, plasticflavors.
izers, synthetic lubricants, coatings,
Crambe sources provided in Attachment IV
Crambe meal can be used as a protein supplement in livestock feeds. The meal contains 25 to 35% protein when the pod is included and 46 to 58% protein when the pod is removed. It has a well balanced amino acid content and has been approved by the FDA for use in beef cattle rations for up to 4.2% of the daily intake. Crambe meal can also be utilized as a source of biomass for cogeneration or as a component of plywood. The meal has not been approved for nonruminant rations because it may contain glucosinolates, which may be broken down in digestive systems to form harmful products that can cause liver and kidney damage, and appetite depression. Untreated, oil-free crambe meal may contain up to 10% thioglucosides, which are toxic to nonruminant animals, such as hogs and chickens. However, subjecting whole seed to moist heat before pr can deactivate the enzyme, and the glucosinolates remain intact through the oil extraction process.
Potential uses of cra
ocessing
mbe meal Meal produ Uses ct
Processed m d eal An animal feeProcessed m Feedstock for biomass eration eal cogen
1-cyano-2-hydroxy- ndment for the inhibition of weeds and soil . (A green ma )
3-butene A soil amepathogens nure
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
2-(S)-1-Cyano-2-hydro Insecticide against the h fly (Musca domestica xy-3-butene ousePhenylethyl cya Insecticide against the h fly (Musca domestica) nide ouse
Crambe sources provided in Attachme
increased erucic acid content. The crop is not a Brassica and thus more useful in crop rotations for alleviating weed, pest, and disease t cro llinate with oilseed rape and is not restricted with respect to distances and IP protocol. HEAR growers cannot go back to canola, whereas this is not a p . The cro otential oilseed crops. Crambe oil is less polyu the erucic acid in c esses. Crambe is a viable option for crambe production in some ar
If acceptable varieties are developed operties for this region, crambe e a lucrative crop for farmers in the AgBio region given the regional presence of a ma
Cramb
nt IV
Crambe has been attempted at experiment stations in Mississippi, but failed to produce a crop. According to one crop researcher, the crop has difficulty with the hot temperatures incurred in the summer, as well as its sensitivity to cold. It is known that TCI is actively attempting to contract crambe. Assuming that acceptable varieties were developed in this region, crambe would be planted in late April to Early May and harvested in August to September. The pods are extraordinarily light, dictating that distance to processing location can be an issue. Crambe seed approximates 86,000 per pound. Test weights approximate 27 pounds per bushel.
There are several noted advantages over HEAR, beyond the
build-up. Crambe canno ss-po
roblem with crambe p requires significantly less inputs than other pnsaturated, allowing for easier modification of
hemical proc also a drought tolerant plant. Irrigation may beeas.
or determined with suitable pr might provrket for erucic acid (PMC).
Crop: e (Crambe abyssinica) Planting Period: After last frost; Late April to May Field Preparation: Fine and firm re uniform depth to ensuPlanting Method: Drill; 6 or 7 inch rows Seed Per Acre: 1/2 to 1 inch
Harvested: Leaves have dropped and seed pods and stems have turned light straw colored
Growing Days: 90 to 120 Optimal (°F) 59°F to 77°F; Cannot endure frost, 50°F minimum Winter Minimum (°F) 30°F Soil pH 6 to 7.5 Soil Texture/Type Coarse to fine texture; Sandy loams are optimal Precipitation 31 to 59 inches Soil Drainage Well Diseases Sclerotina Nitrogen (N) 65 lbs per acre Phosphorus (P) Unknown
Weed Control sethoxTrifluralin (Treflan, etc.) - typically applied preplant; and
ydim (Poast);
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Bird CoMeasu Generally s
ntrol res not eaten by bird
Harvest seeSwathing before
ds fullypreferred before combining, No swath ripened ; Combine with similar settings to wheat
Rotation Protocol Can follow wheat or other small grain
mbe sourc Conclusion: Due to the exce rther research needs to be conducted to determine varieties of crambe suitable for this region. The crop has not been
ricin and ricinine, which are poisonous to humans and animals.
ntial in the AgBio region, assuming removal of the ricin content in the seed. Some
also conducted significant research on castor. In 2009, the ‘Brigham’ variety of castor is planned for ra reported 4% ricin content, maki zard. Furthermcastor is be for rel This varietycontent of e thr d the hecastor proc n the new varieties of castoreduced tox ects fo castor processing will likely inregion, castor would be planted frost. Cast expected nge of 2,200 pounds peseed has approximately 50% oil content, the expected oil yield per acre wpounds.
Castor Oil has the followin major fatty acid profile:
Castor Oil Fatty Acids %
Cra es provided in Attachment IV
llent local market for crambe oil, fu
successfully produced in the region in the past. Castor
Castor (Ricinus communis) is believed to be originally native to tropical Africa. The seeds with hulls removed can contain up to 55% oil content. The seeds, leaves, and stems of the plant contain
Eating a castor seed causes nausea, and eating several may cause death. These toxic compounds are not present in the oil. Castor is grown on a very limited scale in the United States. Demand for the crop peaked in the early 1950s, when the federal government wished to increase supplies of castor oil for military applications in the event of a national emergency. Production of the crop decreased sharply after 1970. Castor represents an oilseed crop with significant agronomic pote
of the most preeminent research on castor has been performed by Dick Auld at Texas Tech University. Dr. Brian Baldwin of Mississippi State University has
ng the crop less of a biohaing developed ease in the next few years.
less than 1%. Th eat of bioterrorism has increaseessing facilities i U.S. If and when icity, the prosp r domestic
in April-May and harvested 10 - 14 daysto yield in the raor could be
g
t
Page 34 of 118
Figure 7 Castor Plan
elease. Brigham has ore, ‘Mckeon’ variety has a reported ricin sitancy of developing r are developed, with crease. In the AgBiofirst killing r acre. Since castor
ould be around 1,100
after the
Memphis Bioworks AgBio March 2009 Business Development Overview Final
16:0 p 1.00almitic 18:0 s 0.70tearic 18:1 oleic 3.5018:1 (OH) ricinoleic 89.118:2 linoleic 4.4018:3 l 0.40inolenic
In the United States, castor oil h ts, hydraulic uids, and e of efense Critical Materials lists as a strategic raw material. of soaps, linoleum, printer's k, nylon, varnishes, enamel e used
xic unless denatured at high tures. The meal is utilized in some countries for fertilizer or could represent a potential f biomass for cogeneration purposes.
d th reduced toxicity. When s and remains stable under ic and sebacic acids, have
nse. One of the largest W Chemical received a $5
how to make plastics and
storage to be exclusively on & Protein Technologies ocol. Castor could present
developed with substantially er of industrial applications pound f 2008
as been used by the military in aircraft lubricanflit
in the manufactur explosives. The Department of DIt has also been used in the synthesiss, paints, and electrical insulations. Textile scientists havin
sulphonated castor oil in the dyeing and finishing of fabrics and leather. Approximately 100 million pounds of castor oil are imported into the U.S. each year, primarily from Brazil and India. The plant is also used for fiber, an insecticide and repellent. Cellulose from the stems is used for
aking cardboard and paper products. Castor meal is tomtemperasource o
The USDA supports commercial development of castor production inhas conducted research on the development of castor strains wicastor oil is used as a lubricant it is unaffected by petroleum solventextremes of heat, cold and pressure. Its key ingredients, ricinolebeen classified as strategic materials by the Department of Defeconsumers of castor oil in the U.S. is DOW Chemical. In 2001, DOmillion grant from the U.S. Department of Energy for research onchemicals from renewable plant oils such as castor seed oil2.
Any castor processing facility would require the extractor and dedicated to castor. According to a representative of the ExtractiCenter at Texas A&M, processing castor requires a strict safety prota potential processing in processing if varieties are at some point reduced toxicity. Demand for castor oil as a raw ingredient in a numbis high. The price of castor oil currently approximated $0.80 per according to a representative of Castor Oil Inc., a producer of castor seed in Plainview, Texas.
Castor Production Protocol:
Crop: Castor (Ricinus communis)
the southwestern U.S. an
in October o
Planting Period: April - May
Planting Method:
Till; Use corn planter with air metering system; Check to see that no bean cracking or crushing occurs
2 DOW Collaborates on Castor-Oil Based Plastics and Chemicals. ICB Americas. October 29, 2001.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
" Seed Depth 1" - 3Row Spacing >30" Seed Per Acre: - 15 pounds/a 10 creHarvested: ber/Early November Late OctoGrowing Days: 140 - 210 Optimal (°F) 68°F Winter Minimum (° 28°F F) Soil pH 5 to 6.5 Soil Texture/Type Sandy/Clay Loams Precipitation 24-39" Soil Drainage Well Weed Control Rotary Hoeing followed by row cultivation Potential Varieties Suitable in Region Hale
Harvest Combine; Low cylinder speed and wide cylinder concave
Storage <6% moisture ideal Expected Yields 2200 lbs per acre
Miscellaneous High Moisture during harvest will reduce yields
Castor sources provided in Attachment IV
Conclusion: Due to toxicity and allergen concerns, as well as potentially difficult issues with
more southerly areas of the
•
• Concrete curing • Mastic cements
harvest and processing, castor is not currently recommended as a crop in the AgBio region. Exposure to the crops allergen has caused severe allergic reactions and even death in some cases. However, if reduced ricin and allergen varieties of castor are introduced, the crop could potentially be cultivated and processed in West Tennessee.
Flax
Flax or linseed (Linum usitatissimum) is a crop primarily grown in the Northern Plains and in Canada. The crop has been identified as a suitable winter crop in country. Flax was first introduced to North America by colonists, primarily to produce fiber for clothing. Today flaxseed oil is used in paints, wood finishes and linoleum. Raw linseed oil dries very slowly, compared to boiled linseed oil which is simply raw oil with chemical accelerators, called driers, added. Because boiled linseed oil has a faster drying time, people generally prefer it for most uses. The following industrial uses for linseed oil are specified by Cargill:
• Varnishes Fast drying resins
• Core oils • Caulking compounds
• Impregnate for brake lining manufacture
Page 36 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final The largest processors of flax for oil are AD Cargill at West Fargo, Nort ough flax could be tation, most of the markets for linseed oil are to the north, cons t of the crop as a winter crop in southern areas. W.M. Barr Company distributes Klean-Strip® boiled linseed oil from its Channel Av resident’s Island in M Flaxseed oil has the following major fatty acid composition.
Flax (Linseed) Oil Fatty Acids
M in Red Wing, Minnesota anda viable crop in a southern ro
training the developmenh Dakota. Alth
e location on P emphis.
16:0 palmit 5.20 ic 18:0 steari c 4.6018:1 oleic 24.3
18:2 linoleic 16.3 18:3 linolen 45.1 ic
Typical flax ould be expected to appro 1400 pounds per acre. Flax seed has about 41% oil content. Thus a yield of ould supply 410 pounds of oil. Potential seed varieties include Rahab, Culbert, Neche, Dufferin, Verne, Omega and Linton. Flaxseed m choline and higher min than soybean meal or sunflower meal. Flaxseed meal is similar to soy d feeding applications.
yields c ximate 1200 to 1000 pounds c
eal is lower in in thiabean meal in most other vitamins an
The following production protocol would apply for flax grown as a winter oilseed crop in the AgBio region:
Crop: Flax (Linum usitatissimum) Planting Period: Late October
Planting Method: r up to 1 1/2 inches deep on
sandy loams; 6 inch rows Drill; 1/1 to 1 inch deep o
Seed Per Acre: square foot 50 lbs per acre; optimum stands are 70 plants per
Harvested: 90% of seed capsules are brown--plant may still be in bloom
Growing Days: 80 to 180 Optimal (°F) 61°F to 75°F Winter Minimum (°F) 21°F Soil pH 6 to 6.5 Soil Texture/Type Silt clay loams and silty clay Precipitation 20 to 31 inches Soil Drainage Well
Diseases Pythium, Sclerotinia, Anthrachose, Rust, Helminthosporium/Biopolaris, Rhizoctonia, Aster Yellows
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Busam, Captan, Mancozeb and Maxim Fungicides
Insects armywormTypically not a problem; Grasshopper, cutworms,
s, aphids, wireworms and leaf hoppers
Insecticides Malathion, Sevin, Telone and certain Pyrethrin products Nitrogen (N) 50 to 80 lbs.
Phosphorus (P) Based on soil tests, application rate similar to wheat or oats
Weed Control bromoxynil, Poast and sodium chlorate Potential Varieties Rahab, Culbert, NecSuitable in Region Linton
he, Dufferin, Verne, Omega, and
Harvest may require installation of new
sickles before harvest Swath or direct combine,
Storage ; Monitor for grain weevils and
efore stora11%; Do not stand on flaxclean grain b ge
Transport any cracks Duct tapeWeed Competition mpetitive Not highly coRotation Protocol ree or four yea ion One in th r rotat
Flax s d in Attachment IV
ources provide Conclusion: Flax should be incorporated as a winter crop in the AgBio region only if an acceptable local market for raw linseed oil can definitively be determined. Raw linseed oil has averaged $0.84 per pound over the last year according to the Jacobsen Publishing Service.
Page 38 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final C. Niche/Developing Crops Camelina Camelina (Cam ) has been pNorthwest U.S. The crop is widely growthrives in marginal agricultural lands aThe crop is being promoted as a low agronomic input crop that could represent a viable supply of low-cThe crop has been documented as doing well in armild, wet winters. According to Duaneknowledgeable ucer, environments with less than 20” rainfall. Excessive moisture induces lodging and plant disease. agronomic requirements and very short maturation period (85 to 100 days), the crop is being considerecountry including the Southeast. It is believed e
s of theinfall. Although production data arsearchers at the Universit
e AgBio region. The crop follows a similar rotational protocol as othertated annually with wheat or double cropped with soybeans. No herbi
amelina, although it is believed that those employed on canola/rapesuited. The crop should not be produced on the same plot or with otheran a three year period. The crop may also have a potential to berbicide carryover from soybean and corn. Camelina yield data is ngion, but it is believed the crop will produce average stands between 10
cre initially.
amelina Oil has unique properties. The oil contains about 64 perceercent monosaturated, and 6 percent saturated fatty acids. Camelinaolenic acid (ALA), an omega-3 fatty acid which is essential in human anportant implications for human health. The oil also contains high levelitamin E) which confers a reasonable shelf life without the need for specamelina oil has the following fatty acid structure:
Camelina %
elina sativa rimarily cultivated in the n in Europe. Camelina s a winter grown crop.
ost biodiesel feedstock. eas with
Johnson in Montana, a camelina prod the crop thrives in
Due to its low-input
d in other areas of the
that certain varieties of camelina will comavailable more suitable for areara
country with increased e limited, it is known that
y of Georgia have produced resuccessful camelina stands. Ligeria and Calena are specified as the varieties planted. Other potential European varieties include Eporesearchers at Mississippi State have also reported yields above break-ee planted in late October through November and likely harvested in lab
throcsthhrea Cplinim(vC
Page 39 of 118
Figure 8 Camelina
il in Brassicas and may be cides are registered for eed may be generally Brassica crops in less e affected by residual ot established for this 00 to 1500 pounds per
nt polyunsaturated, 30 is very high in alpha-d animal diets and has
s of gamma-tocopherol ial storage conditions.
na and Celine. Crop ven. Camelina should
te May through Apr
Memphis Bioworks AgBio March 2009 Business Development Overview Final
16:0 palmitic 7.8018:0 stearic 3.0018:1 oleic 16.820:1 eicosenoic (gadoleic) 11.922:1 erucic 2.8018:2 linoleic 23.118:3 linolenic 31.2
The unique properties of camelina oil could lead to development markets for the oil and its components in foods, feeds, cosm(biolubricants). In certain European countries, camelina oil is uswith linseed oil, as paint oil. Camelina oil does not deteriorate linseed (flax) oil or fish oil and can be used in a number of oil baseand salad dressings. Camelina oil, unlike linseed and fish oil, is oxid Some ideas currently being researched for camelina oil use include
• Biodiesel: Camelina biodies
of a wide array of high value etics and industrial products ed as edible oil and blended
during refining or storage like d products such as spreads atively stable and palatable.
:
el has been produced and evaluated by commercial biodiesel manufacturers. The oil is considered a somewhat less favorable biodiesel feedstock due
Camelina could represent a k profile.
ester that will replace more of in cosmetic
Potential uses of Camelina oil
to its drying properties, nonetheless it is expected that significant percentage of an overall biodiesel plant feedstoc
• Biolubricant: Camelina oil can be converted to a wax expensive and less available Jojoba waxes in a rangeproducts.
• Industrial Oil: Camelina oil and its fractions can be utilized in cosmetics (nourishing and skin-care products, as a replacement for petroleum oil in pesticide sprays, and in the manufacture of linoleum (due to its high linolenic content).
• Soil and seed amendments: The gum layer that surrounds each camelina seed can be
removed and utilized as a seed coating for other seeds to improve their germination in challenging environments. Camelina gum also has the potential to be used as a soil amendment to stabilize exposed soils for erosion control as in road construction.
dustrial and
In skin care products such as body lotions, bath foams and creams. In the production of soaps and soft detergents. In the production of interesting lipopeptides and lipoaminoacids. In the production of cosmetics and paints As a replacement for marine oils due to its similar fatty acids As biodiesel feedstock As a source of natural anti oxidants (Omega 3) As an adjuvant in agrochemical sprays
Page 40 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final
nal Non-Food Crops Centre
PMC Biogenix, a prominent al manufacturer with a large-scale refinery in Memphis, has expressed a significant interest in acquiring camelina oil as industrial oil. Camelina oil has a high percentage of eicoseno 0:1), a very rare fatty acid used in industrial applications.
