Episode Transcript
[00:00:00] Speaker A: Welcome to Missouri Corn Doc, your go to weekly agriculture podcast, delivering fast, reliable updates on market development efforts, ethanol demand and the issues shaping today's corn industry. I'm your host, David Geiger. This September marks a major milestone for Poet Bioprocessing Lodonia. Twenty years ago, the plant began turning Missouri corn into ethanol and high quality livestock feed, creating a steady local market for corn while supporting jobs and the regional economy.
Joining us today is Steve Murphy, general manager of Poet Ladonia. We'll look back at the plant's 20 year history, talk about the partnership between this plant and Missouri corn, and look ahead at what we can do together to keep growing demand for American ethanol. Steve, congratulations on 20 years. Let's start with a little history. How did the Ladonia facility get its start?
[00:00:47] Speaker B: Yeah, thanks for taking the time to meet with me today, David. The Poet Ladonia site started. We started grinding corn in September of 06, but the real work was a few years before that when a farmer's co op called Ecentral Ag Products got together and decided they wanted to build an ethanol plant. They had sourced the site because of highway access, railroad access, natural gas pipeline, utilities, water, all the things you need to make an ethanol plant successful. It was always a struggle to get the funding. So over time they partnered up with the Poet plant in Macon, Missouri and Poet, who was brewing industries back in the day, and this site was originally called Missouri Ethanol actually back then to build this plant together. And so it was that farmers co op that got it going. And the goal at the time was to create a market for locally grown corn other than sending it all down the river and create a big end user here in the northeast Missouri area that could bring higher prices to farmers and, and I think we've been pretty successful at that. Best guess is that we've added another 25 cents per bushel over those 20 years to the average delivery price for farmers in our draw area.
[00:02:00] Speaker A: Now this is a major milestone. Can you tell me about what this means from a personal standpoint of what you all have accomplished?
[00:02:07] Speaker B: Plant's been here 20 years. We've got a few employees that have been here for all of that time. I've been here for 17 of those years.
So for me personally, it's always a chance for me to move from automotive industry and get closer to home. Where all my family is in St. Louis, everybody who works at the plant is from all the small towns in a shotgun area around this area. We draw corn from seven counties, really nine. Most of their corn comes from seven Counties. So just right here around the plant, it's all locally grown. So I really enjoy running a site and creating good jobs and creating economic activity for the region. And, you know, it's very satisfying for me to be able to have that kind of impact for farmers, the charities we support, and for all of the 850 farmers we buy from.
[00:02:55] Speaker A: Speaking about economic activity, can we talk about the details of that? It creates demand for Missouri corn here. How much corn do you use and what's the economic impact?
[00:03:04] Speaker B: Right now? We've gradually since 2006, we've added more capacity over the years. Right now we're grinding 27 million bushels of corn every year.
Corn just hit $5. So at $5 corn, 27 million bushels is $135 million we're going to buy from local farmers. And so in a county like Audrain, that's a big economic impact. And over 20 years, we've ground almost 450 million bushels and have generated an estimated $112 million extra revenue for farmers versus selling to the river or other brokers to find end users. So it's a big deal here. And lot more than just ethanol, too, which is also part of the fun of the story.
[00:03:50] Speaker A: Ethanol is more than just fuel. There's a lot of added value from the ethanol industry. Can you tell me more about that?
[00:03:56] Speaker B: Absolutely. So in addition to fermenting the starch of the kernel into ethanol, we also take all the residual that's left over the fiber, the protein, the oil, the minerals and nutrients, and create animal feed with that. So it's a higher protein, concentrated feed from the corn. We try to remove as much of the corn oil as we can. We sell that into the biodiesel industry. We don't process that here, but we sell that to others. We also liquefy CO2. Carbon dioxide coming off fermentation is really, really pure CO2. So it's very efficient. The Macon plant, which is also a PO plant, does that as well. Between the two plants, we capture 700 tons per per day of CO2. That's 250,000 tons a year of CO2. That's sold to Coke and Pepsi and other food processors, animal processing sites. The two plants in Missouri are the only Poet plants that also make dry ice. So we sell dry ice to Arkansas and other states for chicken processing, other things. So we really use every part of the kernel, not just the starch and not just the ethanol story. We're trying to find new markets and expand value with all the Things that kernel has to offer. And I think we're getting better at it all the time. One of the other things we do here at On Site that a lot of people don't recognize is we also generate electricity that goes to the grid.
