Advanced BioEnergy is adding year-round corn storage and grain-receiving capabilities that will allow the company to buy corn directly from farmers according to a report at 4-Traders.
The move follows a trend that's been seen in the industry in recent years, said CEO Rich Peterson.
In the past, he said, the plant has sourced all of its corn needs from what is now Agtegra and was previously Wheat Growers.
That contract will expire in November 2019, which is when the Advanced BioEnergy will begin to buy from farmers.
"We're one of the very few ethanol production companies that (buy from a single provider). There's a very small percentage that has these type of agreements," he said. "We're now in a position to go another direction, which is more of a norm in the industry."
Adding storage capacity is similar to what Peterson has seen area farmers do, he said. It provides flexibility that allows them to sell when it's most beneficial.
Initial plans include storage capacity of 800,000 bushels of corn, with room to expand that by an addition 1 million bushels, if needed.
The grain receiving facility will include a 20,000-bushel-per-hour corn receiving pit. It will use radio frequency identification card recognition technology, which will help speed up dumping times, according to a news release about the improvements.
Advanced BioEnergy closed a smaller portion of its ethanol plant known as AB1 in 2016. Tearing down those buildings provided the space for the new facilities, Peterson said.
Construction should begin in June with the work done by July 2019. Three more workers will be added to Advanced BioEnergy's 54 South Dakota employees, according to the release. It also has an ethanol plant in Huron.
Advanced BioEnergy's Aberdeen and Huron plants jointly grind approximately 28 million bushels of corn per year, have a combined production capacity of approximately 85 million gallons of ethanol per year, produce more than 220,000 tons per year of distillers grains, and produce more than 19 million pounds of corn oil per year, according to the release.
Read the full report here.