Extruded camelina meal can to 10 -12 percent oil ( oximately 5 percent omega-3) and 40 percent protein. The contain anti-nutritive compo glucosinates. High c ntrations of glucosinates can
estock performance and health. Certain European countries ban camelina meal from
eef cattle and swine. Sustainable Oils is a joint venture between Targeted Growth and
Ca lfuel in be exp
Ca
C
Source; Natio
oleochemic
ic acid (2
contain up appromega-3 fatty acid can enrich feed products. Camelina does
unds called oncereduce livlivestock feeds. The Montana State Department of Agriculture and U.S. Food and Drug Administration are working to determine the GRAS (Generally regarded as safe) status and AFFCO (Association of American Feed Control Officials) feed certification. Preliminary research suggests that camelina meal will be suitable and in some cases preferable in beef, dairy and possibly laying hen rations. More recently, Sustainable Oils has received approval from the Center for Veterinary Medicine, a unit within the FDA, for the use of camelina meal in livestock diets. The approval covers use of camelina for up to 2 percent of the total feed ration for feedlot bGreenEarth Fuels headquartered in Montana.
me ina and other high glucosinolate meals have the potential to be pelletized and utilized for biomass combustion. On a preliminary basis, the maximum value that this market could ected to provide for camelina meal is $80 per ton.
melina has the following recommended production protocol:
rop: Camelina (Camelina Sativa) Planting Period: Late October through November
Planting Method: Drilling may be required in AgBio region; Seed is broadcasted in Montana
Seed Per Acre: otentially higher in the
Midsouth 5 lbs. per acre in Montana; P
Harvested: April Growing Days: 85 to 100 Winter Minimum (°F) At least 12°F Precipitation Performs well in dry climates Soil Drainage Well Diseases wny Mildew; Schlerotina Is highly resistant to blackleg DoInsects Not significant Birds may be required Can be problematic; Killing or scaring
Nitrogen (Ndocumented up to 100
) 35 lbs. minimum; Yield responses lbs.
Phosphorus documented up to 60
s (P) um; Yield response
lbs. 20 lbs. minim
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Weed Cont
Not a significant problem, alletoxins inhibit weed growth; rently registered; Triflurin may be
ithin Southeast region, however. rol required wNo herbicides cur
Potential Varieties Suitable in Region
European varieties: Winter - Epona; Spring - Celine, es: Blaine Creek and
Suneson Calena; Montana State varieti
Maturation Pods are dark tan or yellow
Harvest with a 3/64 X 3/8 slotted screen
Swathing recommended when pod color is yellow; Direct cut with concaves open; Reduce wind speed; Clean seed
Rotation Protocol Rotation with winter wheat; Doublecrop with soybeans
Camelina sources provided in Attachment IV Conclusion: Continued crop research needs to be conducted to determine the viability of producing camelina as an oilseed crop in the AgBio region. A market opportunity exists to utilize camelina oil as a high value industrial oil and potential biodiesel feedstock. Research on camelina meal is ongoing to determine its suitability in livestock markets. Lesquerella Lesquerella (Lesquerella fendleri) contains oil that is high hydroxyl fatty acid. About 25% of the lesquerella seed is oil, of which about 55% is a hydroxy fatty acid. Lesquerella may be
metics. ic ld
ermi lopment of new products that would not be possi According to USDA crop researcher Davin the U.S. There are Mississippi and the Midwest. All species of Lesquerthe m nent of its oil profile. Most species occurring eastcontain densipolic acid as the predominant HFA. One species, foundand a throughout the d western U.S., the predominant HFA. These two types of HFA differ from lesquerolichydro /or by the carbon chain length. Densipolic and aumarke ls than lesquerolic acid. altern ties of lesquerella to this po
able to substitute for castor oil in numerous products including: adhesives, lubricants, plasticizers, pharmaceutical and medical products, waxes and polishes, soaps, inks, caulks and sealants, primers and appliance finishes, detergents, inks, and cosAdditionally, the longer fatty acid carbon chain of lesquerol
cid, compared to ricinoleic oil of castor (C:20 vs.C:18), couap t deve
ble with castor.
id Dierig, lesquerella is suitab Southwestern other potential varieties na
ella produce oneain compo
nother widespread Midwest an
xyl group andt potentia There has not been any late varie int.
Page 42 of 118
Figure 9 Lesquerella in early bloom
tion primarily
ast of the
of the Mississippi River, in Texas and Oklahoma, contains auricolic acid as acid by the position of the ricolic acids have different
ent of
le for productive to areas e of three types of HFA as
aboratory developm
Memphis Bioworks AgBio March 2009 Business Development Overview Final Lesquerella seed as well as lesquerella m seeds from all native plants of the Brassica family. Experiments have shown that hydrating the seed and elevating the temperature before oi ate the thiogl me. Genetic variation for this trait exists between different populations and could be manipulated through plant breed Lesquerella meal has an excellent distri in lysine. Preconditioning the seed is necessary for system so that t e ucted on a variet ck. Unlike castor, lesque xic moieties like the very lethal protein, ricin; the poisonous alkaloid, ri ere is significant interest in the lesquerella mea ums, and p tracts as well as for animal
onclusion: Lesquerella is not recommended as a crop in the AgBio region at this time due to ieties.
are over 45 species of Cuphea. The om 8 inches to 13 feet in height, and is
ring the past several years, ernm l
National Center for Agricultural Utilization Research (USDA) has
eal contains glucosinolates (3 to 7%), as do the
l is removed by crushing is one way to inactivucosidase enzy
ing.
bution of amino acids being particularly high deactivation of the thioglucosidase enzyme ed. Meal feeding studies have been condhe meal can be used for animal f
y of livesto rella does not contain tocinine; or the very potent allergen, CB-1A. Thl as a source of natural antioxidants, pigments, g
feed rotein ex
Cthe lack of suitable var
Cuphea Cuphea(Cuphea viscosissima & Cuphea lanceolata) is a genus of low-growing herbaceous or annual plants. Thereplant varies fralso cross or self pollinating, depending on the species grown. Cuphea (Lythraceae) is an annual plant that produces a small oil seed rich in saturated medium-chain triacylglycerols. Oil from cuphea seed consists mainly of medium-chain fatty acids that are used in the formation of lubricants, soaps and detergents. The first commercial crops were planted in 2004 by Technology Crops International in partnership with the USDA ARS, Proctor and Gamble and the Universities of Oregon and Western Illinois. Ducuphea has been grown, throughout the Midwest, by both govseed producer. The
Figure 10 Cuphea being combined
ent labs and a commercia
successfully planted, mechanically harvested, crushed, and refined cuphea oil, and created derivatives for cuphea. Some challenges that cuphea has, as a new crop, are an indeterminate growth and a small seed size. With indeterminate growth, the plant flowers continuously throughout the growing season, which is problematic, because the early maturing seed pods shatter and drop their seed before harvest. Successful cuphea yields approximate 600 to 700 pounds per acre. As commercial development of this crop is relatively new, more work needs to be done to determine it suitability in the AgBio region. With the increase in prices for all bio-based raw
Page 43 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final materials, cuphea may increasingly compete in various cosmetic markets. According to a representative from the USDA ARS, cuphea oil would have a value similar to that of coconut or alm kernel oil.
nd very low vels of poly-unsaturation. These characteristics make
il is useful in manufacture of gh quality waxes, lubricants, detergents, and plasticizers.
e fatty acid profile and special properties of meadowfoam oillso stimulated interest in its use in personal care products such as
00 acres of meahas been valued
utilizing a solventwfoam meal fed
ve impact on weigg a lower percen
and questionae AgBi
p Conclusion: Due to difficulties with harvest and lack of a identified local market, cuphea is not recommended as an oilseed crop in the AgBio region at this time. Meadowfoam Meadowfoam (Limnanthes alba), a low growing winter annual native to northern California and Southern Oregon, was domesticated at Oregon State University (Franz et al. 1992). The natural habitat of meadowfoam is 35° to 45° N latitude. Meadowfoam seed oil contains long-chain fatty acids (20- and 22-carbon). These fatty acids are unique due to very high levels of mono-unsaturation alemeadowfoam oil very stable, even when heated or exposed to air. Meadowfoam ohiThe uniquaMeadowfoam requires beehives for pollination. The researchers in Virginia in the past. Approximately 2,0Oregon's Willamette Valley in 2004. Meadowfoam oil in past years. After the oil is removed by crushing the seed and remaining meal may be used as a feed source. Meadoto 25 percent of the total dietary intake has no negatifor other livestock may require steam cooking or usinfeed supply due to a toxic glucosinolate fraction. Conclusion: Due to the high variance in yieldsmeadowfoam is not recommended for production in th
crop has succes
o region at
Page 44 of 118
Figure 11 Meadowfoam
and its derivatives have cosmetics and toiletries.
dowfoam were sown in as high as $7 per pound
extraction process, the to beef cattle at levels up ht gain. Use of the meal tage of meal in the total
ble regional suitability,
sfully been produced by
this time.
Memphis Bioworks AgBio March 2009 Business Development Overview Final Pennycress
lent in northern states. It is a winter annual and dies ack after producing penny-shaped seedpods in the spring. The
ith pproximately 36% oil content. Both the oil and the meal contain
lucosinolates, making them unsuitable for edible or vestock consumption. The most likely use for pennycress oil would
aturated oint than ntain the ates into
o methyl tes to greenhouse gas emissions, killing weed seeds in the soil prior
e value as a fertilizer. Pennycress cover crop ss trials
onclusion: It is recommended that pennycress production be researched at trial locations
Field pennycress, (Thlaspi arvense) is also known by the names Stinkweed and Frenchweed. The plant belongs to the mustard family and is poisonous to livestock. It can be found throughout the U.S., but it more prevabcrop has yields that approach 2000 lbs. per acre. The plant has heart-shaped, flat seed packets carrying a tiny oilseed wahigh levels of glibe as a biodiesel feedstock. Pennycress oil has is less sthan many other vegetable oils and has a lower cloud psoybean oil. The glucosinolates in pennycress meal cochemical sinigrin, which in the presence of water disintegrallyisothiocyante—a bio-fumigant.
A bio-fumigant could provide an eco-friendly alternative tbromide. Methyl bromide is a soil fumigant, which contributhat’s used in high-value crops such as strawberries. Besidesto planting high-value crops, pennycress meal will likely havleaves are low to the ground in the winter, making it a good
Figure 12 Pennycress
. Early pennycreindicate that the plant is much less shatter-prone than other oilseed varieties.
Although data are limited, there is growing interest in pennycress as an oilseed crop for production of biodiesel. The crop is believed to be suitable as winter crop in the AgBio region and would follow similar planting and production protocol to that of winter canola.
Cwithin the AgBio region.
Page 45 of 118
Memphis Bioworks AgBio March 2009 Business Development Overview Final Coriander
oriander (Coriandrum sativum) Coriander is an annual herb m the Mediterranean area. It is a close relative of
carrots. In Europe the crop has primarily been grown for the
e 3n o
ponents % of all Fatty Acids
Coriginating fro
seeds which are ground and used as a spice, particularly in Eastern Europe. The oil is also distilled from the seeds and used in condiments and liquors. More recently there has been interest in coriander as an industrial oilseed. Cultivars have been developed with increased seed yield (2t/ha) and increased seed oil content (23% versus 18% in traditional varieties).
Coriander oil contains Petroselinc acid which has potential non food applications in oleochemistry. This oleic acid-like isomer opens up another potential approach to the manufacture of medium-chain acids, since it can be split into lauric (C12:0) and adipic (C6) acids. Development of varieties with oil percentages in thbe required for successful industrial commercialization of coriander as a
Main ComPetroselinic acid C18:1 68.8 Linoleic acid C18:2 16.6 Oleic acid C18:1 7.50 Palmitic acid C16:0 3.80
Adipic acid is used for the manufacture of a wide range of polymers engineering plastics and has a global market in excess of 2.5 million me
cosmetics. Oleic acid (C18:0) is used in many industrial processes, and
ics.
Main Components % Total Essential oil
adipic acid is derived from mineral oil by a process which releases gasses believed to damage the ozone layer and contribute to global warming. Pisomer of oleic acid and is used as a plastics lubricant, in the manufactu
Petroselinic acid is an isomer of oleic acid and is used as a plastics lubricanof nylons and for cosmet
Linalool 67.7 Alpha-pinene 10.5
Gamma-terpinene 9.00 Geranylacetate 4.00
Camphor 3.00 Geraniol 1.90
Page 46 of 118
Figure 13 Coriander
0% - 40% range may ilseed.
including high grade tric tons. At present,
lons and for in the food industry.
such as N2O that are etroselinic acid is an re of ny
t, in the manufacture
Memphis Bioworks AgBio March 2009 Business Development Overview Final
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oriander is recommended as an oilseed with potential for commercial production in the AgBio gion according to USDA industrial crop researcher Terry Isbell. The crop is reportedly hardy
nd relatively easy to cultivate, with yield potential up to 3000 pounds per acre. Much of the f coriander is well proven; it likes a sunny, open position on light soils with plenty of
water. It is usually spring-sown in Europe but is hardy when young and can be fall sown as a
however, it performs best on
nsure that perennial weeds excessive dockage losses. can damage coriander.
downgrading. Leafhoppers ulk density of approximately 22-25 lb/bu.
Swath when the fruit is tan to brown in color. Since the swath is quite prone to wind damage and ining has been successful. en the fruit is very dry can
r or when the crop is tough e are large-seeded (3-5 mm)
aves may be harvested as cilantro. Seeding rate is 18-20 lb/acre for both types. It may be necessary to increase the seeding rate to of the large-seeded type. The crop should be planted 1 moist b
Conclusion: It is recommended that coriander be fuAgBio region.
C. Oilseed Ranking for AgBio Region
ced successfully in Peoria, Illinois, but the crop has yet to be produced at regional te et potential, but is sensitive to extremes of cold and heat. Due to crambe bei crambe production could be difficult to establish i utheast. No less an excellent local market exists for the erucic fatty acid present t levels up %. Pennycress and coriander are both crops that may be viable producti the AgBio region, but further research
Creaagronomy o
winter crop. Coriander production is enhanced by the presence of hCoriander can be grown successfully on a wide range of soil types; well-drained loam and sandy loam soils.
Coriander is a poor competitor, especially with perennial weeds. Eare under control before sowing. Weeds can cause yield loss andFew herbicides are registered. Grasshoppers and leafhoppersGrasshopper heads and parts in the harvested crop can result inspread aster yellows disease. Coriander has a b
oneybees during flowering.
coriander is less prone to shattering than caraway, direct combThresh when moisture is below 15 percent, however threshing whlead to excessive splitting. Swathing or threshing in damp weathewith dew may help to minimize shattering losses and splitting. Therand small-seeded (less than 3 mm) available. Typical yields range from 800-1,000 lb/acre. Yields up to 2,500 lb/acre have been reported in certain test plots, however. Le
to 30-40 lb/acre get a good stand inch deep in a firm, ed.
rther researched at trial locations in the
Based on numerous inquiries with agricultural researchers and crop research stations, FBA believes the most viable crops with respect to production potential in the Southeast are sunflower, winter canola, high erucic acid rapeseed and potentially camelina and castor. Flax can be produced in the region, but is not as competitive with weeds as other oilseeds. Camelina shows great promise as a low-input winter crop. It should also be noted that due to the extraordinarily short period to maturity for camelina (85-100 days), it may be possible to plant back to back winter and spring crops, with final harvest in June in time for a late soybean crop. Pennycress has been produ
st plots. Crambe has excellent markng a spring crop, significant
n the so nethe in crambe a to 60
for commercial on in
Memphis Bioworks AgBio March 2009 Business Development Overview Final needs to be conducted at test plots in order to determine proper production protocol for this climate.
e been omitted due to their current
Castor will grow in the region, but is not currently recommended due to concerns with toxicity, the presence of allergens and difficulties with mechanical harvest. Cuphea is considered a high maintenance crop with limited yield potential. It is not believed the cuphea could be competitive with other crops grown in the region. Lesquerella and meadowfoam are both crops with excellent potential as sources of industrial oils, but not suited for this region. The following table ranks oilseed crops based on their production potential in the AgBio region. Oilseed production potential is primarily based on research conducted by regional universities and seed companies. Soybeans and cottonseed havrepresentation as primary oilseeds for the region. The following ranking is based on oilseed crop agronomic suitability to the region and availability of local or regional markets for industrial vegetable oils.
Ranking of Potential Oilseed Crops Oilseed Ranking Fatty Acid/Oil PropertySunflower 1 Oleic Fatty Acid; Industrial and Food Oil UseWinter Canola 2 Polyunsaturated Oil; Industrial and Food Use; Biodiesel FeedstockHigh Erucic Acid Rapeseed 3 Erucic Acid Utilized in Numerous Industrial ProductsCamelina 4 Biodiesel and Oleochemical Refinery Base FeedstockFlax 5 Linolenic Acid; Oleochemical and Health Food UsePennycress 6 Biodiesel FeedstockCoriander 7 Petroselinic Acid; Use in Industrial and Cosmetic ApplicationsCrambe 8 Erucic Acid Utilized in Numerous Industrial ProductsCuphea 9 Medium Chain Fatty Acids; Lubricants, Soaps and DetergentsCastor 10 Ricinoleic Acid; Numerous Industrial UsesMeadowfoam 11 Long Chain Fatty Acids; Waxes, Lubricants, Detergents & PlasticizersLesquerella 12 Hydroxyl Fatty Acid; Potential Substitute for Castor Oil
Oil Yields per Acre
Average Yield Per Oil Yield Per
Crop Oil Content % Acre (Lbs) Acre (Lbs)Soybean 18 - 21 2400 456Flax (Linseed) 35 - 44 1300 520Canola 40 2000 800HEAR 40 1800 720Sunflower (oleic) 42 2000 840Castor 40 - 50 2200 990Cottonseed 17 1300 221Camelina 35 1500 525Crambe 35 1500 525Pennycress 36 1800 648Coriander 23 1200 276
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
n in the region:
• Jatropha
• Safflower • Stokes Aster
D. Oil Properties Degree of Saturation
There are a number of other potential oilseed crops that are not at present suitable for commercial production in the AgBio region, but could present options is acceptable varieties are developed. The following is a list of some oilseed crops that could be explored with respect to productio
• Borage • Brassica Juncea • Calendula • Echium • Euphorbia
• Jojoba • Kenaf • Lupin • Milkweed • Okra
• Vernonia Galamensis
Chemically, vegetable and animal oils and fats are triglycerides, glycerol bound to three fatty acids. Animal fat such as tallow or lard is saturated, meaning that in the fatty acid portion, all the carbon atoms are bound to two hydrogen atoms, and there are no double bonds. This allows the chains of fatty acids to be straighter and more pliable so they harden at higher temperatures (that's why lard is a solid at room temperature). As the number of double bonds increases in a
tty acid, you reduce the oils ability to solidify at lower temperatures, so they remain liquid. uch as palm and coc hly saturated and readily solidify at
higher temperatures.
