JOPLIN — Missouri agriculture officials have effectively taken over and suspended the grain dealer license of a western Missouri biodiesel plant.
Missouri Agriculture Department Director Jon Hagler said the state intervened to ensure farmers were paid for the soybeans sold to the Prairie Pride biodiesel plant just east of Nevada, Mo. He said after farmers have been paid, the next step is for the biodiesel plant to work with new partners to improve its financial footing.
"We got an alert from Prairie Pride that they had obligations that wouldn't be met," Hagler said. "We've taken possession of the grain-related assets. We're working closely with the board and the management."
The state Agriculture Department was made a trustee for the plant by a Vernon County court. Agriculture officials have authority to sell off any of Prairie Pride's grain-related assets, and the suspension bars the plant from any grain-related transactions. State officials also now control company bank accounts related to grain deals.
The Joplin Globe reported that Prairie Pride owes more than $2.4 million for grain and that the company warned officials it would not be able to pay that.
Prairie Pride said it stopped receiving soybeans on Feb. 16 to protect producers and elevators. The company said an agreement reached last August called for Nebraska-based Tenaska BioFuels to pay for the soybeans going to the Nevada, Mo., plant. In a statement issued by Tenaska and Prairie Pride, the companies said soybeans delivered to the biodiesel plant from Feb. 12 through Feb. 15 had not been paid for.
Prairie Pride officials said the biofuels industry had been hampered by the loss of federal biodiesel tax incentives. Company officials currently are looking for a solution.
The $90 million biodiesel plant opened in August 2008 and planned to employ 48 people to produce 30 million gallons of biodiesel per year. More than 1,000 farmers invested, and company officials took out a $52 million loan and received state and federal grants. Individuals were required to invest at least $20,000.
Across the country, ethanol and biodiesel plants have run into financial difficulties after an explosive interest in biofuels and a rush to build plants. But credit tightened as the nation's economy soured, and prices for corn, soybeans and other supplies increased.
Gilbert Willson, a soybean farmer in Vernon County, said the Prairie Pride plant ran into bad luck, noting that oil prices were at record highs when it opened.
"I know everything has worked against the company since it started," he said.