So we have a utility partner where we do combined heat and power, where they generate electricity, and we take the waste heat to generate steam and that runs distillation.
And that makes our ethanol a very green, low carbon type fuel to replace gasoline. And I don't think that gets enough publicity. Very few people know about it. And the other thing is, we continue to grow. We've got additional expansion planned for 2027. We're going to add an additional fermenter and try to grow production even a little bit more than where we are today.
[00:05:57] Speaker A: So this plant and Missouri corn have a long standing partnership. Let's go over how this partnership builds value for both you and corn growers.
[00:06:06] Speaker B: Missouri corn's been very helpful to us. They help us at an industry level. So they not only help Ladonia and Macon, the two Poet plants, but there are six ethanol plants in Missouri. And so they help all those plants and help us work together as an industry to grow markets and improve our messaging and also get the right message sent in Jefferson City and even Washington D.C. at some level for things that are important, like expanding of markets at retail stations for things like E15 or 15% ethanol, trying to grow markets so that we can continue to buy all those bushels of corn and make more and more ethanol every year. They were a big part of us getting a retailer incentive so that retailers would pay for the infrastructure to put in pumps in order to dispense E15. And so that's one of those things where they work with us on an industry level across all ethanol producers. And so it's good to have that kind of partnership with someone like that.
[00:07:06] Speaker A: E15 is something Missouri corn growers have been fighting for for quite some time, as well as the folks from Poet. How have you all been working to expand access on this?
[00:07:15] Speaker B: That's a long story that started on my first year on the job 17 years ago. We've been working on E15 throughout my working career at Poet because as yields continue to increase, all those additional bushels of corn that are produced per acre are going to need to find a home.
And there's only so many animals that need to be fed every year. There's only so much you can export. And even if you do export, you're subject to tariff wars and trade bargaining and different things.
So finding an end user here at home like the ethanol industry is really key for having growing markets and making sure those markets are sustainable year in and year out. And so that's been a huge focus area because if we could go from 10 to 15% ethanol across the United States, that would require an extra 2 billion bushels of corn and that would really put a floor under corn prices above the cost of production for farmers. So that's really a key thing. The year round waiver has been fought for a long time. It's between the oil industry and the ethanol industry. And now the oil industry is fracturing a little bit between the big producers and the small refineries and small refinery exemptions. And it's a very complicated issue. But at the end of the day, if we can get E15, consumers would be paying a lower price at the pump when prices are already so high. E15 sells typically in Missouri for about 15 cents a gallon less than regular gasoline and is 88 octane compared to regular 87 octane. And it's even better for cars that require higher octane blends mid level, like 91 or 93 octane, because E30 is actually 93 octane and sells for 80 to 90 cents a gallon, discount to premium. So if people know the story of ethanol and the octane that it provides, we've got a really good value proposition to tell everybody about a product made right here at home in the U.S.
[00:09:21] Speaker A: thank you for joining us, Steve, and congratulations to everyone at Poet Bioprocessing Ladonia on 20 years.
[00:09:28] Speaker B: Thank you, David. We're pretty excited about it and we hope we have a big Turnout at our 20th anniversary celebration for Missouri corn growers.
[00:09:36] Speaker A: The story of Ladonia is also a story about demand. For 20 years, the plant has provided a reliable market for locally grown corn while producing renewable fuel and valuable co products. Now, Missouri corn and Missouri's ethanol industry are working together to build on that foundation and find new opportunities to grow ethanol demand for the next 20 years. This Week's corn talk is made possible by the Missouri Corn Merchandising Council and the Missouri Corn Growers Association. To learn more about Missouri corn's efforts to build demand for corn at home and around the world, visit mocorn.org or follow on our social channels.