Iodine value is a test used to determine how many double-bonds it has. The iodine will attach itself over a double bond to make a single bond where an iodine atom is now attached to each carbon atom in that double bond. Higher iodine numbers do not refer to the amount of iodine in the oil, but rather the amount of iodine needed to "saturate" the oil, or break all the double bonds. To some extent these Iodine values will vary with each crop and it associated growing conditions and or latitude as shown below.
Oilseed Iodine Value
fa
Vegetable oils s onut oils are also hig
Soybean 124-139
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Many vegetable oils and some animal fats are 'drying' or 'semi-drying' and it is this property which makes many oils such as linseed, camelina, tung oil and some fish oils suitable as the ase of paints and other coatings. This property also can restrict use as biodiesel feedstock.
The traditional measure of the e uble b nds available for this process is given by the 'Iodine Value' (IV) and can be t iodine to the fat or oil. The amount of iodine in grams absorbed per 100 ml of The higher the IV, the more unsaturated (the greater the number of double bonds) the oil and the higher is the potential for the oil to polymerize. Vegetable oil feedstocks can polymerize into a tough, insoluble plastic-like solid. At the high temperatures in internal combustion engines the process is accelerated. Polymerization happens when the double bonds in unsaturated oil molecules are broken by oxygen from the air or water rming peroxides (hydroperoxides), and the peroxides polymerize, bonding with carbon to create a long and stable molecule called a polymer (plastic). Another effect of oxidation is that the hydroperoxides attack elastomers, such as rubber seals. Oxidation and polymerization do not only affect the drying oils, there are also semi-drying oils, many of which are commonly used to make biodiesel, including sunflower and soy.
Converting unsaturated oils to biodiesel les Mixing biodiesel made from high-IV oils with biodiesel made from lower-IV oils also lessens the
t doesn't prevent it.
the EU, the standard for biodiesel is EN 1421. EN 1421 imposes a maximum iodine value ludes soybean oil and traditional sunflower from use as primary biodiesel
feedstocks, although they can be incorporated in certain blend percentages. The U.S. biodiesel
Flax (Linseed) 170-200 Canola 105-126 HEAR 100-115 Sunflower (oleic) 81-91 Castor 98-116 Cottonseed 100 -115 Camelina 133-153 Crambe 93 Pennycress 115
b Drying results from the double bonds (and sometimes triple bonds) in the unsaturated oil molecules being broken by atmospheric oxygen and being converted to peroxides. Cross-linking at this site can then occur and the oil irreversibly polymerizes into a plastic-like solid.
d gree of do ode ermined by adding
e IV. oil is then th
. The oil oxidizes, fo
sens the polymerizing effect but doesn't prevent it.
polymerizing effect bu
Inlimit of 120, which exc
standard, ASTM - 6751, incorporates no IV or oxidation limits. Palm oil and animal fats have iodine values less than 90 and are widely utilized during warmer months when cold-flow issues are not a factor. In general, vegetable oils with lower iodine values will have less favorable cold weather properties, although there are exceptions such as canola oil having a lower pour-point than soybean oil.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Fatty Acids Industrial oils are often valued by their fatty acid profile. The following table characterizes the common naturally occurring fatty acids by their chain lengths, common and systematic names, chemical formulas, molecular weights and selected physical properties:
Characteristics of Common Naturally Occurring Fatty Acids Saturated Fatty Acids
Number of Common Systematic Chemical Molecular
Melting Point Boiling Point
Carbon Atoms Name Name Formula Weight (° C) (° C at 760 mm)
8 Caprylic Octanoic C7H15CO 16.7 239.7 OH 144.2 10 Capric Decanoic 19CO 31.6 270.0 C9H OH 172.2 12 Lauric Dodecanoi 11H23COOH 200.3 44.2 298.9 c C 14 Myristic Tetradecan C13H27COOH 228.3 54.4 326.2 oic 16 Palmitic Hexadecan COOH 256.4 62.9 351.5 oic C15H31
18 Stearic Octadecan 35COOH 284.4 69.6 376.1 oic C17H 20 Arachidic Eicosanoic 19H39COOH 312.5 75.4 na C 22 Behenic Docosanoi C21H43COOH 340.5 80.0 na c 24 Lignoceric Tetracosan C23H47COOH 368.6 84.2 na oic 18:1 Oleic cis-9-Oct 14-16 -- a 3(CH2 = 282.44 decanoic CH ) CH7
CH2 CH–( )7COOH 18:2 Linoleic cis-9, cis-12-Octa- CH3(CH2)4CH= decadienoic CHCH2–CH= 280.43 –5 -- CH(CH2)7COOH 22:1 Erucic cis-13-Docosanoic CH (CH ) CH= 3 2 7
CH–(CH2)11COOH 338.55 33.5 -- Caprylic, capric, lauric, myristic and palmitic acids have traditionally been obtained by splitting cto supplement/replace the quantities of these oils which are currently imported. Stearic acid is derived from a number of sources, but primarily beef tallow and soybean oil. Arachidic acid is often derived from splitting fish oils. Behenic acid can be derived from rapeseed oil and fish oils. Oleic, linoleic and erucic fatty acids are in high demand and may be derived from such sources as high oleic sunflower, rapeseed, high-erucic acid rapeseed, soybean, camelina oils and tall oils. Tall oil, also called liquid rosin or tallol, is a viscous yellow-black odorous liquid obtained as a byproduct of the Kraft process of wood pulp manufacture. Tall oil has been a traditional source of oleic fatty acid for industrial use. However, manufacture of tall oil in the U.S. has been in decline in recent years, leading to an opportunity for other sources of oleic fatty acid to be further developed.
oconut and palm kernel oils. Coriander and cuphea crops are two crops that could be utilized
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
s that could be utilized for production in the AgBio region. Monsanto, Croplan Genetics and Asgrow all supply glyphosphate resistant varieties of
and cuphea. Castor seed is available from Castor Oil Inc. of Plainview,
throughout the country, cluding the Southeast. Sustainable Oils, which is owned by Targeted Growth is reportedly
constructing a $6 mil ernational in Memphis, Tennessee that will oversee camelina and lots an overview of the developers and suppliers of various types of oilseeds examined in this study. The estim ted cost of seed to study is projected at around $1.80 to $5.00 per pound.
E. Seed Supply & Development There are numerous suppliers of oilseed
winter canola. Non-genetically modified varieties deemed acceptable for this region include Wichita and Plainsman, which were developed by breeders at Kansas State University. Sunflower seed is readily available from essentially all major seed companies (Monsanto, Pioneer, etc.). Technology Crops International (TCI) also supplies seed for contracted high oleic sunflower varieties. TCI contracts high oleic sunflower production and processing for ACH Foods, which is headquartered in Memphis. TCI also supplies seed for high erucic acid rapeseed, crambeTexas. There are several firms interested in commercial development of camelina. Blue Sun Biodiesel of Golden Colorado, Targeted Growth of Seattle, Washington; Great Plains-The Camelina Company, located in Bigfork, Montana are all conducting camelina trialsin
lion research facility located at the Agricenter Int other oilseed test p . The following table provides
a producers for oilseeds examined in this
Seed Company/Dn Genetics Variety ower
to Hi-Bred In
w & Dekalb loweropscience
amelina Comted Growth
nech, USDA r Oi
logy Crops , Cuphea igh Oleic Sun wer, Camelinal Center Fo ra h
eveloper OilseedCropla Winter Canola (1 ), SunflMonsan Winter CanolaPioneer ternational SunflowerAsgro Winter Canola, Sunf rBayer C Spring CanolaThe C pany CamelinaTarge Camelina, CanolaBlue Su
xas TCamelina, CanolaCastorTe
Te, C
Inasto l In
lc.
chnoNationa
ternationar Agricultu
HEAR, Crambe , H flol Utilization Researc Pennycress
T e llowing le dic tes estimated or cano and sunfl ers, the crops c ered mo f t g ill of course vary widely.
nola and su lowers a competitive w from ed on cost of
h foonsid
tab inst viable
a crop budgets f la owor production in he AgBio region. Bud
ith other crops in theets wregionCa nf re bas
inputs and market demand for seed.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Estimated Crop Budget Comparison
2007 Values Corn $/BU
Soybeans $/BU
Wheat $/BU
Cotton $/LB
Canola$/CWT
Sunflower $/CWT
Source: UT UT UT UT NDSU NDSU Price/bu/cwt/lb $3.40 $6.52 $3.90 $0.55 $13.00 $14.50 BU BU BU LBS CWT CWTYield/bu or/cwt 120 40 55 850 20.00 13.60Gross/acre $408.00 $260.68 $214.50 $467.50 $260.00 $197.20 DIRECT COSTS
-Seed $28.50 $33.99 $ 28.80 $46.26 $18.15 $14.28-Herbicides $21.00 $9.08 $ 5.79 $34.51 $17.50 $15.50-Fungicides $0.00 $10.50 $ 9.40 $6.50 $10.00 $0.00
-Insecticides $7.00 $5.00 $ - $48.20 $7.00 $5.00-Fertilizer $77.25 $26.70 $ 29.07 $86.03 $33.61 $19.98
-Fuel & Lubrication $13.41 $7.92 $ 12.97 $37.10 $10.78 $13.54-Repairs $14.96 $10.28 $ 13.94 $40.28 $9.75 $11.35
-Miscellaneous* $1.00 $1.00 $ 0.90 $24.36 $1.00 $1.00-Operating Interest $6.48 $4.14 $ 6.77 $12.93 $4.38 $3.54
TOTAL OF DIRECT COST $169.60 $108.61 $107.63 $336.17 $112.17 $84.2 Net $/acre $238.40 $152.07 $106.87 $131.33 $147.83 $113.01
MACHINERY EXPENSES
-Machinery Depreciation $24.59 $18.24 $24.54 $49.89 $26.54 $21.42-Interest Expense $11.90 $8.58 $12.74 $28.39 $13.74 $11.46
LABOR EXPENSES -Labor $6.80 $4.30 $7.16 $16.34 $8.50 $8.50
RETURN TO LAND, MANAGEMENT & RISK $195.11 $120.95 $62.43 $36.71 $99.05 $71.63
Source Data: University of Tennessee and North Dakota State University
According to 2007 crop input production data, canola and sunflowers are competitive with wheat and cotton. F. Pilot Scale Development Facilities New Crops & Processing Technology Research The USDA researches alternative crops at its New Crops & Processing Technology Research Unit in Peoria, Illinois. The facility includes oilseed extraction and oil refining capability. Current crops being researched include coriander, lesquerella, pennycress, cuphea as well as many others. Additionally, the Food and Industrial Oil Research Unit (FIO) develops new ways to improve the quality and functionality of soybean and other vegetable oils. Any entity choosing to develop oilseed production capacity in the AgBio region may be able to utilize various oilseed research conducted at the Peoria research facility. Key research personnel include Terry Isbell and Steven Cermak.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Food Protein R&D Center, Texas A&M University The Food Protein R&D Center is located in Texas A&M University in College Station, Texas. The pilot scale laboratory focuses on adding value to diverse biological materials, including oilseeds. The center offers training and services to private sector oilseed processors in addition to basic R&D on Texas crops through the Texas Food and Fiber Commission. The Food Protein R&D Center also engages the federal research-oriented agencies through competitive grants. G. Algae
here is currently significant interest in development of algae production technology as a means
products around the world in what could be considered mall-scale production systems, producing several hundred tons of biomass annually. These ystems primarily utilize photosynthetic processes in order to cultivate Spirulina, Chlorella, unaliella and Haematococcus otal world production of algal
biomass is estimated at 10,000 Dramatic increases in the price of energy 2004 rej ted teres ae production for biofuels production. evel of el p ion ty i S. (currently around 2 billion gallons) d to a o ore ic le s of fe hat from animal fats terrestrito move algae production as a so biom th r ow it should be emphasized that current e r n g tintensive. It is not beli br oug ently e horizon that would revolutionize th uction o net the potential may exist to co-produce algal biofuels such iodies with r v oduc in conjunction with wa atm cilities There are sev co being de ent of algal technology. One potential us he e of m d p ant ano s. Algae consum be u to re t trea his p s may rt be sub e he ai w ergy, f Omaha e app m a u $2 n grant to fund researc nsworking with GreenFuel Technologies Corporation of Massachusetts to test the viability of algae productio han t in S doa a. ue also d pilot demonstration units at power plants locat isia ssac s, Ne w York.
T to supply feedstock to the biofuels industry. Interest in algae production is not new. Nearly thirty years ago the U.S. Department of Energy’s National Energy Laboratory researched algae for nearly two decades, but in 1996 the program came to a close under the general consensus that algae production technology was economically unfeasible. Algae are currently cultivated ommercially for human nutritional c
ssD genera (Benneman, 2008). T
metric tons.
since have uvena the in t in alg The d ha e
opment s rch f
biodiesr a
roductec m
capacial b
n the U.ous l ea m ono ly via rce
edstock than t and al crops. A number of ventures are attempting urce of
algaass to
oductioe comme
chnolocialization is highly s
phase. Hpecula
ever, p te y ive and risk-
eved that there are any technological eakthr hs curr on the prod of bi fuels. No heless, as b el from algal oil highe alue pr ts or
stewater tre ent fa .
eral over-arching ncepts explored in the velopme of a
C0 and couldlgae is t captur C0 fro2
media coal-fire ower pl s or eth l plant
e 2 tilized e waste s ms. T roces in pasidized with carbon cr, Nebraska re
dits in t future. G lreen P ns Rene able En Inc. oceived prh on algae-based biofuel f
liminary roval froeedstock production. Gr
the Iow Power F nd for aeen P
.3 millio will be lai
n at Green Plains’ et ol plan henan h, Iow GreenF ls has installeed in Arizona, Kansas, Lou na, Ma husett
w Mexico, and Ne
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Another commercial developer of algae production systems is Solazyme, Inc. of San Francisco,
alifornia. Solazyme is reportedly the only company which has produced significant quantities of biodiese biodiesel.
ecent testing has demonstrated that Solazyme’s biodiesel has superior cold weather
closed photobioreactor.
Cl meeting American Society for Testing and Materials D6751 standard
Rproperties to other commercially available biodiesel products. Solazyme’s system is also considered a
GreenFuels Pilot Photobioreactor Closed Systems GreenFuel Technologies and Solazyme systems are considered a “closed system” meaning that critical optimization parameters such as light, temperature, water circulation, nutrients and ross-contamination can be controlled, versus an “open system” consisting of large ponds in
quantities of algae can be produced with less capital investment, but at the same me less process control optimization. Photobioreactors have many designs, but tubular
cwhich largertireactors are the most common. Open Systems There is significant interest in development of open pond algae systems throughout the country. In Florida, Neptune Industry will use a “floating sock” algae system, based in a rock quarry to produce algae for biodiesel. The facility will also use fish waste to accelerate the algae growing process. The Neptune process utilizes a “floating sock” system to rotate algae and provide C02sunlight and nutrients to the entire system. New Zealand’s Aquaflow has reportedly developed a scalable method for producing and harvesting algae in the wild. In Virginia, researchers at Old Domininon University have successfully piloted a project to produce biodiesel feedstock by growing algae at municipal sewage treatment plants.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
lla vulgaris and Haematococcus pluvialis (for staxanthin) production.
ipment to a processor who would extract the oil from the meal.
There has been a number of open raceway ponds developed. These ponds are about 6” to 14”in depth, are typically mixed with paddlewheels, are usually lined with plastic or cement, and are between 0.5 to 1.3 acres in size. They are “high rate” ponds because their productivity is much higher (factor of ten almost) than ponds which do not mix with paddlewheels. These high rate ponds are the main system currently used for commercial algae production of Spirulina (Arthrospira platensis) Dunaliella salina, Chlorea On a more regional level, interest in open pond systems is focused around the integration of animal litter digesters to provide nutrients and energy for algal farms in addition to integration of algae production systems with catfish aquaculture. Professor Ronald Putt of the University of Auburn has developed a comprehensive feasibility study base on the open pond concept. The system would incorporate flocculation and settling, a method in which a chemical agent is introduced which causes algae particles to agglomerate and settle to the bottom of an extraction area. The settled algae, 1-3% solids, would be pumped to a belt filter press for dewatering and subsequent drying over a series of drum dryers heated by the diesel exhaust. The dried algae would then be packaged for sh
Open Raceway Paddle Wheel Mixed Ponds Comparison Closed systems, or photobioreactors, entail substantially higher capital costs are able to
aintain species integrity and a much higher degree of process control. Open pond systems raditional agronomic opportunity. Open pond systems require much lower
control over temperature, evaporation or the potential for cross-lien algae strains. It has yet to be proven that any breakthroughs have been
mrepresent more of a tcapital costs, but offer limited contamination by amade significantly reducing this figure.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
ational Algae Association and the Algal Biomass Association present trade associations formed with the last few years to promote algae research and
n.
Conclusion: It is expected that research will continue in the development of optimized algae production systems. The U.S. Department of Defense estimates that current production costs for algae as a biofuel are over $20 per gallon. However, significant funding of R&D throughout the country is underway. The Nrecommercializatio II. Markets A. Regional Processing Infrastructure
xtraction OperationsE There is currently only one* solvent extraction soybean processing plant in the AgBio region:
• Riceland Foods - Stuttgart, Arkansas
*Although located outside of the AgBio region, it should be noted that Producer’s Cooperative Operates a solvent plant in Oklahoma City that has been modified to process canola and sunflowers.
