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Minnesota canola crusher creates new delivery option

A new canola crusher at Hallock, Minn., just south of the Canadian border, is operating at full capacity or above and is providing a good opportunity for farmers with canola to sell in both the US and Canada.

The Northstar Agri Industries facility started initial operations in May and was up to full capacity of 1,000 tonnes per day by early June, said company president and COO Neil Juhnke.

After a short outage in early August to check the equipment over and make a few minor adjustments, the facility was restarted in mid-August and has been running at full capacity ever since.

“The facility is running very well,” said Juhnke, noting daily production has surpassed its nameplate capacity on a number of occasions to process 1,200 tonnes per day.

Yields were average in the sourcing area immediately around the plant, but with record acres supplies are more than sufficient to feed the plant, said Juhnke.

The plant at Hallock, about 130 km south of Winnipeg, pulls in canola from about a 145-kilometre radius. While North Dakota and Minnesota production account for the bulk of the canola processed at the plant, Juhnke said Canadian canola was also an important feedstock.

For Canadian growers weighing their delivery options, Juhnke said exemptions in Minnesota law allowing the permitting of triple-Bs and other higher-axle trucks will allow Canadian producers to move canola to the plant efficiently. He encouraged farmers to contact the company for help with the necessary truck and border permits.

Agrifood giant Bunge’s plant at Altona, Man., about 70 km northwest, is the closest competitor for the Minnesota facility, and the introduction of a new buyer in the local market is expected to be supportive for prices overall.

In order to attract Canadian business, the Hallock plant also has a number of agents working on its behalf in Manitoba to develop grower relationships.

Northstar, based at Fargo, N.D., is an arm of Pico Holdings, a California investment firm, which in 2010 put up US$60 million to build the Hallock plant.

Northstar has also locked in deals with Land O’Lakes, in which the dairy co-operative’s feed arm, Land O’Lakes Purina Feed, guarantees the sale of 100 per cent of the plant’s canola oil and canola meal output for five years at "market-based" prices. The feed firm is considered North America’s single largest consumer of protein meal.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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