Value-Added and Agriculture
Electricity from alfalfa? High grade flame retardant building materials from field stubble? Biodegradable plastics made out of sweet corn fibers?
These are each examples of newly developed or developing uses of traditional ag products that have the potential for opening up new markets for farmers, and thereby enhancing the value of the basic commodity products being used. Value-added processing need not simply be the traditional packing, canning, slaughtering, or milling of commodity products that most of us in the agricultural community tend to think of. Indeed, many of the opportunities that bring agricultural economies to the brink of explosive growth correspond to new uses of basic commodities through PROCESS innovation.
The Minnesota Valley Alfalfa Producers, a farmer-owned cooperative, is leading a public/private effort to develop a $200 million integrated alfalfa processing and biomass energy system. Alfalfa stems will be used to supply a 75-megawatt power plant which will process over 1,000 tons of alfalfa stems per day. A pelletizing facility will also use the alfalfa to create a wide range of high-protein feed products. Some 700,000 tons of alfalfa will be needed per year from the 2,000 farmers in the coop from an estimated 180,000 acres. New processing technology has presented an opportunity to commercialize biomass power that is cost competitive, environmentally friendly, and built upon a renewable resource....alfalfa.
I had an opportunity to meet the coop manager and some of the farmers recently. They were obviously quite bullish about the future of alfalfa and agriculture in their part of Minnesota. The pelletizing facility is up and running near capacity, and they have an aggressive expansion plan. They already export product all over the world and can barely keep up with demand. The biomass energy system is scheduled to be fully operational by 2001. The challenges this group would be facing over the next several years would relate to managing their growth. What impressed me was the way these farmers have taken initiative to build their markets.
Other innovative processes offer great promise for agriculture as well. I was recently introduced to a commercial grade construction material used principally for counter tops. It could be formed and fitted into a fine looking surface any homeowner would be proud of. Furthermore, it was flame retardant....and made entirely from field stubble....corn, barley, and wheat stocks. Products developed through processes like these, when developed on a large scale for the building trade, could continue to enhance the value of our basic commodities.
Numerous other examples of process and product innovations are developing that can expand the demand for our basic commodities. Commercial uses of by-products and waste products represent another entire area where new value can be added to our products. Products traditionally regarded as expensive waste disposal can be transformed through new processes into marketable value-added products.
The Ag Utilization Research Institute, designed to facilitate the development of value-added processing of ag products in Minnesota, has funded over 20 waste utilization projects within the last 8 years, a number of which show some promise.
The agricultural community in Minnesota has not been a passive participant in facilitating value-adding innovations to emerge with their economy. Their proactive efforts to work with entrepreneurs, legislators, potential customers, and each other have been a big part of the development of these new opportunities. There are, no doubt, some useful lessons for us in this formula as we consider means to encourage more value-adding activity here in Kentucky agriculture.
For More Information
For additional information, please contact, Tim Woods.