Two small mechanical soybean extraction locations are also active:
• Arkansas Soy Energy - Dewitt, Arkansas • England Dryer & Elevator
In the past, soybean processing plants were located at Memphis, Tennessee, Helena, Arkansas, Little Rock, Arkansas, and Marks, Mississippi. There are currently four cottonseed processing plants in the region:
• Southern Cotton Oil Mill (ADM) - Memphis, Tennessee • PYCO - Greenwood, Mississippi • Delta Oil Mill - Jonestown, Mississippi • Planters Cotton Oil Mill - Pine Bluff, Arkansas
A 400 ton-per-day plant designed for mechanical extraction augmented with CO2 is in development in the Missouri Bootheel:
• Suco2 - Qulin, MO Wet Milling - Cargill operates a corn wet mill which extracts and refines corn oil from corn germ. The location could be considered a potential toll processing option for corn germ from fractionated ethanol plants.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Regional Oilseed Extraction Operations
Refining Two large edible oil refineries are located in the region with the capability of refining multiple
rchased Hunt-Wesson. The ConAgra refinery has the capability of refining, eodorizing, winterizing, plasticizing and hydrogenating oils. Cargill operates an edible oil
emphis capable of refining, bleaching de-waxing and deodorizing corn oils. egetable oil refining capacity exists at each of the four cottonseed processing operations
vegetable oils. Riceland Foods operates a refinery adjacent to its soybean processing plant that is able to refine, bleach, deodorized, winterize, plasticize and hydrogenate vegetable oils. It is known that the Riceland facility has the capability of refining canola, corn, cottonseed and peanut oils in addition to soy. ConAgra operates a stand-alone edible oil refinery in Memphis it acquired when it pudrefinery in MVlocated in the region. Acidulation Facilities Runyon Industries and Valley Products are acidulation plants located in Memphis. Tocations acidulate soapstock produced from the edible oil refining process in order for use
he in
ve o .
lli st ck feed and various industrial products
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Biodiesel Plants There are currently 8 commercial-scale biodiesel plants that are active in the AgBio region. Two additional plants Delta American and Pinnacle Biofuels are under construction, while NuOil in
n this region have switched om using either soybean or cottonseed oils to various animal fats as their feedstock. Both the
pric o e increasingly become correlated with the price of crude petroleum and diesel fuel. However, more recent downward shifts in the price of egetable oils may again make them a viable feedstock if disproportionate to the accompanying
he following table and map indicates the capacity, operational status and location of biodiesel refi r edstock has adversely affected ess t gion and the country. It is essential that alternative sources of feedstock be developed in order for biodiesel production to increase as a percentage of e and Security Act of 2007 was signed in
ecember of 2007. This legislation mandates the inclusion of 1 billion gallons of biodiesel in the
AgBio Region Biodiesel Plants
Counce, Tennessee is currently idle. Most of the biodiesel plants ifr
e f biodiesel and the price of feedstock hav
vdecrease in fuel prices. Development of alternative low-input crops such as camelina and pennycress could potentially provide a supply of lower cost vegetable oil for biodiesel feedstock. T
ne ies within the AgBio region. The high price of feen ially all biodiesel plants in the re
the U.S. diesel supply. The Energy IndependencDU.S. diesel supply by 2012.
Biodiesel Plants Location Capacity (MMGPY) StatusMemphis BioFuels Memphis, TN 36 Active
truction.5 Active
Scott Petroleum 20 ActivePinnacle Biofuels Crosset, AR 10 ActiveArkansas Soy Energy Dewitt, AR 10 Under ConstructionFutureFuel Chemical Batesville, AR 24 ActiveGlobal Fuels Dexter, MO 3 ActiveGreat River Soy Coop Lilbourn, MO 5 Active
161.5Total AgBio Region Biodiesel Capacity (MMGPY)
Milagro BioFuels Memphis, TN 5 ActiveNuOil Counce, TN 1 IdleDelta American Helena, AR 40 Under ConsNorth Mississippi Biodiesel New Albany, MS 7
Greenville, MS
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
AgBio Region Biodiesel Plants
Ethanol Plants Corn oil may be extracted from the Distillers Dry Grains byproduct of conventional ethanol plants (back-end oil extraction) or from the germ stream of ethanol plants utilizing fractionation technology (front-end oil extraction). Employing back-end oil removal supplies corn oil suitable s biodiesel feedstock. Fractionating at the front end of existing ethanol plants is a strategy that
derive corn germ which has approximately 20% oil content, similar to that f soybeans. Corn oil suitable for edible uses or biodiesel feedstock may be extracted from the
mmgpy ethanol refinery in Obion, Tennessee. he opportunity exists to employ fractionation or back-end oil removal at this facility.
le Oil Markets
amay be employed to ofractionated germ stream. Ethanol Grain Processors is constructing a 100T Industrial Vegetab
Global Fuels Dexter, MO
Great River Soy Coop Lilbourn, MO
FutureFuel Chemical Co. Batesville, AR
NuOil Counce, TN
Arkansas Soy Energy Dewitt, AR
Delta Fuels 40 MMGPY Helena, AR
Milagro BioFuels Memphis, TN
Memphis BioFuels Memphis, TN
North Mississippi Biodiesel New Albany, MS
Pinnacle BioFuels Crossett, AR
Scott Petroleum (Nova BioSource) Greenville, MS
Global Fuels Dexter, MO
Great River Soy Coop Lilbourn, MO
FutureFuel Chemical Co. Batesville, AR
NuOil Counce, TN
Arkansas Soy Energy Dewitt, AR
Delta Fuels 40 MMGPY Helena, AR
Milagro BioFuels Memphis, TN
Memphis BioFuels Memphis, TN
North Mississippi Biodiesel New Albany, MS
Pinnacle BioFuels Crossett, AR
Scott Petroleum (Nova BioSource) Greenville, MS
Active
Under Construction
Idle
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ingle Cut Acids -
• Stearic
Mixed Acids - • Coconut oil acid • Hydrogenated marine oil acid • Hydrogenated soybean oil acid • Hydrogenated tallow oil acid • Soybean oil fatty acid • Tallow fatty acid
Other - • Fatty esters • Amides • Metal stearates • Fatty amines and quats
he PMC facility is believed to be the largest producer of erucamide in the U.S. and imports significant quantities of high erucic oils to meet this demand. A PMC representative indicated that the Memphis manufacturing facility utilized a wide variety of vegetable oils for various industrial products. Of particular interest are HEAR and camelina. High oleic oils such as high oleic sunflower, sunflower or canola could also be utilized by PMC in some of its products. Helena Chemical - Helena Chemical is a major manufacturer of herbicides, pesticides, insecticides and other agricultural crop inputs. The operation is a major manufacturer and distributor of adjuvants. Adjuvants are used to modify the physical characteristic(s) of a liquid spray application to improve its performance. That can include many different functions — from
PMC Biogenix - PMC Biogenix purchased Chemtura’s Memphis-based oleochemicals production facility in 2007. The facility produces fatty acids, fatty esters, glycerin approved for pharmaceutical applications, glycerol esters, amides, bisamides, stearates and triglycerides. The Memphis plant is the only producer of primary amides in North America for the plastics additives market. Chemtura’s oleochemicals business (which included the Memphis production facility) had revenues of $175 million in 2007. It is known that this location manufactures the following products: S
• Arachidic/behenic • Behenic • Capric/caprylic • Lauric • Myristic • Oleic • Palmitic
T
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Memphis Bioworks AgBio March 2009 Business Development Overview Final improving the coverage of an application to spra nd other functions. Adjuvants include su s, crop oil concentrates, water conditioners, stickers, drift reduction agents, deposition agents and others. Vegetable oils are
emical operates a
rexel Chemical - Drexel Chemical is another Memphis-based manufacturer and distributor of rop inputs to the agriculture industry. Drexel also purchases significant quantities of vegetable ils for its adjuvants. Drexel has manufacturing facilities located in Memphis and Tunica, ississippi. The Memphis manufacturing plant is responsible for the production of adjuvants, nd specialty products, and provides over 1.4 million gallons of liquid storage, 80,000 square et of warehouse space, covered truck docks and a rail spur. The Tunica, Mississippi plant
roduces water-base flowables, dry flowables, and liquids. It provides over 450,000 gallons of quid storage, 100,000 square feet of warehouse space and truck docks.
iba Specialty Chemical - Ciba Specialty Chemical operates a large chemical refinery in West emphis. The facility produces a broad range of chemicals, including specialty monomers and olymers for industrial and municipal water treatment. Products manufactured at West Memphis erve the water treatment, adhesives, polymers, coatings, energy, environmental, mining, paint, aper, petroleum, plastics and rubber industries. A recent investment has been made at West emphis to bring a new cationic monomer plant on-stream.
iba utilizes several hundred thousand gallons of natural fatty acid alcohols annually. ccording to a Ciba representative, shipments are by truck. PMC has supplied certain quantities f fatty acids in the past, but is not the exclusive supplier. Fatty acids with carbon chain lengths etween C:6 and C:18 are the most widely utilized.
® boiled linseed oil at its President Island plant oiled linseed oil is utilized as a wood finish and natural protectant that is
e company’s products include paint and finish removers, solvents,
sh, window silver polish, and lemon oil products.
y drift reduction to water conditioning ach products as nonionic surfactant
widely used in adjuvants distributed by Helena Chemical. Helena Chmanufacturing plant in West Helena, Arkansas. Its corporate headquarters are located in Collierville, Tennessee. DcoMafepli CMpspM CAob W.M Barr - W.M. Barr manufactures Klean-Stripin Memphis. Bproduced from the seed of the flax plant and processed so that it will dry faster than raw linseed oil. A W.M. Barr representative expressed a general reticence about sourcing locally produced oil. However, this potential market for linseed oil should be further explored if a multiple oilseed plant is constructed. W.M. Barr & Company, Inc. manufactures and markets home improvement and automotive refinishing products and could represent a strategic market for the development of biobased products in Memphis. Ththinners, surface preps, fuels, cleaners, adhesive removers, marine paint and varnish removers, patio cleaners, household cleaners, waterproofing sealers, wood protectors and cleaners, and paint additives, as well as paint remover wash, deck and fence wash, vinyl siding wawash, house wash, brass renewal, brass polish,
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
principle strength of the AgBio region is its logistical infrastructure. Producers have excellent a value-added processing
peration.
Ra ystems intersect in Memphis including Burlington Northern Santa Fe, Canadian National, CSX, Norfolk Southern and Union Pacific. These systems can be utilized for the shipment of oilseeds, vegetable oil, and meal and hull byproducts. The following map describes the concentration rail infrastructure in Memphis
Memphis Area Railroad Systems
It also offers isocyanates, amines, activators, industrial cleaners and degreasers, adhesives and sealants, and additives for performance coatings, finishes, wood, concrete coatings and sealers, powders, aerosols, and pre-moistened wipes. B. Logistics Atransportation and storage options that may be leveraged ino
il - Five mainline rail s
Rail is typically an economical mode of transportation for distances in excess of 200 miles. One jumbo hopper car has a capacity of approximately 100 tons. Bulk liquid capacities can vary from 21,000 s to 31,000 gallons per tank car. A 100 car unit train will transport approximately 10,000 tons of products. Rail would likely be utilized for movement of raw materials and product in and out of the AgBio region.
NS
CN
UP
UP
BNSF
BNSF
CN CN
CSX
Burlington Northern Santa Fe
Canadian National
CSX
Norfolk Southern
Union Pacific
NS
CN
UP
UP
BNSF
BNSF
CN CN
CSX
NS
CN
BNSFUP
UP
BNSF
CN CN
CSX
Burlington Northern Santa Fe
Canadian National
CSX
Norfolk Southern
Union Pacific
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
to New Orleans.
The following map provides a graphical description of the rail infrastructure within the AgBio region. BNSF and Union Pacific provide excellent access for shipments west of the Mississippi, whereas CSC has excellent infrastructure in the eastern U.S. Canadian National runs north/south from Canada
Regional Rail Map
Truck - I-55 and I-40 provide excellent truck access within the region. The presence of these interstates is an advantage for delivery of protein meal and hull byproducts to feed mills within the region. Good highway access exists from West Tennessee (Highways 64 and 51), North Mississippi (Highways 61 and 78) and Northeast Arkansas (Highway 63). Truck delivery is typically utilized for distances less than 200 miles.
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iver Terminals (Bulk Liquid) -
DM River P Memphis Dock cKellar Lake, 1245 Channel Ave roducts - Receipt and shipment of petroleum products and bulk liquid commodities including thanol and vegetable oils.
merican Commercial Liquid Terminal, Memphis Dock. ississippi River, 427 W. Illinois Avenue roducts - Receipt and shipment of bulk-liquid products including vegetable oils, chemicals, and etroleum products.
Regional Interstate & Highway Access
R A ort,MPe AMPp Cargill Corn Syrup* McKellar Lake, 2330 Buoy Street Products - Receipt and shipment of bulk liquid products including vegetable oils, cottonseed oil, sunflower oil, and soybean-soap stock.
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rain Storage - G The following table indicates the volume of on-farm grain storage exists in each of the counties within the AgBio region.
Arkansas On-Farm Storage (Bu) Mississippi On-Farm Storage
(Bu) Tennessee On-Farm Storage
(Bu) Missouri On-Farm Storage
(Bu)Arkansas 4,670,500 Benton 440,268 Cape Girardeau 4,393,700AsBrChClClClCrCr
CrDDrGreIJaJeLawLeeLi
MiMPh
PoPrRaSa
ShWhW
To
462,360 Benton hley 1,266,700 Bolivar 11,443,523 Carroll 2,630,600 Dunklin 1,787,502adley No Data Calhoun 755,300 Chester 460,275 Mississippi 6,994,165ichot 2,919,500 Coahoma 2,726,000 Crockett 145,950 New Madrid 7,942,900
ay 7,876,067 Desoto 654,600 Decatur 435,745 Pemiscot 3,356,100eburne 22,050 Grenada 394,720 Dyer 867,100 Scott 6,874,474eveland No Data Humphreys 1,557,600 Fayette 638,455 Stoddard 14,729,300aighead 6,743,254 Issaquena 1,482,000 Gibson 2,477,778ittenden 3,901,500 Lafayette 56,700 Hardeman 478,200 Total 46,078,141
oss 9,332,958 Lee 482,300 Hardin 799,044esha 2,165,500 Leflore 3,433,603 Haywood 763,200ew 737,220 Marshall 293,320 Henderson 1,456,716
ene 6,088,186 Panola 1,054,560 Henry 4,627,356ndependence 595,600 Pontotoc 173,300 Lake 675,500
ckson 5,022,908 Quitman 1,740,400 Lauderdale 1,398,350fferson 3,468,056 Sharkey 2,034,000 Madison 924,650
rence 9,658,143 Sunflower 5,220,716 McNairy 1,566,850 2,032,700 Tallahatchie 2,898,500 Obion 2,993,150
ncoln 2,746,900 Tate 463,800 Shelby 156,600Lonoke 6,130,167 Tippah 341,078 Tipton 486,700
ssissippi 4,839,510 Tunica 3,696,800 Weakley 4,077,440onroe 3,196,975 Union 504,501illips 1,900,000 Warren 70,000 Total 28,499,927
insett 9,616,670 Washington 5,864,208airie 1,462,250 Yalobusha 126,600ndolph 2,892,350int Francis 3,640,500 Total 47,930,489
arp 2,200ite 1,353,950
oodruff 4,510,008
tal 108,792,322
Source: USDA
The majority of oilseeds examined in this study could be handled utilizing existing cereal grain storage.
Feed Mill Markets Feed mills represent markets for protein meal and hull byproducts. The following map indicates the concentration of feed mills within the U.S. The Midwest has by far the largest concentration. The AgBio region has a relatively light dispersion of mills, particularly in eastern Arkansas. Nonetheless, the region is surrounded by nse poultry production areas in northeast Arkansas/southwest Missouri, southern Mississippi and the states of Alabama and Georgia which are two of the largest poultry producing states in the Union.
de
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oultryoybean meal is railed to the Southeast in very large volumes to supply demand. A significant dvantage of locating a project in the Southeastern U.S. is reduced logistical costs (translating
nt to poultry producers. The following USDA maps indicate e predominance of poultry production in the U.S.
P production represents the most prominent use of protein meal in the Southeastern U.S. Sainto a higher meal basis for shipmeth
AgBio RegionAgBio Region
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an Board keeps up with estimates of estimated soybean meal consumption by tate based on USDA statistics provided on livestock production. The soybean meal market can
be based on protein content, amino acid content and energy profile. he following data including meal demand and number of livestock operations by state are
sourced from the United Soybean Board’s www.animalag.org
The United Soybesbe used as an estimate for overall demand for protein meal. Inclusion of canola, sunflower or other oilseed meal wouldT
website.
State Meal Usage (Tons) Beef Operations Dairy Operations Swine Operations Poultry OperationsArkansas 2,448,000 26,000 280 750 4,737Missouri 772,000 54,000 2,600 2,000 1,362Mississippi 1,396,000 18,700 330 1,000 2,420Tennessee 385,000 42,000 1,100 1,100 1,320 Total 4 State Region 5,001,000 140,700 4,310 4,850 9,839 Cogeneration Markets TVA operates two coal-fired power plants in the AgBio region. Coal-fired power plants may increasingly utilize biomass in order to reduce emissions and meet Renewable Energy Portfolio requirements. TVA’s Johnsonville, Tennessee plant utilizes 10 coal-fired units to produce about 550 million kilowatt-hours of electricity per year. TVA’s Allen Plant is located on President’s Island in Memphis. The plant utilizes three coal-fired units in order to produce about 4.9 billion kilowatt-hours of electricity per year. A 1,330 megawatt coal fired power plant is currently under construction in Osceola, Arkansas. This location is expected to be completed in 2010 and could present an additional market opportunity for use of oilseed meals unsuitable for livestock consumption as a source of biomass feedstock. This could particularly be the case for camelina, pennycress and other protein meals which are not approved for widespread use in livestock feed. C. Industrial Oils Natural Fats and Oils Industrial Marke
ty ester consumption is as biodiesel, although a small percentage are utilized for other
plications.
t
The following is a breakdown of industrial consumption of fats and oils in the U.S. The majoriof methylap
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2007 U.S. Industrial Consumption of Fats and Oils5%
74%
2%
4%5%
10%
Lubricants
Methyl Esters
Paint and varnish
Resins and plastics
Soap
Other InedibleProducts
Source: U.S. Census Bureau
The following table represents the overall consumption of fats and oils in both edible and non-dible (industrial) applications. Edible fats and oil consumption predominates. e
2007 U.S. Total Consumption of Fats & Oils
20%
1%
11%
0%
1%
3%
44%
1%
8%
9%
1%
1%
Baking or Frying FatsMargarineSalad or Cooking OilOther Edible ProductsFatty AcidsFeedLubricantsMethyl EstersPaint and varnishResins and plasticsSoapOther Inedible Products
Source: U.S. Census Bureau
Memphis Bioworks AgBio March 2009 Business Development Overview Final
ters 3,747.3 1,805.6nd varnish 85.7 103.2 104.2
33,089.9 30,589.2 29,345.0
2007 2006 2005Consumption in edible products 1/................................ 22,320.5 21,896.5 22,471.5Baking or Frying Fats 6,520.5 7,576.7 8,918.2Margarine 956.2 1,033.4 896.3Salad or Cooking Oil 14,347.5 12,644.8
Fats and Oils Consumption (Millions of Pounds)
12,177.0Other Edible Products 496.3 641.6 480.0
Consumption in inedible products 1/................................ 10,769.4 8,692.7 6,873.5Fatty Acids 2,696.3 2,527.1 2,270.8Feed 3,062.5 3,034.4 3,222.6Lubricants 275.3 389.5 364.4Methyl EsPaint aResins and plastics 179.3 164.3 156.7Soap 238.0 243.2 257.0Other Inedible Products 485.0 425.3 497.7
Total Edible and Inedible
he natural based chemical market is estimated in excess of 1.2 million metric tons, and is
old and Industrial Cleaners (excluding toilet soap) 124s and Adhesives (including paints and inks) 91
9150
Foods 47
Mining 28 Animal Feed 18 Textiles (including textile fabric softeners) 15 Asphalt 15 Buffing Compounds 11 Agricultural Adjuncts 11 Exported Derivatives 43 Other and Unassigned 41
Total Fatty Acids Market 1,283
Source: U.S. Census Bureau Tbroken down as following:
North American Consumption of Fatty Acids by Market 2008
Personal Care Products (including toilet soap) 315 Industrial Lubricants, Corrosion Inhibitors and Oilfield Chemicals
(Thousands of Metric Tons)
143 Plastics (excluding emulsion polymerization) 132 Househ Coating Household Fabric Softeners Emulsion Polymerization
Rubber (excluding emulsion polymerization) 42 Paper 36 Crayons, Candles and Waxes 30
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Sources: SRI, FBA
Primary Oleochemical Refiners Producer Location Products ADM Decatur, IL
(Headquarters) Linseed and Soy-based inks, Coatings, Adhesives, Wax, Personal Care Products
Akzo Nobel Morris, IL Single Cut Fatty Acids, Mixed Acids, Fatty Amines Quaternary Ammonium Compounds, Amides, Ethoxylated Amines and Diamines
Arkema Bloomington Prairie, MN
Epoxidized Soybean and Linseed Oils, Use of Various Olefinic Oils
Cargill Minneapolis, MN ts, Polyols, Esters, Fatty Acids,
Wax Base Oils, Lubrican
Cognis (PTT Cincinnati, OH Single Cut Fatty Acids, Mixed Acids, PChemical International)
elargonic and Azelaic Acids, Dimer and Trimer Acids, Fatty Acid Ester Derivatives
Corsicana Technologies
Corsicana, Texas Primary Amines, Diamines & Polyamines, Ether Amines, Oxylkylated Amines, Quarternary Ammonium Compounds, Amine Salts, Imadozalines & Amido Amines
DOW Halterman Freeport, Texas Various Natural Fatty Acid Products Degussa (Evonik)
Mapleton, IL Single Cut Fatty Acids, Mixed Acids, Fatty Nitrogen Compounds
Harcross Chemicals Inc.
