A pioneer in Minnesota's ethanol industry celebrates 25 years
The Chippewa Valley Ethanol Company began operations 25 years ago as among the first ethanol plants in Minnesota. It was launched as a pioneer of the Minnesota model: A farmer-owned cooperative producing value added earnings for corn growers.
BENSON , Minn. — Richard Syverson remembers when a good year raising corn in the 1990s was one when you were able to pay your bills.
It’s why he and his wife, Vicki, borrowed against a life insurance policy to purchase shares in the Chippewa Valley Ethanol Company . Syverson said they knew the risk, but felt that the cooperative’s founders — among them area farmer John Carruth and Ray Millet with the Agralite Cooperative, and Jan Lundebrek, a banker — had laid out a good path.
“The right people came together at the right time,” said Syverson.
This is now the time for the company to celebrate. One of the state’s very first ethanol plants is marking its 25th anniversary Monday.
The plant was a pioneer of the Minnesota model for this emerging industry as a farmer-owned cooperative producing value-added earnings for corn growers.
David Thompson, current chairman of its board of directors, admits he scratched his head and wondered about the risk he was taking when investing in Chippewa Valley Ethanol Company .
But the risk proved worthwhile: “The shareholders have done very well,” said Thompson of the performance through the years.
The cooperative counts more than 900 shareholders, most of them raising corn within a 35- to 40-mile radius of Benson.
Along with the return on investment, the plant has benefited farmers in the region by its demand for corn. Ethanol plants generally provide a nickel to 10 cents a bushel of benefit to local market prices.
Probably most importantly, the plant is adding value to corn that would otherwise be shipped by rail to international markets, where its full value is lost, according to Syverson. Along with the ethanol for fuel, the plant is producing corn oils and distillers grains. Almost one-half of the distillers grains are sold to livestock producers in the area, and the remainder shipped by rail to more distant markets, according to Chad Friese, general manager of the plant.
The Benson facility originally opened with the capacity to produce 15 million gallons of ethanol a year. Today, it’s producing more than 50 million gallons a year. It has reduced the energy needed to produce the fuel by 36 percent since its start. It has achieved a comparable or greater percent reduction in the amount of water needed per gallon of fuel, according to Friese.
This plant is best known for its diversity of products. Early on, it began producing industrial alcohol as part of its product stream and invested to distill alcohol for spirits. It’s been celebrated nationally as the producer of vodka products over the years including Shakers, Prairie Organic and, most recently, Gray Duck .
The production of “higher” alcohols has represented about 20 percent of the plant’s production, perhaps as much as 30 percent in the past year, according to the general manager.
The plant has a staff of 52, a larger number than most plants of its size due to its diversified product mix. Scott Tostenson, project manager, is among four employees who have been with the plant since its opening in early 1996. Tostenson said it was challenging at the start: For the first 30 days straight, he worked 12-hour shifts, seven days a week.
Employees have stuck with it. Friese said employee turnover today is 85 percent related to retirement.
“I just love walking in the door in this office,” said Syverson. “It’s one of the friendliest places to do business in the area,” he said of Chippewa Valley Ethanol Company. He credits it to a “great environment” from the staff to the board of directors.
Syverson and Thompson believe the overall community has benefited by the success of ethanol in Minnesota. “What would our towns look like, our schools, without the dollars brought back by it?” he asked.
Friese said demand for ethanol in Minnesota is strong now that travel has rebounded from the pandemic. He believes the industry could see growth in demand if it successfully promotes a higher blend rate. Currently, the national inclusion rate for ethanol is 10.3 percent to 10.4 percent, he said, but the infrastructure exists in most of the country for an E-15 blend.