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ADM plans for new biodiesel plant, adds Act of God clause

Four Archer Daniels Midland (ADM) oilseed crushing plants in Saskatchewan, Manitoba and North Dakota have added “Act of God” coverage on farmer contracts for high-oleic Nexera canola in 2012. To qualify for the premiums and coverage, farmers must first sign the contract and then buy the Nexera canola seed from a “specified local seed retailer,” says ADM. Farmers’ contracted production is then covered 100 per cent with multiplepricing options, including a base contract with coverage “dependent upon the region.” These contracts will be offered at plants in Watson, Sask., Carberry, Man., Velva, N.D., and Enderlin, N.D.

ADM plans to build a 265- million-litre capacity plant next door to its canola crushing plant at Lloydminster, Alta. Construction is expected to start next spring for completion in the fourth quarter of 2013. In March 2011 ADM announced plans to add five more storage bins at the Lloydminster site, doubling its storage capacity to 100,000 tonnes, and to add a second receiving system with additional conveyors and other equipment.

The new plant is expected to increase ADM’s own North American biodiesel production capacity by 50 per cent, and to help Canada fulfill its mandate for renewable diesel fuel. A mandatory minimum took effect in July requiring two per cent biodiesel in all diesel sold in Canada.

“A robust Canadian biodiesel industry diversifies the fuel supply, provides environmental benefits and fosters increased local demand for canola, which creates value for rural communities,” says J.P. Montalvo, commercial manager at ADM’s Lloydminster facility. †

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