Kansas City, Kansas
Surfactants and Emulsifiers, Anti-foams, Alkanolamides, Calcium & Amine Sulfonates, Ether Sulfates, Phosphate Esters ,Specialized Foamers
Lambent Technologies
Gurnee, IL Amides, Fatty Esters, Glycerol Esters, Methyl Esters PEG Esters, Phosphate Esters, Polyglycerol Esters Propoxylated Esters, Sorbitan Esters, Canola Oil High Oleic Canola Oil, HEAR Oil, Medium Blown HEAR Oil
Peter Cremer Cincinnati, OH Stearic and Oleic Acid, Glycerine, Whole Cut Split Distilled Fatty Acids, Kosher Stearic and Palmitic Acid, Fractionated and Hydrogenated Fatty Acids, Fatty Alcohol, Methyl Esters (Light, Medium, Heavy), Light
eolease Mandrel Lubricants, Cut Fatty Acids, RhNexsol Biodiesel
PMC Biogenix Memphis, TN Single Cut Acids, Mixed Acids, Fatty Acids, Amides,
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Metal Stearates, Fatty Amines and Quats Stepan Joliet, IL Alkoxylates, Alpha Sulfo Methyl esters, Amides,
Amine Oxides, Esters, Sulfonates, Sulfates, Blends, Phosphate Esters, Quaternaries, Phthalic Anhydride, Polyols, Urethane Systems, Biodiesel
Twin Rivers Technology
Quincy, MA Single Cut Acids, Esters, Biodiesel
VVF Kansas City, MO Soap bars, shampoos, liquid soaps, light duty liquids and other homecare and personal care products.
D. Biomass Based Diesel The U.S. biodiesel industry, which began on a commercial scale in the mid to late 1990’s, has grown at a rate averaging more than 100% per year for the past five years. This growth rate is illustrated in the following graph:
Biodiesel Production 1999-2007(in Million Gallons)
600700800
0100200300400500
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Biodiesel Industry Growth
Slower, but still significant growth within the industry is projected due to high feedstock prices and the limited quantities of soybean oil and palm oil globally. These two feedstocks have been used for the overwhelming majority of biodiesel produced in the U.S and abroad. In the short-term, biodiesel production in the U.S. will require increased legislative support and a more lucrative European Union diesel market for U.S. biodiesel exports. Some in the industry believe that up to 60% of the biodiesel produced in the U.S. is exported to the EU currently. As mentioned earlier, the new RFS guarantees a domestic “biomass based” diesel market of 500 million gallons in 2009 expanding to 1 billion gallons by 2012. The downside to this mandated domestic usage requirement is that it could potentially stimulate the importation of biodiesel from
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Memphis Bioworks AgBio March 2009 Business Development Overview Final countries like Brazil and Argentina. Arg exported 71 million gallons to the U.S. in 2007, although it is not known what percentage of the amount was consumed domestically
n Union. The practice of importing biodiesel to receive the $1 redit and re-exporting it is a practice known as “touch and go” or “splash and dash.” Efforts to
ctice in ve thus fa wever, the European Union has introduced tion that wou ized biodiesel imports. It is not known at this time whether or
not this legislation w to law In the long-term, there will be have to be agricultural developments to bring about more
biodie tion for the ing chart indicates FBA’s 10 year best-case ction in the U.S:
entina reportedly
versus re-exporting to the Europeacend the pra the U.S. ha r failed. Holegisla ld tax subsid
ill be enacted in .
feedstock for sel produc industry to expand at a significant rate. The followand worst-case predictions for biodiesel produ
Projected U.S. Biodiese in Millions of Gallons)
0200
00
160018002000
00 201 2017
l Production (
400600800
1000121400
2 8 2009 2010 1 2012 2013 2014 2015 2016
Unfavorable Conditions Favorable Condtions © FBA Consulting 2008
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Unfavorable Conduced Sub
ditions: Re sidies
Low Crude Oil Prices Constrained Feedstock Supply
Biodiesel Imported to Fulfill RFS ock
697 697
009010
2011 57515% 1300 16%17% 1390 7%
9% 1725 6%Average 8% 11%
Percentage Percentage Gain
Favorable Conditions:
Continued/IncreasedSubsidies High Crude Oil Prices
Increased Sources of Feedst
Million Gallons Million GallonsGain200822
450520
-35% 850 22%16% 975 15%11% 1125 15%
2012 6602013 7702014 890 16% 1475 6%2015 980 10% 1550 5%2016 1100 12% 1625 5%2017 1200
Biodiesel production growth under unfavorable conditions is estimated lower than the minimum federal mandated usage requirements due to the potential of imported biodiesel or renewable diesel fulfilling a significant percentage of the blend requirements. Renewable Diesel The Internal Revenue Service allows the same $1 federal biodiesel blenders credit for “renewable diesel.” Renewable diesel is produced by a process known as thermal depolymerization in which biomass (primarily fats & oils) is converted to fuel through hydrotreating the feedstock rather than using a catalyst as in transesterification to methyl esters. Production of renewable diesel requires construction of very large (90 million gallon-per-year+) plants. The recently passed Emergency Economic Stabilization Act (H.R. 1424) included a provision excluding co-processed renewable diesel from receiving the full $1 tax credit.
s the industry is already at 450 million gallons of production, it will be critical to develop Aalternate sources of feedstock to reach more significant levels of production in coming years. FBA believes that advances in agriculture and cultivation of crops with higher oil content will ultimately meet demand from increased biodiesel production.
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ns. In addition, CO2 Mechanical Extraction and
g operation, larger processing capacities afford greater economies of scale, translating to reduced fixed costs per ton of production.
Larger solvent extraction operations leave 1% or less of the oil in the protein meal feed product, whereas mechanical extraction operations will leave anywhere from 7% to 12% residual oil in the meal. If mechanical extraction is augmented with the injection of liquid C02 into the press cage, the resulting protein meal has 5% or less residual oil. CLH extraction reportedly leaves around 1% residual oil in the meal, but is currently only available in batch processing modules versus standard continuous operations. Cold pressing is the least efficient extraction method and involves sending unprepared and unheated seed directly into a screw press. This method leaves 25% to 30% of the oil in the meal. Vegetable oil typically has a market value 3.5 times the value of protein meal. Therefore, operations that can more efficiently remove the oil have had a higher rate of success historically. The removal of hulls before processing (where applicable) is essential for good recovery yields, as additional fiber has a tendency to soak oil making extraction more difficult. Dehulling is utilized for soybeans, sunflowers, cottonseed and crambe. The installation of dehulling quipment represents significant added capital to a processing operation, and the process aries significantly between oilseeds.
1. Mechanical Mechanical pressing is generally used for oilseeds or materials containing 20% or more oil content. Mechanical extraction consists of the use of continuous screw presses, or expellers for the expulsion of oil from seeds. Sufficient pressure is achieved by means of an auger that turns inside a barrel. The barrel is closed, except for small openings through which the oil drains and a chocked outlet for the departing pressed cake. Expellers exert a high degree of pressure relative to smaller scale hydraulic batch presses used in more rural areas. Expellers may vary in size from units that process 40 lbs. (.5 tons) of conditioned seed per hour, to machines that process over 200 tons of seed per hour.
III. Strategy for West Tennessee Crusher A. Oilseed Processing Technologies There are relatively few commercially viable process technologies used to extract high oil content oilseeds. Cold Pressing, Mechanical and Solvent Extraction technologies are utilized in the majority of commercial-scale operatioContinuous Liquid Hydrocarbon Extraction (CLH) are options that present more environmentally safe alternatives to traditional hexane (solvent) extraction, with reasonably comparable rates of recovery. Processing capacities can vary from as small as 5 tons per day for specialty applications to 5500 tons per day for commodity-scale processing operations. As with any processinin
ev
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Continuous mechanical extraction is often employed in oilseed extraction plants that employ a prepress step prior to the solvent extraction process. These plants typically have a higher plant capacity than operations that utilize mechanical extraction alone. Oil produced is crude grade quality.
Continuous Screw Press
Source: Dan O’ Brien Associates
Canola/rapeseed represents the “base case” processing feedstock for high-oil content extraction. Canola is flaked to produce material that contains 4% moisture and 44% oil. The flakes are fed to a series of screw presses or expellers. On a continuous basis, each screw press gradually increases the pressure on the incoming material as it progresses through the
terior of a closed barrel. There are openings for the oil to drain through small gaps between
ontinuous expellers or screw presses are used for numerous different oilseeds. Canola and unflower solvent extraction operations typically utilize continuous screw presses in a repressing step in order to make solvent extraction more economical when high oil content eeds are processed (30% or higher). This is accurate, despite higher power requirements and echanical maintenance costs required due to the prepress operation.
incarefully positioned hardened steel bars in the barrel cage. A column or plug of compressed meal is formed be a choke device at the discharge end of the barrel. This acts as a continuous hydraulic presshead, with “new cake” being formed at the choke as the “old cake” is continuously discharged from the expeller past the choke device. Cspsm
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leave a residual oil content of 7% to 12% in e meal. The full-fat meal (≈8% oil content) in some cases carries a premium to solvent
premium typically will not exceed $5 per ton on
om the extracted products.
ced from the HIPLEX process can be considered all- atural and is suitable for sale in organic and specialty food market applications.
Current mechanical extraction methods will typically thextracted meals, based on energy content. Thisny protracted basis. a
Anderson International, Rosedowns (owned by Desmet Ballestra) and Insta-Pro are leading manufacturers of mechanical extraction technology. 2. CO2 Mechanical A continuous screw press may be modified to inject carbon dioxide which is heated and compressed to conditions over its critical temperature and pressure to alter its properties. Use of “supercritical” carbon dioxide makes for a suitable solvent because it is nontoxic,
onexplosive, inexpensive, readily available and easily removed frn Crown Iron Works offers the HIPLEX® system which is a continuous mechanical screw press which injects liquid CO2 into the press cage. The HIPLEX® system is manufactured by Harburg-Freudenberger. Use of liquefied CO2 allows for a natural and/or organic protein meal with lower residual oil (<5%) than that of mechanical pressing alone.
Harburg-Freudenberger C02 Mechanical Extraction Press
CO2 extraction is more expensive than nonmodified mechanical extraction. CO2 extraction will require a prepressing step in order to accommodate high-oil-content seeds, similar to the prepress solvent extraction process described in the following section. There is an on-site pilot plant facility for continuous HIPLEX® process development available at Crown facilities in Minneapolis, Minnesota, USA. Oil produn
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inuous Liquid Hydrocarbon Extraction Continuous Liquid Hydrocarbon E d of extraction that is still in the re-commercial phase of development. CLHE utilizes generally regarded as safe (GRAS)
solvents such as Butane or Isobutane at high pressures to extract oil. Extraction efficiencies of up to 99% have been attained utilizing this method in pilot scale applications. The technology is offered through DynaSep. CLHE is currently only available in 10 to 20 ton per day batch production modules. Data are limited about the specifics of the process, but it is known that the high pressures required in processing have not been conducive to continuous processing.
For CO2 extraction to be economical, access to an inexpensive supply of the liquefied CO2 isrequired. The breakeven for CO2 extraction is a delivered cost of approximately $50 per ton. 3. Cont
xtraction (CLHE) is a methop
DynaSep CLHE Extractor Diagram 4. Solvent Extraction The most effective method for high-oil-content oilseed extraction is solvent extraction. High-oil-ontent seeds (>30%) are mechanically crushed and then solvent extracted in order to obtain c
the highest quantity of oil from the meal. The process usually includes seed cleaning, seed pre-conditioning and flaking, seed cooking, pressing the flake to mechanically remove a portion of the oil, solvent extraction of the press-cake to remove the remainder of the oil, and desolventizing and toasting of the meal. Meal quality is influenced by several variables during the process, especially temperature.
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he oil is pumped to distillation for removal of the hexane. The hexane is then recycled back to
s are heated with direct steam contact to pproximately 220 degrees F for toasting and further removal and recovery of hexane. The
, cooled and transferred to meal sizing. After drying to 8 to 10% moisture nd cooling, the meal is often granulated to a uniform consistency and then is either pelleted or
he primary manufacturers of solvent extractors in the U.S are Crown Iron Works, Desmet-allestra and Lurgi. The capital cost for solvent extraction plants currently approximates 40,000 per ton of installed processing capacity.
typical solvent extraction plant has a capacity of between 2,000 – 3,000 tons per day (27-30 illion bushels/annually). A solvent processing operation needs to be sized at least 800 tons er day to be commercially viable. In addition to the significant tonnage requirements, solvents sed for extraction are extremely flammable. Therefore, the equipment that extracts the oil and moves the solvent must be airtight and leak proof, and all motors and electrical switches,
ghts, etc. must be specially designed as vapor-explosion-proof (Class I-D). No matches,
Solvent Extraction consists of multiple stages of washing the oil-laden flakes with a petroleum solvent, hexane. With each step more oil is removed from the flakes and the hexane/oil mixture (miscella) becomes more concentrated with oil. Tthe extraction process for further use. The “wet” flakes are conveyed to the next vessel called a DTDC for hexane removal. In the DTDC the flakeaflakes are then driedasent directly as a mash to storage. Crown Ironworks continuous loop-bed extractors are the most frequently utilized in the U.S. A diagram of a Crown Model III Extractor follows.
Crown Iron Works Model III Extractor
TB$ Ampurelismoking, cutting torches, welder’s grinders, or other heat-producing or spark producing devices can be permitted where hexane is used. Hexane is classified as a hazardous air pollutant (HAP) by the Environmental Protection Agency. It is included on the list of 189 toxic chemicals. The most modern solvent extraction operations will have a maximum guaranteed loss of hexane of 0.15%. A moderate sized 100,000 bushel per day facility will lose 6,000 pounds of hexane to the atmosphere. Solvent extraction requires the obtaining of a Title V Air Operating permit,
hich can be difficult to obtain in certain locations. w
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BA recommends that CO extraction technology be further researched for a multiple oilseed ops such as canola and sunflowers, the oil
presents a much higher percentage of the crush margin than in soybean and cottonseed due
be procured in the Agbio region for the foreseeable future.
rgins presented by the three ifferent processing technology options using historical canola seed, meal and oil prices.
B. Processing Technology Determination F 2 crusher to be located in West Tennessee. In crreto the higher percentage of oil in the seed and premium these oils carry over soybean oil. In addition, oils such as HEAR and High-oleic sunflower carry substantial premiums in the marketplace. For this reason, oils produced from these oilseeds require maximum extraction efficiency. Solvent extraction is highly capital intensive and requires annual seed tonnage in excess of what could likely Use of CO2 technology is more expensive than conventional mechanical pressing, but the residual oil content in the meal is more acceptable (4% or less versus 8% for mechanical). The following table demonstrates the difference in gross mad Margin ComparisonExample: Canola Oilseed
Oilseed Canola Canola CanolaSeed Oil Content (%) 40 40 40Shrink (%) 3.75 3.75 3.75RBD Oil Price ($/lb) $ 0.38 $ 0.38 $ 0.38Meal Price ($/ton) $ 121.39 $ 121.39 $ 121.39Base Seed Cost ($/lb) $ 0.125 $ 0.125 $ 0.125Residual Oil (%) 8 4 1
ResultsSeed Cost ($/Ton Crushed) $ 250.00 $ 250.00 $ 250.00Oil Revenue ($/Ton Crushed) $ 232.56 $ 256.50 $ 270.86Meal Revenue ($/Ton Crushed) $ 79.69 $ 75.87 $ 73.58
Total Revenue Per Ton $ 312.25 $ 332.37 $ 344.44
ross Margin ($/Ton Crushed) $ 62.25G $ 82.37 $ 94.44
Prepress SolventMechanical Extraction C02 Mechanical
2 ocessing capacity will be assessed in the
O mechanical extraction at 200 tons-per-day prCcapital and operating cost section of this report. A refinery capable of producing refined and bleached vegetable oil will be required to produce oil suitable for most industrial oil applications. The operation should have the capability of selling to both industrial and edible oil markets. The presence of refineries in Memphis (ConAgra) and Stuttgart (Riceland) could represent potential outlets for edible use. Representatives of ConAgra have in the past expressed a willingness to purchase canola oil if it were available locally.
