By Dan Rahn
University of Georgia

Promising higher profits for hundreds of Georgia farmers, the new
Farmers Oilseed Cooperative, Inc., has moved a step closer to
reality, narrowing to five the list of prospective sites for
their proposed $55 million processing plant.

FOC leaders and others met with representatives of eight
communities July 16-17. The co-op asked five to submit written
proposals. They plan to narrow that to three before beginning
formal negotiations.

“They hope to make a final decision at their board meeting Aug.
9,” said George Shumaker, who accompanied the group on its
mid-July site visits.

55 to 60 employees

The processing plant would employ 55 to 60 people. It will crush
soybeans, canola, peanuts and sunflower seed for oils and other
products.

Shumaker, an agricultural economist with the University of
Georgia College of Agricultural and Environmental Sciences, has
advised the co-op throughout its development.

While the co-op would be new to Georgia, it’s not really new.

“This concept has proven itself time and again in the Midwest,”
he said. “Farmers there recognize the value of joining together
to enhance their profits. And Georgia farmers are just as smart
as Illinois and Iowa farmers.”

Incorporated May 2001

The FOC was incorporated in May 2001, two years after the idea
surfaced in Georgia. With 152 charter members from throughout the
state, the co-op spent the past year developing a business plan,
handling the legal paperwork required to make a stock sale and
laying out the site requirements for the processing plant.

“They decided not to sell stock until they determined where the
plant will be,” Shumaker said. “The most common question they
kept hearing was where the plant would be.”

At one point, the co-op was considering 25 sites. They came up
with about half of those on their own. The rest were added by
industry location specialists Joe Riley of Georgia Electric
Membership Corporation and Bill Dobbs of the Georgia Department
of Industry, Trade and Tourism.

A whirlwind tour

When the co-op narrowed that list to eight, Riley and Dobbs set
up a whirlwind tour for FOC president Billy Wayne Sellers, site
selection chair Ben Deal and Shumaker to see the sites and meet
with community representatives.

“All in all, the visits were very good,” Sellers said. “We had
some strong proposals. Now the committee will have to sort
through them and make the best decision for the farmers. It’s
going to be a hard decision.”

Once the final site is determined, Shumaker said, the co-op will
develop delivery points using existing grain elevators in areas
remote from the plant, so distant growers won’t have far to truck
their crops.

Of the oilseeds the plant would process, only soybeans and
peanuts are grown to any extent in Georgia now.

Bright canola prospects

UGA researchers and extension scientists have touted the profit
potential of canola for at least a decade. But growers have had
no nearby processing plant. A few growers are interested in
growing sunflowers. Both crops produce high-value oils.

All four crops’ value will be higher for co-op shareholders.

“At current market prices (about $5 a bushel), soybean growers
would get about 80 cents more per bushel by marketing through the
co-op,” Shumaker said. “Canola growers could add about $2.40 to
the current $5 per bushel.”

Sellers said that’s the best thing the FOC has to offer. “The
farmer will own the product until it gets to the grocery
shelves,” he said. The added income from the processing is money
farmers don’t ordinarily get.

Shareholders profit

The co-op will buy oilseeds first from shareholders. Other
farmers may be able to sell to the co-op, Shumaker said, but only
shareholders will get the added income for the processing.

To build the plant and begin operations, Shumaker said, FOC will
need 750 to 800 shareholders with average commitments of 275
acres to the co-op. Minimum investments will be 1,500 shares at
$2.25 per share.

“With the economy like it is, that’s going to be a hard decision
for farmers,” Sellers said. “But it’s a good project. It will
work. And I think farmers will realize that once they understand
the concept.”