By Dan Rahn
University of Georgia
"This was one of the major steps we needed to take," said Billy Wayne Sellers, president of the year-old co-op.
The FOC site selection committee had narrowed a broad field of potential sites for the $55 million plant to four: Claxton, Baxley, Alamo and Cordele. While all four had much to offer, the deal-clincher came down to taxes.
Tax advantage
"The biggest thing was their low millage rate," Sellers said.Rail and interstate highway connections figured into the decision, too. "They had a good package," he said.
Randy Mayfield, who chairs the Evans County Industrial Development Authority, said the oilseed crushing facility will be an important new employer for the community.
"We're pretty excited about it," he said. The plant would employ 60 people, with 50 of those from the local area.
"We've got three or four companies that employ that many, other than the school system and state government," he said. "So it's a pretty big thing to us. The payroll will be pretty good, too. These will be semiskilled and skilled jobs."
Good site
The 80-acre Evans County site itself had a lot to offer. "The property doesn't need much developing," Mayfield said. "It's pretty flat and level, with no wetlands and no trees. It should allow for some quick site preparation."The plant will crush soybeans, canola and possibly some peanuts and sunflower seed for oils and other products.
Ultimately, Sellers said, the primary crop for the crusher will be canola. University of Georgia experts have long said the winter crop has great profit potential in Georgia. But with the nearest markets in Canada, farmers have grown little of it thus far.
Proven concept
The concept behind the co-op has proven itself often in the Midwest, said UGA agricultural economist George Shumaker.With market prices at $5 per bushel, farmers who were FOC shareholders could get about 80 cents more for soybeans and $2.40 more for canola by marketing through the co-op, Shumaker said.
But selling production shares to farmers, in tough economic times, is still the biggest hurdle the co-op must clear.
To build the plant and begin operations, Shumaker said, FOC will need 750 to 800 shareholders with average commitments of 275 acres to the co-op. Minimum investments will be 1,500 shares at $2.25 per share.
Stock sales
Sellers said the co-op will be working hard to begin stock sales as quickly as possible. "We hope to finish the legal work and start selling stock in the next couple of months," he said.The FOC will sell two types of shares. Class A shares will be production stock for farmers, committing them to grow oilseed crops for the co-op and committing the co-op to buy from the farmers.
Class B shares will be offered to investors, he said. The board decided to offer these shares to help raise the startup costs -- primarily for the plant construction.
Critical shares
"These shares could be very helpful, but the production shares are the ones we've got to sell," Sellers said. "We could have $100 million laying in the bank, but if we don't have the crops committed to run the plant, we don't have anything."Sellers said he believes farmers will buy into it. "It offers them a way of increasing profits for their oilseed crops," he said. "It's cutting out the middle man."
The biggest challenge for the co-op, he said, is to "get farmers to look closely at this and see if buying stock and becoming a part of the co-op is for them."