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ontracted duction. The cost of transporting seed to Oklahoma would be the primary hindrance to this
strategy. Nonetheless, this option could represent an intermediate option until sufficient oilseed acreage were developed in the Agbio region to develop a local oilseed crushing operation. 2) Retrofitting existing regional oilseed processing capacity to accommodate alternative oilseed crops. There are no oilseed processing operations in West Tennessee currently. FBA spoke with representatives of the following operations with respect to modifying existing processing capacity to include canola and sunflowers. Arkansas SoyEnergy - Arkansas SoyEnergy operates a 400 ton-per-day mechanical soybean processing operation in Dewitt, Arkansas. The crushing operation was designed to supply oil to its 10 million gallon biodiesel refinery. An Arkansas SoyEnergy representative indicated that the peration would be willing to e ying its plant to process other
s crushed soybeans, rice bran, corn germ and
A significant degree of interest from regional producers would be required to justify construction of even a small-scale extraction operation. Measures to increase production of alternative oilseeds in the region include: 1) Establishing delivery/storage points for Canola/HEAR in the region for shipment to extraction operations in other regions. As Producers Midsouth is the wholly-owned subsidiary of Producers Cooperative Oil Mill (PCOM) in Oklahoma City, the potential exists for canola or HEAR to be received at either its Covington, Tennessee or Osceola, Arkansas cottonseed storage locations if appropriate modifications are made to those facilities. Representative of PCOM/Producer’s Mid South have indicated a potential interest in partnering with regional producers to accomplish this objective. In this event, PCOM could potentially take ownership of seed at delivery to the storage facilities while offering Act of God coverage on cpro
oo
xamine the potential for modifilseeds.
England Dryer & Elevator - England Dryer & Elevator operates a 75 ton per day mechanical crusher in England, Arkansas. The operation hacottonseed in the past. A company representative indicated that the operation is open to examining the requirements for processing canola or sunflowers. Oil is considered crude grade. Suco2, LLC - A 400 TPD CO2 mechanical extraction operation is in development in Qulin, Missouri. This operation will initially process soybeans. Suco2 representatives have indicated a willingness to potentially process other oilseed crops once the plant is operational. The operation will not initially include a refinery. NuOil - NuOil is a 1.5 million gallon biodiesel plant in Counce, Tennessee that is currently idle. NuOil acquired used extruder and three expeller presses for construction of a crush plant through a state grant. The extraction equipment is currently in storage. If additional investment were put in place the equipment might be configured to process multiple oilseeds either in Counce or other potential processing location.
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- The four cottonseed processing plants cated in the AgBio region could potentially be modified to extract alternative oilseeds. This
R oil) and eal markets are established in close proximity, a potential opportunity might exist.
ies
% to 5%.
Capacity 50 TPD New 50 TPD Used 100 TPD New 100 TPD Used
In addition, solvent Cottonseed Processing Plants looption could be pursued if cotton acreage continues to decline. FBA spoke with the representative of one cottonseed crusher who indicated a willingness to examine processing canola or sunflowers, but has a higher degree of interest in soybeans. 3) Construction of a 50 - 100 TPD extruder/expeller operation could represent a potential strategy if immediate nearby markets are determined for oil and meals. The economics associated with this range processing capacity are generally not favorable in the long term. However, if significant premiums could be obtained for the oil (as is the case with HEAm The following capital cost estimates are provided for 50 and 100 TPD processing capacitutilizing new and used equipment. A quote from Insta-Pro was utilized as the baseline assumption using new equipment. Extraction efficiency could be expected to vary from 758
Equipment $550,000 $275,000 $1,100,000 $550,000 Total Installed Cost $1,650,000 $1,100,000 $3,300,000 $2,750,000 4) Installation of a bench-scale expeller press and testing laboratory at a suitable location could provide the means to examine regionally produced oilseeds for fatty acid profile, free fatty acid content, phosphorus levels, etc. This step would provide an understanding of the potential value of fatty acids inherent in oils such as HEAR, High-oleic sunflower, crambe, lesquerella, etc. The amino acid profile of various protein meals might also be analyzed. A preliminary estimate would put installation of a laboratory for this purpose at between $10,000 and $20,000. Potential locations identified for this facility include the University of Memphis, Hardy Bottling Company and Agricenter International. The NCP oilseed processing pilot plant in Peoria, Illinois could serve as a prototype design for a local testing lab. This pilot plant is operated by the USDA Agricultural Research Service. This pilot plant has been particularly useful in establishing processing parameters for new ilseed crops like lesquerella, cuphea, pennycress, coriander, and milkweed according to USDA o
reports. A description of this facility follows: NCP Oilseed Processing Pilot Plant Description The pilot plant has screeners, an aspirator and a gravity table for seed cleaning and density-grading. It also has various milling equipment for dehulling, cracking, flaking, and grinding seeds. Seed cooking and drying before pressing may be accomplished by using a steam-eated three-deck seed cooker/conditioner or h
heavy-duty laboratory screw press. A 100 gallan extruder. Oil extraction is performed by using a
on per batch oil refiner is equipped for degumming, bleaching and deodorizing of the oil. The oil may be refined by neutralizing the free
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se high speed centrifuge, and ultrafiltration and reverse osmosis lters for separation and recovery of value-added co-products from seeds.
fatty acid with caustic or by stripping it with steam during deodorization. A one-gallon deodorizer is also available for lab-scale trials. There are 5 and 50 gallon glass-lined reactors for scaling-up lab chemistries, a three-phafi Algae There may in future years be a need for extraction facilities with the flexibility of extracting oil from algal biomass. Ultrasonic and microwave technology is being researched as a potential means of extraction for algae currently, but more proven technologies may be utilized if algae becomes a commercial reality in biofuels production. C. Processing Strategy for West Tennessee Process Steps for CO2 Extraction Canola is a small oilseed like sesame seed so the first step in preparation is flaking to expose the oil cells. These flakes contain approximately 40% oil which are then conditioned at a temperature of approximately 200 F. The heat conditioned flakes are then passed into an expeller which reduces the oil content to approximately 20% mechanically. After passing
rough a dryer/ cooler the press cake is conveyed to extraction where the remaining oil is
to small pieces and then flaking to increase surface area and expose the oil cells. onditioning is then accomplished by heating to an elevated temperature for a short period of
thremoved by an additional extraction step which could be represented by CO2 mechanical or solvent extraction. If the operation elects to process sunflowers, the process entails preparing seeds by first cracking inCtime. The conditioned flakes are next sent through an expeller in order to reduce the oil content and further break open the oil cells. Some oil is removed in this step. The remaining oil is removed during the subsequent step of CO2 mechanical or solvent extraction. Processing steps for canola and sunflowers are denoted in the following diagram.
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hanical extr d o n e is utilized i tracti to ma tion e he
w sing orat le oilseed extraction eration.
Multiple Oilseed Process Flow If CO2 mec action is utilize n high-oil-conte t seeds, the sam prepressing steprequired as is n solvent ex on in order ximize extrac fficiency. Tfollowing diagram sho s the proces steps incorp ed in a multipop
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iscussion
Alternative Oilseed Processing Operation Flow Diagram
Dirty Day Bin
Seed CleanerClean Day Bin
D
BA recommends that an extraction operation no smaller than 150 tons per day processing apacity be considered if a multiple oilseed extraction operation is constructed. The processing cility will initially need to be configured to process canola and HEAR. A baseline processing
ize of 200 tons per day will be examined in the capital and operating cost sections of this port. If canola and other alternative crop acreage is successfully added in the region,
dditional capacity may be added to the extraction facility.
Fcfasrea
Seed Conditioner
Seed Preheater
Flaker
Cracking/Dehulling (Sunflowers)
Dirty Day Bin
Seed CleanerClean Day Bin
Seed Preheater
Cracking/Dehulling (Sunflowers)
Flaker
Seed Conditioner
Settling Tank Filter ProcessExpellers
CO2 Mechanical Extraction Metering
TankMetering
Tank
Refinery
Crude Storage
Truck aRail Ta
nd nk
Car Loadout
Cooler
Grinders/Pelleting
Meal Bins
Warehouse/Flat Storage
Truck and Rail Car Loadout
Oil FootsSettling Tank Filter ProcessExpellers
CO2 Mechanical Extraction Metering
TankMetering
Tank
Refinery
Crude Storage
Truck aRail Ta
nd nk
Car Loadout
Cooler
Grinders/Pelleting
Meal Bins
Warehouse/Flat Storage
Truck and Rail Car Loadout
Oil Foots
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Required Seed with Product Volumes The following volumes of seed and resulting processed products would result from various processing capacities:
Capacity (Tons Per Day)
Required Acreage at 1500 Lb. Avg. Yield
Annual Canola Seed (T )
Annual Canola Oil (Tons)
Annual Canola Meal (Tons)
25 10,000 7,500 2,531 4,688 50 20,000 15,000 5,063 9,375
100 40,000 30,000 10,125 18,750 150 60,000 45,000 15,188 28,125 200 80,000 60,000 20,250 37,500 250 100,000 75,000 25,313 46,875 300 120,000 90,000 30,375 56,250 500 200,000 150,000 50,625 93,750
CO2 Mechanical ExtractionOilseed and Product Volumes t 300 Annual Operating Days
ons
a
Canola nce Processing Mass Bala
2000 Lbs. Seed
@10% Moisture
@ 40% Oil Content
1250 Lb. Meal @ 10%@ Moisture
675 Lbs. Oil
75 Lbs. of Shrink (3.75%)
CO2 Mechanical
(≈ 93% Oil Recovery)
1313 Lb. Meal @ 10%@ Moisture
612 Lbs. Oil
75 Lbs. of Shrink (3.75%)
2000 Lbs. Seed
@10% Moisture
@ 40% Oil Content
Conventional Mechanical
(≈ 85% Oil Recovery)
2000 Lbs. Seed
@10% Moisture
@ 40% Oil Content
1250 Lb. Meal @ 10%@ Moisture
675 Lbs. Oil
75 Lbs. of Shrink (3.75%)
CO2 Mechanical
(≈ 93% Oil Recovery)
1313 Lb. Meal @ 10%@ Moisture
612 Lbs. Oil
75 Lbs. of Shrink (3.75%)
2000 Lbs. Seed
@10% Moisture
@ 40% Oil Content
Conventional Mechanical
(≈ 85% Oil Recovery)
1313 Lb. Meal @ 10%@ Moisture
612 Lbs. Oil
75 Lbs. of Shrink (3.75%)
2000 Lbs. Seed
@10% Moisture
@ 40% Oil Content
Conventional Mechanical
(≈ 85% Oil Recovery)
2000 Lbs. Seed
@10% Moisture
@ 40% Oil Content
Conventional Mechanical
(≈ 85% Oil Recovery)
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Capacity (Tons Per Day)
Required Acreage at 1500 Lb. Avg. Yield
Annual Canola Seed (Tons)
Annual Canola Oil (Tons)
Annual Canola Meal (Tons)
25 10,000 7,500 2,295 4,924 50 20,000 15,000 4,590 9,848
100 40,000 30,000 9,180 19,695 150 60,000 45,000 13,770 29,543 200 80,000 60,000 18,360 39,390 250 100,000 75,000 22,950 49,238 300 120,000 90,000 27,540 59,085 500 200,000 150,000 45,900 98,475
Mechanical ExtractionOilseed and Product Volumes at 300 Annual Operating Days
BA selected a 200 TPD capacity as the baseline comparison for its capital and operating cost omparisons between CO2 mechanical and conventional mechanical extraction. Canola presents the baseline processing stock, although cracking/dehulling for soybeans and
unflowers may be considered as the project develops.
ilseed Processing Facility Conceptual Description for 200 TPD Capacity
Fcres O
200 TPD multiple oilseed processing operation could include the following components:
Location/Operations
A
Description Capacity Real Estate Land Access to Utilities and Rail Required Estimated 20 - 30 Acres
Ideal Administrative Office Private Offices, Reception Area, Scale
Room 1500 - 2000 Sq. Ft.
Laboratory Quality Control Testing Equipment 400 - 500 Sq. Ft. Warehouse Miscellaneous Storage; Contract Seed,
Etc. 10,000-20,000 Sq. Ft.
Seed and Oil Storage Seed Storage Steel Bins and Warehouse Flat Storage 1,400 to 2,800 Tons Meal Storage Hopper Bottom and Overhead Bins 360 to 600 Tons Oil Storage Steel Tanks 1.3 to 1.9 Million
Gallons Production Oil Extraction Continuous Screw Presses and Harburg
-Freudenberger Presses if CO2 200 Tons Per Day
Refinery Refining, bleaching and deodorizing 80 - 100 Tons Per Day Seed Receiving 2 Dump Pits 48 Trucks/ 8 Hr Day
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Oil Loadout Truck Loadout 48Trucks/8 Hr. Day Meal Loadout Rail and Truck Loadout 24 Trucks/8 Hr. Day
Storage and Handling Recommendations
ith its small seed size and sensitivity to heating, canola and other Brassica crops must be tored in grain bins on flat storage units that do not allow moisture entry or seed escape. Joints etween structured components (roof to wall) must be sealed carefully. Additionally if the seed to be conditioned inside the storage structure, increasing seed depth greatly increases the tatic horsepower required to aerate the grain. If existing aerated storage bins are utilized for anola the tanks would only be able to be filled from 1/3 to 1/2 full.
It is best to store canola in either small upright storage tanks with grain depths of less than 50 feet or in flat storage buildings such as those used for cottonseed storage. These facilities must be thoroughly sealed to prevent seed losses. The availability of flat storage may be greater with the large number of cottonseed storage facilities that are typically empty during the May through June canola harvest. As previously discussed provisions would need to be made to seal the idewalls of these buildings to prevent losses. Canola is dried at moisture levels above 10%,
humidity levels in the Southeast may require drying at % or higher. Close monitoring and adherence to strict storage guidelines is required for canola
Labor
Wsbissc
showever, the higher temperatures and8and other high-oil-content crops.
Based on the baseline 200 ton per day processing capacity, the extraction and refining operation would employ between 20 to 30 full time employees. The following is a description of typical positions in oilseed processing facilities. General Manager – The GM is responsible to the Board of Directors for the bottom-line plant profitability. He establishes the plant vision and mission and communicates same to employees and customers. The General Manager is the primary contact with the local community and works to establish a positive community image. The General Manager in conjunction with the Board of Directors establishes the strategic direction for the company and develops plans to implement that direction. The General Manager will be directly involved in the negotiation of all ontracts for Feedstock Procurement, marketing of all off-take products, and the Facilities anagement contract ensuring Sustainable Systems receives maximum value and benefit.
Identification and selection of an experienced General Manager will be accomplished through sourcing from all industry related organizations known for utilizing “Best Practices” in the deployment of skilled personnel. Controller – The Controller oversees the financial aspects of the business by managing the cash flow and working with the plant lenders. He develops the monthly operating reports and ensures that applicable fees and taxes are paid in accordance with financial procedures. He oversees the accounts receivable and payable functions as well as the plant purchasing function.
cM
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Operations Director – This key role in the organization ensures that production goals are met both in terms of quantity and quality. In addition this individual is accountable for meeting budgeted production costs. The Operations Director approves the hiring and retaining of team leaders and plant operators and is also responsible for their proper training and qualification. This position is held accountable for operating the plant safely and in accordance with the state issued environmental permits. Custodian – This position is responsible for the efficient operation of plant systems. The position develops an annual capital improvement plan in conjunction with the plant’s Operations Director and oversees the design and construction of capital improvement projects as needed.
ookkeeper/Receptionist – This position performs administrative duties as determined by the
efficient operation of all plant systems uch as electrical, controls etc. The position develops an annual capital improvement plan in
ovement projects as eeded.
oreman – Chosen from among the plant operators the Foreman coordinates the plant production activities on a particular shift. The Foreman will also be trained and qualified to operate any part of the plant in a backup role to the plant operator. The Foreman works both within the team and with other plant support personnel to optimize plant output and quality. Quality control – The responsibility for quality control personnel determine the testing r ue ed. The samples are collected and analyzed with record keeping documented so that any questions of p ty currently Maintenance – These in als will be responsible for carrying out the work orders generated by the plant operators in a safe manner that minimizes the disruption of production capacity. Maintenance mechanics will be skilled at maintaining all the types of equipment found in the plant in addition to weldin P rs – Plant operators, after a thorough training andaspects of plant operations, are assigned a particular section of the plant as their primary responsibility (Extraction, Refinery, etc.). Plant operators are to be al labor force after a selection process that examines their ability to work member of a cohesive t assigned m lf serving a d ears” o Pt r troubleshoo er to ction g
BGeneral Manager and Controller, primarily accounts receivable, payable, payroll administration, and visitor reception. Plant Superintendent – This position is responsible for thesconjunction and oversees the design and construction of capital imprn F
is to equirements and freq ncy of sampling to ensure quality oil and meal are produc
roduct quali or at a later date can be confirmed.
dividu
g and pipefitting.
lant Operato qualification process in all
selected from the loc as a
eam. They are s the “eyes an
to work in either the computer control roof the operation of the process equipment.
or in the plant itselant operators along with the
eam leade t and resolve process upsets in ord meet that shift’s produoals.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final D. Capital and Operating Costs
apital Costs
he construction of a 200 ton per day oilseed processing operation utilizing C0 mechanical
C T 2extraction technology and including a 100 TPD oil refinery could be expected to require an investment of approximately $12.3 million. A refining operation for vegetable oils typically consists of neutralizing fatty acids in oil with caustic. Estimates are Preliminary.
