The nationwide ethanol boom has reached Waverly, and it’s likely to spur even more agribusiness development in the area.

Johnson Grain on Wednesday announced plans to build a 200 million-gallon ethanol plant right next to Johnson Grain’s elevator and grain shuttle train loop just east of Waverly.
The community of approximately 1,300 people is about 20 miles southwest of Springfield.
The plant should be operational by fall 2008. Construction will start early next summer.

Because of Johnson Grain’s ethanol plan, at least one big dairy from California already has inquired about relocating to central Illinois, said Jay Johnson, president of Johnson Grain.

“Our company has been eagerly exploring opportunities to participate in the growing demand for ethanol for both us and our area’s corn farmers,” Johnson said in a statement. “It is a natural fit for us as a grain originator to help bring a new and better market to our farmers as well as reduce our dependence on foreign oil.”

Johnson Grain is one of the investors in the $300 million project. The names of other investors haven’t been announced, but Johnson said they include large entities with ethanol experience.

In addition to the equity investors, Johnson debt financing also is in place.

While the investors will own shares of the ethanol plant, Johnson Grain will continue to operate on its own. Johnson Grain will supply 100 percent of the corn used by the ethanol plant.

Dairy farmers are interested in the area because dairy cattle can be fed distiller’s grain, a byproduct of ethanol production.

“We are at the beginning of a large number of steps that need to be taken before we can break ground, but we are on our way,” Johnson said of the ethanol plant construction.

Zoning and obtaining permits are expected to take six to nine months. The Sangamon County Zoning Committee is expected to vote in July, and the plan should go to the full zoning board in August.

Johnson Grain plans to blacktop the road from Illinois 104 to the facility to make it easier for transportation to the plant.

Johnson said the company also will add storage to accommodate corn for the ethanol facility.

Johnson Grain has 8.5 million bushels of storage now. Another 2 million bushels will be added before this year’s harvest. The new storage will be in a temporary round bunker with steel walls.

“We’re going to need a huge water supply for cooling the plant,” Johnson said. “At times, we’ll need to pump 1,600 to 1,800 gallons per minute. We’re working with the city of Waverly to work that out.”

The ethanol plant will use natural gas to make ethanol.

Johnson Grain will continue to operate its elevator and shuttle trainloads of corn to Texas feedlots on a regular basis. The company has sent 112 trains, carrying 50 million bushels of corn, to its Texas markets since Johnson Grain began the shuttle operation two years ago.

“We’re adding another market for farmers’ corn,” Johnson said. “We’ll still do our shuttle trains to Texas, but this should increase the basis for Illinois farmers even more. I’m not sure how many acres will be switched to corn because of this, but I expect it will add at least a nickel to the price of corn.”

Illinois has six ethanol plants in production now. Archer Daniels Midland has ethanol plants in Decatur and Peoria. Other plants are MGP in Peoria, Aventine in Pekin, Atkins Energy in Lena and Lincoln Land Agri-Energy in Palatine. The last two are farmer-owned co-ops.

Aventine is expanding, and construction is under way on a coal-based plant near Canton and another in the Rochelle area.

“Then there’s a whole other level of plants that are in some stage, whether in the permit phase or still talking about doing a plant,” said Mark Lambert, director of communications with the Illinois Corn Growers Association. “There are at least 30 of those. How many of those actually occur is anyone’s guess.

“We’re playing a new role, assessing how many plants the state can handle and where they should be located. In some cases, we’ve had two different groups wanting to build a plant in the same area, and we’ve helped them join together.”

Iowa leads the nation in ethanol production. Illinois is second, but it is the No. 1 user of ethanol, Lambert said.

“It’s safe to say we were a little slow in developing ethanol plants, but we’re catching up rapidly,” he said. “The initial growth for ethanol plants was in the Plains states – Minnesota, Nebraska and Iowa. They were strong in the Plains states because they didn’t have access to the river and needed a market for their corn.

“We have the luxury in Illinois of having multiple markets. Illinois is the biggest corn exporter, the biggest soybean exporter, and we’re one of the biggest corn processors. We hope to be No. 1 in ethanol production soon.” (source :http://www.sj-r.com)

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