200 Tons per Day Crown CO2 Refining Total
Equipment Cost $2,500,000 $1,600,000 $4,100,000
Total Installed Cost $7,500,000 $4,800,000 $12,300,000
Depreciation/Ton 8.33 5.33 13.67
Working Capital Oilseed processing is highly capital intensive, particularly in view of higher than historical average seed, meal and oil prices. Oilseed producers and shippers generally expect to be paid
ithin a few days of delivery while buyers of the products expect to have 30 days or more to paw y m. In addition, significant inventories of oilseeds and vegetable oil are possible. An ed $1 to $3 million in working capital should be initially budgeted for a processing plant
for thestimate
approximating 200 tons per day in processing capacity. Total Project Cost
FBA estimates total project costs including equipment, installation, and working capital at $14,835,500. The availability of existing infrastructure could significantly reduce the required project investment. Operating Costs The following operating cost estimate is provided for CO2 extraction.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Crown CO2 Refining Total
Variable Cost/Ton - $CO2 1.71 0.00 1.71Water 0.00 0.03 0.03Power 0.79 1.33 2.12Steam 0.95 1.62 2.57
SemiVariable Cost
Labor & Benefits 20.03Taxes 1.25 0.80 2.05
Subtotal 3.45 2.98 6.43
/Ton - $Supplies 0.17 0.11 0.28Maintenance 0.50 0.32 0.82
Subtotal 0.67 0.43 1.10
Fixed Cost/Ton - $
Insurance 0.63 0.40 1.03SGA 1.67 1.07 2.74Depreciation 8.33 5.33 13.99
Subtotal 11.88 7.60 39.84
Total Cost/Ton - $ 16.00 11.01 47.37
E. Potential Processing Locations 1. Producers Mid-South Covington FBA examined several locations in West Tennessee for the locating of an oilseed crushing facility. One potential location examined was the Producers Mid-South cottonseed storage acility in Rialto (Covington). The facility isf located on 25 acres off of Highway 51. Producers
Light. The site is also served by the municipal sewer.
Mid-South is a wholly owned subsidiary of Producers Cooperative Oil Mill in Oklahoma City (PCOM). As mentioned previously, PCOM has retrofitted its cottonseed crush plant in Oklahoma City to enable it to process additional volumes of canola and sunflower. PCOM is open to the potential of establishing a processing facility in one of its three storage locations in the AgBio region located in Covington, TN, Kennett, MO and Osceola, AR. The Covington location has two flat-storage warehouses with approximately 30,000 tons of capacity each. The site has access to a Class I track of the Canadian National Railway. Cottonseed is currently shipped to northern dairy markets via this rail line. The sites utilities are provided by Covington
ower &P
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Covington Site
Rail Spur Seed Auger Pit
The Port of Memphis represents a potential location for a processing project in West Tennessee. A location in the Port of Memphis would maximize logistical delivery options for the project. The Port of Memphis segmented into Presidents Island and Frank C. Pidgeon Industrial Park. President’s Island and accompanying Frank C. Pidgeon Industrial Park are serviced by the Canadian National/IC Railway, which has reciprocal switching agreements with Burlington Northern Santa Fe and Union Pacific. Norfolk Southern and CSX rail lines also can be served indirectly from the Port. The Port has immediate access to Interstates I-55 and I-40, providing
Truck Scale Warehouse Storage & Seed Conveying
2. Port of Memphis
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Memphis Bioworks AgBio March 2009 Business Development Overview Final excellent truck access to potentially substantial oilseed producing regions of Arkansas, Mississippi and Tennessee. A centralized regional location would be ideal for procuring seed from producers in Arkansas, Mississippi and Tennessee. In addition, the presence of 2 barge fleeting services and a multitude of barge & truck transport services In the Port would present shipment and delivery options. Barge access could provide the option of establishing delivery points for alternative oilseeds up and down the Gulf Intracoastal Waterway, as well as the potential for exporting of protein meal. A number of firms operate in the firm with which a potential synergistic relationship might be achieved. The potential exists for offtake of industrial oils and biomass cogeneration utilizing oilseed hulls or high glucosinolate protein meals unacceptable for livestock use. The TVA Allen Power Plant has successfully utilized biomass in its cyclone boilers in the past. The Port has 5 grain terminals and a corn wet milling operation operated by Cargill.
Port of Memphis Operations
FBA spoke with a Port representative with respect to the potential of locating an extraction operation. All Presidents Island locations with barge access are currently occupied. However, the potential of leasing space from existing tenants could be explored. Frank C. Pidgeon
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Industrial Park has the potential for bar a I, but no natural gas, sewer or water capability presently.
ge access in Are
Rates
Per discussions with a Port Repr
esentative, property in the Portbetween $3 to $6 per square foot, depending on square foot rate is in place for the Port as a acre parcel would cost approximately $1.7 million. 3. Rivergate Industrial Port The Rivergate Industrial Port is a private port within the Port of Belz Properties. Rivergate is the largest priv tely owned and developed multi-use industrial port on the U.S. inland waterway system. The location has adequate natural gas, electric, water and sewer capability and has the same Canadian National/IC Railroad service as the rest of the Port f Memphis. h Frank C. Pidgeon and Rivergate Industrial Port are accessed by Mallory venue versus Presidents Island which is accessed by McClemore Avenue. A Rivergate
Induat a
Rivergate Industrial Port
of Memphis will typically cost the infrastructure. A minimum $1.25 per
whole. Assuming a $4 per square foot fee, a 20
Memphis. Rivergate is owned bya
o BotA
strial Port representative indicated that 90 acres of riverfront property are currently available cost of $55,000 per acre.
4. Hardy Bottling Company Hardy Bottling Company owns a contract packaging facility in Southeast Memphis. The location is situated on 132 acres adjacent to the Burlington Northern Santa Fe rail yard. The location
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n operations (currently idle).. FBA was apprised of this operation s a potential location late in this study. The facility should be further examined for its viability
F. Oilseed Transport Transportation is a key component in both feedstock procurement and product sales for an oilseed processing facility. The AgBio region has a very extensive truck and rail transportation infrastructure. The majority of inbound feedstock will be procured by truck, and a high percentage of products will be shipped out by truck. Nonetheless, a commercial-scale processing facility should have rail access, preferably Class I if available. The option to make or take barge shipments also opens significant market opportunities for a plant. The following table indicates an estimation of typical costs associated with transportation of oilseeds by mode of transport.
has substantial existing infrastructure including storage, truck, rail access and the capability to recover CO2 from fermentatioaas a potential location for oilseed processing.
Hardy Bottling Facility
Type Transport Quantity Capacity
(Tons)$ Cost per Ton-Mile 100 Mi. 200 Mi. 300 Mi. 500 Mi. 1000 Mi.
Truck 1 25 0.13$ 312.50$ 625.00$ 937.50$ 1,562.50$ 3,125.00$
Truck w/ Backhaul 1 25 0.10$ 250.00$ 500.00$ 750.00$ 1,250.00$ 2,500.00$
Rail 1 97.5 0.0585$ 998.84$ 1,255.68$ 1,712.30$ 2,853.83$ 4,566.12$
Barge 1 1500 0.0223 3,345.00$ 6,690.00$ 10,035.00$ 16,725.00$ 33,450.00$
s mentioned earlier in this report, a bushel of canola weighs approximately 50 lbs. versus 60 Albs. for a bushel of soybeans. One large semi will transport approximately 23 tons of canola seed. Any leaks or cracks must be sealed during transport. The following table provides and estimated cost per mile for delivery of canola other Brassica crops.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
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Delivery MCanola
iles 25 50 100 150
Cost Per Loaded Mile $4 $3.50 $3 $2.50
0.20 $0.35 $0.60 $0.75Total Cost Per Lb. $0.0020 $0.0035 $0.0060 $0.0075
Estimated Cost of Delivery Per Truck $100 $175 $300 $375
Tons of Seed Per Truck 25 25 25 25
Total Cost Per Ton $4 $7 $12 $15Total Cost Per Bushel $0.10 $0.18 $0.30 $0.38Total Cost Per CWT $
Sunflowers have extraordinarily light test weights per bushel, ranging from 24 to 32 lbs. The light test weights also make sunflowers difficult to transport large distances economically. Cracks and leaks must be sealed during transport the same as canola, and in cases of long transport distances tarping may be necessary. The following table provides an assessment of the costs associated with transporting sunflowers.
Delivery Miles 25 50 100 150
Cost Per Loaded Mile $4 $3.50 $3 $2.50
Tons of Seed Per Truck 14 14 14 14
Total Cost Per Ton $7 $13 $21 $27Total Cost Per Bushel $0.10 $0.18 $0.30 $0.38Total Cost Per CWT $0.36 $0.63 $1.07 $1.34Total Cost Per Lb. $0.0036 $0.0063 $0.0107 $0.0134
Total Cost of Delivery Per Truck $100 $175 $300 $375
Sunflowers
If an oilseed extraction facility were sited in Memphis, the majority of oilseeds required to supply the facility by truck would most economically be sourced within a distance of 150 miles. Protein meal must be transported to local livestock markets, often providing an opportunity for a backhaul discount. G. Permitting Requirements
ssing facility in Tennessee to include the following permits: A CO2 extraction oilseed proce
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
Air Operating Permit Water Discharge Permit Water Appropriation Permits Storage Tank Permit Boiler License Highway Access Permit Possible Easement Rights IV. Project Development A. Strategic Partners
has identified the following entities as potential strategic partners for the development of ing capacity in the AgBio region:
MC Biogenix
niversity of Memphis Memphis Biofuels Hardy Bottling B. Potential Programs Applicable to Project The programs could be potentially applicable to the development of a multiple oilseed crusher on a state and federal level.
National Pollutant Discharge Elimination System (NPDES) Oil Pollution Prevention and Spill Control Measures Construction Permit Storm Water Pollution Prevention Permit
FBAalternative oilseed process 25 Farmer Network Monsanto/Dekalb® Producers Cooperative Oil Mill Producers Mid-South Cooperative John Deere Regional Producers - West Tennessee, Arkansas and Mississippi PNuOil Agricenter International U
1. State Programs FastTrack Infrastructure Development Program (FIDP) - Funds infrastructure improvements associated with existing private sector businesses locating or expanding in the state and to create or retain jobs for Tennesseans.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Funding provided for, but not limited to the following activities:
• Water Systems - source development, intake structures, treatment plants, storage tanks, transmission lines, and other improvements normally associated with the provision of public water service.
• Wastewater Systems - collector lines, treatment plants, and other improvements normally associated with the provision of public wastewater service.
• Transportation Systems - access roads, rail sidings, port facilities, airport improvements, and other improvements normally associated with the provision of public transportation service.
• Site improvements - limited to extraordinary situations where physical conditions of the site must be altered before construction can occur, site improvements will normally not involve improvements to land owned or to be purchased by the company.
nnessee Infrastructure Improvement Program (TIIP) - This fund can be used to offset infrastructure improvement costs, site grading costs and other infrastructure - related costs. The maximum amount available to any one project is $750,000. The amount of the grant is based on a cost-benefit analysis conducted by the State.
Training Assistance Program
• Other improvements - to physical infrastructure may be eligible if it can be demonstrated that the improvements are required for the location or expansion of private business. No infrastructure improvements, however, will be allowed on land owned or to be purchased by the company.
Te
- Training assistance for new and existing business and industry is available as an incentive by the State of Tennessee when associated with new investment for facilities, equipment and new job hires.
FastTrack staff helps a company plan, develop and implement a customized training program that meets initial training needs with follow up to insure each phase of the training program is effective and flexible.
he FastTrack Job Training Assistance program is funded by the state's budgetary process and
rs can provide classroom and On-the-Job Training (OJT). d instructor cost either by company personnel or selected
r the ment
are contingent upon the project and the need of the local area.
Tutilizes only state-appropriated funds for training. FastTrack is the primary source of financial support for new and expanding business and industry training. Blended with the company's staff and other vendors, FastTrack will coordinate directly with the company to develop and implement the necessary skills and knowledge training program.
Company technicians and instructoeimbursement of development anR
vendors, including educational institutions are eligible for support. Travel-related cost, fopurpose of training, is considered a viable training expense. Training facilities and equip
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Department of Labor and Workforce Development - can provide assistance in the recruitment of
e provided and may include accepting and s, testing, and referral of qualified applicants, based upon the company-
pment also administers the Workforce Investment Act rovide training assistance for those eligible participants.
tnership
qualified job applicants. Recruitment services can bscreening applicationprepared specifications. Workforce Developrogram, which could p Tennessee Manufacturing Par - Assists manufacturing firms by providing engineers and
, the Oak Ridge National Laboratory and public and private universities address problems and support industry through the application of technology.
y
scientists from NASAand colleges to Tennessee Valley Authorit - TVA offers a federal economic development loan program to ssist businesses in financing industrial development projects, including new industrial plants,
nfrastructure development and service industries. A maximum illion per project is available with up to 10 years to repay. All
al government or established non-profit economic development receiving loans are eligible to purchase through TVA Distributor
aexisting industry expansions, i
w interest loan of up to $2 mloloans are through a locrganization. Companies o
Procurement Partnership (DPP).
ranchise Jobs Tax CreditF - New or expanding businesses with 25 new full-time jobs and capital st $500,000 can qualify for a $2,000 credit against its franchise tax liability
ated. investments of at leafor each new job cre Industrial Machinery Tax Credit - O
d by the Tennessee Dene percent (1%) of the cost of industrial machinery that has partment of Revenue, Sales and Use Tax Division, can be
ludes distribution equipment, companies that qualify
e Jobs Tax Credit.
been certifietaken as an industrial machinery excise tax credit. This credit inc
ment and telephones for all types of new and expanding computer equip Franchisfor the
Sales Tax Exemption - Sales tax exemptions and reductions are available on industrial
and water used in manufacturing or processing of products for resale off machinery, energy, fuelthe premises. 2. Local Assistance Programs Payment-In-Lieu-Of-Tax (PILOT) -Manufacturing, distribution and corporate/divisioheadquarters projects may qualify for a property tax freeze. The Memphis/Shelby County
ivision of Planning and De
n
velopment gathers project data from the companies expanding or is and Shelby County to justify a PILOT recommendation. City and county the project data and compare it to PILOT criteria concerning job creation,
for formal approval. The "Application for PILOT" form ust be completed and submitted with an application, and closing fees.
Drelocating to Memph
dministrators reviewawages, investment and location. When a PILOT recommendation is made, the company applies to the Memphis and Shelby
ounty Industrial Development BoardCm
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
dustrial Revenue Bonds In - The Memphis and Shelby County Industrial Development Board is aut rbonds Fas T
ho ized to issue bonds for financing industrial facilities. Tax-exempt industrial development are available for manufacturing operations.
t rack Permitting - Through the Office of Construction Codes Enforcement, we offer a "Fast program that can cut red tape or delays occasionally aTrack" ssociated with construction
per itconstr On S
m ting. Through this program, review of plans is expedited and we work with the design and uction personnel to ensure an efficient construction approval process.
e- top-Shop Assistance - The One-Stop-Shop (OSS) program is designed to facilitate and ite the regulatory/permit process and to answer questions on building and fire codes, n, utilities, permitting or other issues. During an OSS session, company re
expedtaxatio presentatives are teconoinitiate
id-South Quality Productivity Center
in roduced to key resource people in local and State governments and members of our mic development team who can answer questions. These resource people can also any required permits or reviews.
M - The Mid-South Quality Productivity Center (MSQPC) is
uction training through the Center’s Process Activated Training System (PATS).
a partnership of the Memphis Area Chamber of Commerce & Southwest Tennessee Community College at Memphis. The center provides training and consulting services that include ISO 9000 training, consulting and workshops; Malcolm Baldrige National Quality Award Assessments and Self-Assessment training; and cycle-time red
University of Tennessee Center for Industrial Services (UTCIS) - This program offers existing industries no-cost assistance in helping to solve their managerial and technical problems. Issues addressed include industrial engineering, plant layout & process improvement, waste assessments, solid & hazardous waste & selling to the Federal Government. Utility Incentive Rates - MLGW offers electric and natural gas incentive rates to qualified businesses locating or expanding in the Memphis service area. Electric incentive rates are
available for new or expanding loads through the Enhanced Growth Credit, Variable Price Interruptible, Time-of-Day and Limited Interruptible Power programs. A special 5% demand billing credit is available to large manufacturers exceeding 5,000 kW demand monthly. Natural gas incentive programs include the Prime Plus Program, Interruptible Gas Service and the Economic Development Discount Rider.
Service to Local Industry Program - This program is sponsored by the Memphis Regional Chamber of Commerce; Memphis Light Gas & Water Division; and local city, county, and state governments to focus on the retention, expansion and growth of businesses in Memphis and Shelby County. The program offers assistance with expansion projects or other specific concerns such as utilities, employee job training, franchise job tax credits, Payment-In-Lieu-Of-
ax (PILOT), One-Stop-Shop meetings, Fast Track Permitting and available industrial building and land sites. T
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Memphis Bioworks AgBio March 2009 Business Development Overview Final Enhanced Growth Credit Program (EGCP) - Enhanced Growth Credit is a TVA program offering credits on electric bills to businesses locating or expanding in the MLGW service area. This credit is available to new, restarted and expanding loads greater than 100 kW in manufacturing and other specified SIC codes. It provides credit of $6.00/kW on firm demand charges for a
ur-year period. This program is also available to new and expanding qualified all-electric 250 fokW or greater loads. Manufacturers Credit - This program offers a credit for manufacturers (SIC 20-39) in months in
hich customer's metered demand exceeds 1,000 kW. The credit rates are: $1.38/kW for the wfirst 1,000 kW of metered demand, $1.63/kW for metered demand in excess of 1,000 kW and $0.0054/kWh. The credit is applicable to firm demand and energy charges for customers on the GSA Part 3 rate. Economic Development Discount Rider - The Economic Development Discount Rider offers credits on natural gas bills to businesses locating or expanding in MLGW’s service area. The discount rate is available to new and restarted loads greater than 2,500 Ccf/day when signing a
ree-year contract with MLGW. The monthly discount varies from $.0098/Ccf to $.0265/Ccf
USDA/Federal
thdepending on the contract length and whether or not the customer is new or expanding. Expanding customers receive larger credits than new customers. 3.
Delta Regional Authority - Delta Regional Authority serves 240 counties and parishes within the Delta areas of Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee. DRA strives to help economically distressed communities leverage other federal and state programs that are focused on basic infrastructure development, transportation
provements, business development, and job training services. Under federal law, at least 75
impercent of funds must be invested in distressed counties and parishes and pockets of poverty, with 50 percent of the funds earmarked for transportation and basic infrastructure improvements.
Cooperative Services - The goal of the Cooperative Services program of USDA's Rural usiness-Cooperative Service (RBS) is to help rural residents form new cooperative businesses B
and improve the operations of existing cooperatives. To accomplish this, Cooperative Services provides technical assistance to cooperatives and those thinking of forming cooperatives.
Business and Industrial (B&I) Guaranteed Loan Program - The Business and Industrial (B&I) Guaranteed Loan program guarantees loans by commercial local lenders to businesses in rural areas. By guaranteeing loans made by commercial lenders against a portion (up to a maximum f 90 percent) of loss resulting from borrower default, the B&I Guaranteed Loan program is o
meant to expand the available credit for businesses. B&I guarantees can result in a number of benefits to such businesses.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
he loan guarantee may be used for business and industrial acquisitions, construction,
viable projects, under certain conditions.
sing of agricultural roducts, or any project likely to transfer employment from one area to another.
Tconversion, expansion, repair, modernization, or development costs; purchase of equipment, machinery, or supplies; startup costs and working capital; processing and marketing facilities; pollution control and abatement; and refinancing for
The 1996 Farm Bill created another eligible use for B&I Guaranteed Loan funds: the purchase of startup cooperative stock for family-sized farms where commodities are produced to be processed by the cooperative. Ineligible loan purposes include lines of credit, agricultural production that is not part of an integrated business involved in procesp
Federal-State Marketing Improvement Program (FSMIP) - The Federal-State Marketing Improvement Program (FSMIP) provides matching funds, on a competitive basis, to state departments of agriculture and similar state agencies to study or develop innovative approaches for marketing agricultural products. Federal funds totaling $1.347 million have been provided for this program in the USDA budget in recent years.
(RBEG)
FSMIP funds can be requested for a wide range of research and service work aimed at improving the marketing system or identifying new market opportunities for agricultural, horticultural and viticultural products; dairy products; livestock and poultry products; bees; forest products; fish and shellfish; and value-added processed products.
Rural Business Enterprise Grants - The purpose of the Rural Business Enterprise rants (RBEG) program is to finance and facilitate the development of small and emerging
rant funds may also be used for the acquisition and development of land and the construction
Gprivate business enterprises in rural areas through grants to public bodies, nonprofits, and federally recognized Indian Tribal groups. This includes starting and operating revolving loan funds, business incubators, and industrial parks.
Gof buildings, plants, equipment, access streets and roads, parking areas, and utility and service extensions; refinancing; fees for professional services; technical assistance and training; startup operating costs and working capital through a loan from a revolving loan fund, providing financial assistance to a third party; production of television programs to provide information to rural residents; and creating, expanding, and operating rural distance learning networks.
Rural Cooperative Development Program - Rural Cooperative Development Grants are made r establishing and operating centers for cooperative development to improve the economic fo
condition of rural areas by developing new cooperatives and improving operations of existing cooperatives. The USDA tries to encourage and stimulate the development of effective cooperative organizations in rural America as a part of its total package of rural development efforts.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
. Project Estimate & Schedule
x x X $1,000,0000 - $2,000,000
ification of Existing
x $15,000,000
C The following timeline and cost estimate is recommended for the project*:
Activity Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan12 Jan 13 Estimated CostDetermination of Strategic
Potential Project Timeline
Partners x xInstallation of Lab Scale Expeller Testing Facility x x $10,000 - $20,000
Retrofit of Regional Crusher for Co-Processing of Alternative Oilseeds
ModStorage Location(s) for Oilseed Delivery/Storage x x UndeterminedEquity Drive for Multiple Oilseed Crush/Refinery Facility x x UndeterminedConstruction and Startup 200 TPD CO2 Crush and
fining x xRe crushing capacity is currently considered only an option for the region as there is no existing eration in West Tennessee.
high erucic acid rapeseed and potentially
*Retrofitting of existingoilseed extraction in op V. Conclusions & Recommendations Project Conclusions
1. Potential Oilseed Crops
• The most viable alternative oilseed crops in the region based on agronomic factors and market demand are sunflowers, canola,camelina.
• Flax can be produced in the region, but markets are not as competitive as for other oilseeds.
• Some crop researchers have successfully produced back to back winter and spring camelina crops due to the crops extraordinarily short period to maturity (85 - 100 days).
• Crambe has excellent market potential due to its high-value oil, but is sensitive to extremes of cold and heat. As crambe is a spring crop, it may be difficult to establish significant production in the southeast.
• Pennycress and coriander are both crops that may be viable for commercial production in the region, but further research needs to be conducted at test plots in order to determine proper production protocol for this climate.
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
• Lesquerella and meadowfoam are both crops with excellent potential as sources of
naf, calendula, euphorbia, jojoba, jatropha.
in the not too distant future.
• PMC Biogenix (formerly Chemtura) operates one of the largest U.S. oleochemical
DOW Halterman, Degussa (Evonik), Harcross Chemicals, Lambent Technologies, Peter Cremer, Stepan, Twin Rivers Technologies and
otential market for oils such as canola.
logy and Processing Strategy
• Extracting oilseeds mechanically leaves an approximate 8% residual oil content in the meal fraction versus 4% for CO2, and 1% for hexane and butane extraction technology.
• Castor is not recommended due to concerns with toxicity, the presence of allergens and difficulties with mechanical harvest.
• Cuphea is considered a high maintenance crop with limited yield potential. It is not believed that cuphea could be competitive with other crops grown in the region.
industrial oils, but current varieties are not suited to this region. • There are a number of other potential oilseed crops that are not at present suitable for
commercial production in the Tennessee study region, but could present options as suitable varieties are developed. These include okra, safflower, stokes aster, vernonia galamensis, Brassica juncea, borage (echium), lupin, milkweed, ke
• The sharp decline in cotton production in the southern U.S. may present an opportunity for other oilseed crops if the trend continues unabated.
• Most literature and documented algae research suggests that algae production, harvest and extraction is not economically viable at this time. However, algae production and extraction may become a commercial reality
2. Processing Markets
refineries in Memphis. A representative of PMC indicated that the operation would be interested in procuring locally-produced industrial oils including, but not limited to high erucic acid rapeseed, high-oleic sunflower, crambe, camelina and canola.
• A number of other oleochemical refineries are located throughout the country including Arkema, Cognis, Corsicana Technologies,
V-VF. • A number of biodiesel plants are operational in the region that could represent a potential
market for industrial oils. However, biodiesel markets will typically not pay a premium for any oil feedstock valued higher than commodity grade soybean oil.
• Riceland Foods operates a large edible oil refinery in Stuttgart, Arkansas, while ConAgra operates an edible oil refinery in Memphis. These operations could present a p
• The large volume of poultry production in the Southeastern U.S. represents the primary market for protein meal. Oilseeds such as crambe, camelina and pennycress have levels of glucosinates considered too high for inclusion as a significant percentage in animal diets. The meal from these seeds could potentially be burned as a source of biomass.
Techno
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
traction should be further as a potential processing technology is an alternative oilseed processing operation is established in west
versus conventional mechanical processing and high processing volume requirements for solvent extraction.
• For CO2 extraction to be economical, access to an inexpensive supply of the gas is required. The breakeven for CO2 extraction is a delivered cost of approximately $50 per ton for CO2.
• Solvent extraction also releases significant hexane emissions into the atmosphere and is classified as a hazardous air pollutant (HAP) by the EPA.
• Butane extraction is currently available only in batch processing units and is not believed to be commercially viable at this time.
• Due to the lack of any significant alternative oilseed acreage in the AgBio region, a multiple oilseed crusher might rely on soybeans or cottonseed as its primary processing stock initially. However, these oilseeds have different preparation steps than that utilized for canola or high erucic rapeseed.
• Several significant barriers exist to the establishment of alternative oilseed crops in West Tennessee and the AgBio region. These include: 1) Differences in harvesting methods; 2) A required investment in canola swathers or pushers; 3) A one in three or four year recommended rotation for canola, high erucic acid rapeseed and sunflowers; 4) A residual herbicide constraint for canola and high erucic acid rapeseed limiting there
with traditional crops in t and rice. eds crops in this region include: 1) Establishing
rage points for oilseeds to be shipped to distant processors; 2) processors for proce sing of other oilseeds; 3) Constructing a 50 to
eration at a location with existing er new or used equipment.
•
•
•
•
ture and the capability to recover CO2 from
• CO2 (augmented mechanical) ex
Tennessee. This is due to the increased extraction efficiency
potential planting area; 5) The lack of any regional processing capacity for alternativeoilseed crops; 6) The absence of local crop insurance programs for canola or sunflowers; 7) The reduced risk and strong production potential associated
the region such as corn, soybeans, whea• Potential strategies for establishing oilse
regional delivery/stoRetrofitting regional s100 ton per day extrude-expeller pressing opinfrastructure from eith
Due to sunflowers extraordinarily light test weights (24 - 28 lbs per bushel), transporting them large distances or storing them long periods of time is less economical than for other oilseed crops. The install ation of a bench-scale expeller press and laboratory testing facility would provide the means to analyze the composition of oilseeds produced in the region. The City of Memphis would represent the ideal location for a commercial-scale processing plant due to the strong logistical infrastructure (5 Mainline Railroads and 2 Interstates). A Memphis location would present the opportunity to access seed from producers in Arkansas and Mississippi, in addition to West Tennessee. A location accessible by barge could provide the means to establish alternative seed delivery points along the Mississippi river.
• A potential location that needs to be explored for location of an oilseed extraction operation is the Hardy Bottling Company in southeast Memphis. The location has substantial storage and logistical infrastruc
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
ting cost.
ital. The
rating on canola or high
•
ojected 10-year return on investment of 8.8%. Although
n expense); 2) expanding the
• ent. • The processing facility may be modified accordingly to handle other oilseeds including
ennycress, camelina, etc. • An opportunity may arise to extract oil from algal biomass in the near future.
Pr e
•
• n history would be utilized as the basis for establishing crop insurance in the
•
• m equipment dealers (John Deere, Case IH, etc.) in
•
• n operation.
fermentation. Locating an extraction plant at this facility might result in substantial savings in up front capital and opera
• A 200 ton-per-day CO2 multiple oilseed processing facility would entail an estimated capital cost of $14.8 million. This number includes a refinery and working capoperation would require 60,000 tons of seed, while supplying approximately 20.3 thousand tons of oil and 37.5 thousand tons of meal. If opeerucic rapeseed alone, the operation would require the establishment of approximately 80,000 acres of canola or high erucic acid rapeseed. A preliminary financial analysis for a 200 ton-per-day extraction and oil refining operation utilizing CO2 technology and canola as the baseline feedstock is provided in Attachment III. The operation has a prsomewhat of a marginal return, profits could be potentially enhanced by:1) locating at a site with existing infrastructure (decreased depreciatiooverall processing capacity (decreases fixed costs per ton); or 3) processing oilseeds with significant oil $ premiums, (i.e. HEAR, crambe, etc.) Sunflower dehulling may be added in a second phase of project developm
crambe, p
oj ct Recommendations
Determine interest among potential strategic partners in establishing alternative oilseed acreage in the region.
• Establish an inter-state network of farmers in the AgBio region interested in pursuing alternative oilseed crops. Establish a production history for canola in a county or counties in west Tennessee. The productioregion in future years. Pursue installation of a bench-scale expeller press and testing laboratory at an existing location.
• Pursue interest in establishing delivery points for canola seed and interest in retrofitting existing regional crushing operations for alternative oilseeds. Determine interest among farassisting with alternative oilseed harvesting equipment. Pursue and in-depth and detailed examination of the potential for a pilot-scale CO2 extraction to be located at a location with existing storage and logistical infrastructure. Examine the identified locations for potential interest in locating a CO2 extractio
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Memphis Bioworks AgBio March 2009 Business Development Overview Final VI. T ATTAC
CargillBungeRicePlante CJ.G. BoswChic hSouthern
A TACHMENTS
HMENT I - US Solvent Extraction Plants
U.S. Solvent Extraction Plants (>300 TPD) Y Town / City State Oilseed COMPANY Town / City State Oilseed
Guntersville AL Soybean Owensboro Grain Owensboro KY SoybeanDeca
COMPAN
tur AL Soybean Bunge Destrehan LA Soybeanland Foods Stuttgart AR Soybean Perdue Salisbury MD Soybean
rs otton Oil Mill Pine Bluff AR Cottonseed Zeeland Farm Soya Zeeland MI Soybeanell Co. Corcoran CA Cottonseed MN Soybean Proc. Brewster MN Soybean
kas a of Georgia Tifton GA Cottonseed AGP Dawson MN SoybeanCotton Oil Mill ( Valdosta GA Cottonseed Harvest States Fairmont MN Soybean
Valdosta GA SoybeanADMCargAGPAGPAGPAGPAGPAGPADMCargillCargillCargillCargillBungeCrestlandWest Cen
Harvest States Mankato MN Soybeanill Gainesville GA Soybean ADM Mankato MN Soybean
Eagle Grove IA Soybean Northern Sun (ADM) Red Wing MN SunflowerEmmetsburg IA Soybean AGP St. Joseph MO SoybeanManning IA Soybean ADM Mexico MO SoybeanMason City IA Soybean Prairie Pride Nevada MO SoybeanSergeant Bluff IA Soybean Cargill Kansas City MO SoybeanSheldon IA Soybean Delta Oil Mill Jonestown MS CottonseedDes Moines IA Soybean PYCO Greenwood MS CottonseedCedar Rapids IA Soybean Montola Culbertson MT MultipleDes Moines IA Soybean Cargill Fayetteville NC SoybeanIowa Falls IA Soybean Cargill Raleigh NC SoybeanSioux City IA Soybean ADM Enderlin ND MultipleCouncil Bluffs IA Soybean ADM Velva ND Canola
Coop Creston IA Soybean Cargill West Fargo ND Multipletral Coop (ExpeRalston IA Soybean ADM Fremont NE Soybean
oya Gibson City IL Soybean ADM Lincoln NE Soybean Industries Gilman IL Soybean AGP Hastings NE Soybean
Quincy IL Soybean Central Soya Bellevue OH SoybeanQuincy IL Soybean Central Soya
Central SIncobrasaADMADMADMADMCargillBungeBungeLouis DreCentral S Kershaw SC SoybeanCen SADMCargillConsolida IN Soybean Valley Co-op Oil Mill Harlingen TX CottonseedRos crCon raNorthern dCargBun
Delphos OH SoybeanDecatur IL Soybean Central Soya Marion OH SoybeanGalesburg IL Soybean ADM Fostoria OH SoybeanBloomington IL Soybean Cargill Sidney OH SoybeanCairo IL Soybean Producers Cooperative Oklahoma City OK MultipleDanville IL Soybean Hartsville Oil Mill Darlington SC Cottonseed
yfus Claypool IN Soybean Carolina Soya Estill SC Soybeanoya Decatur IN Soybean ADM
tral oya Morristown IN Soybean S. D. SB Processors Volga SD SoybeanFrankfort IN Soybean Southern Cotton Oil Mill (ADM) Memphis TN CottonseedLafayette IN Soybean Elgin Cotton Mill Inc. Elgin TX Cottonseed
ted Grain Mount Vernone A es Seymour IN Soybean PYCO Industries Inc. Lubbock TX Cottonseed Ag Franklin IN Soybean Southern Cotton Oil Mill (ADM) Lubbock TX Cottonseed
Sun (ADM) Goodland KS Sunflower Southern Cotton Oil Mill (ADM) Richmond TX Cottonseeill Wichita KS Soybean Cargill Norfolk VA Soybean
ge Emporia KS Soybean
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
U.S. Solvent Extraction Oilseed Processing Plants
300 Tons Per Day and Larger
Soybean
CottonseedMultiple Oilseed
SunflowerCanola
©Frazier, Barnes & Associates
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
storical Canola Seed, Oil and Meal Values ATTACHMENT II - Hi
Velva Canola Seed Per Ton Velva Canola
(Delivered) Seed Per Lb. $/Lb. M$201.92 0.101 0.283
RBD Canola Oil Velva Canola eal $/Ton
Jan-05 98.3Feb-05 $190.70 0.095 0.291 110.4211Mar-05 $207.89 0.104 0.341 111.9545Apr-05 $213.43 0.107 0.343 101.4762
May-05 $215.19 0.108 0.335 106.8571Jun-05 $219.11 0.110 0.337 136.381Jul-05 $244.75 0.122 0.333 139
Aug-05 $190.81 0.095 0.319 118.3182Sep-05 $185.87 0.093 0.332 103Oct-05 $239.95 0.120 0.347 105.4762Nov-05 $194.80 0.097 0.326 122.2Dec-05 $188.34 0.094 0.300 134.3Jan-06 $190.00 0.095 0.290 112.75Feb-06 $191.87 0.096 0.289 112.6421Mar-06 $199.27 0.100 0.317 104.3478Apr-06 $206.04 0.103 0.322 99.7211
May-06 $227.81 0.114 0.349 106.1818Jun-06 $220.80 0.110 0.349 103.9091Jul-06 $232.57 0.116 0.366 98.675
Aug-06 $214.62 0.107 0.353 97.5652Sep-06 $216.41 0.108 0.353 98.7Oct-06 $238.95 0.119 0.375 114.1818Nov-06 $257.75 0.129 0.403 120.9Dec-06 $259.35 0.130 0.397 115.7Jan-07 $263.35 0.132 0.383 131.7Feb-07 $266.15 0.133 0.395 150.6667Mar-07 $261.95 0.131 0.394 140.5909Apr-07 $277.94 0.139 0.400 133.165
May-07 $292.54 0.146 0.424 128.9636Jun-07 $311.14 0.156 0.440 136.119Jul-07 $319.74 0.160 0.470 122.8571
Aug-07 $315.74 0.158 0.469 112Sep-07 $338.93 0.169 0.515 131.9474Oct-07 $363.92 0.182 0.553 136.5217Nov-07 $397.12 0.199 0.587 153Dec-07 $425.11 0.213 0.598 219.675
Average $249.49 0.125 $0.38 $121.39
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Memphis Bioworks AgBio March 2009 Business Development Overview Final
TTAC A HMENT III - Preliminary Financial Analysis CO2 Extraction (Canola)
eedstock 100% Canolail Content 42% (d.b.)
otal Incoming Capacity 200 Tons Per Dayperating Days Per Year 300
40%ears Financed 10
ments/Year 1est Rate 7.00%eciation Years (straight-line) 13.5
l Cost $14,835,500Return on Investment 8.8%
AssumptionsF% OTOEquityYPayInterDeprCapita
Page 110 of 118
ATTACHM Alga
Jarvis, E.
Putt, R. National Algae Association
ENT IV - Sources and References
e Beneman, J. Opportunities and Challenges in Algae Biofuels Production. September 2008.
The Potential for Biofuels Production from Algae. National Biodiesel Conference. February 2007. San Antonio, Texas.
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