By Roger McKinney
rmckinney@joplinglobe.com
NEVADA, Mo. — Vernon County soybean farmer Gilbert Willson said Thursday that he’s completely in the dark about the financial health of Prairie Pride.
The $90 million plant that produces biodiesel from soybeans was effectively taken over by the Missouri Department of Agriculture, which suspended Prairie Pride’s grain dealer license. That action was announced Wednesday by the state agency.
The department was named trustee of the Prairie Pride plant in an action approved Wednesday in Vernon County Circuit Court.
More than 1,000 area farmer-investors committed at least $20,000 each to the plant’s construction during 100 equity-drive meetings held around the region several years ago.
“I know everything has worked against the company since it started,” Willson said, citing among other things petroleum prices, which were at record levels of around $150 per barrel when the plant opened.
Jon Hagler, director of the Missouri Department of Agriculture, said legal action was necessary to ensure that grain producers get paid.
“We got an alert from Prairie Pride that they had obligations that wouldn’t be met,” Hagler said Thursday. “We’ve taken possession of the grain-related assets. We’re working closely with the board and the management.
“The first stage is to protect farmers that have sold product to make sure they’re paid. The second stage is for Prairie Pride to work with new financial partners to get back on sound financial footing.”
According to court documents, Prairie Pride owes more than $2.4 million in grain payables, and company officials contacted the state department on Feb. 19 and said they were unable to meet those obligations.
Prairie Pride’s grain dealer bond on file with the state totaled $300,000.
The takeover allows the Missouri Department of Agriculture to liquidate the company’s grain-related assets. Suspension of Prairie Pride’s grain dealer license prohibits the company from engaging in any grain-related business transactions. The company’s bank accounts pertaining to grain dealing also are under the control of the Agriculture Department.
Company position
No one at Prairie Pride responded to Globe questions Thursday, but there was a statement on the company’s Web site.
“Prairie Pride is not currently receiving soybeans or contracting, delivering or shipping meal, pellets, soybeans and oil,” the statement reads.
It also notes that Tenaska, a biofuels marketer based in Nebraska, has not paid for soybeans that were delivered to the plant east of Nevada from Feb. 12-15. Prairie Pride and Tenaska signed an agreement in August under which Tenaska BioFuels would provide funding to purchase soybeans, according to a statement issued by both companies.
Officials with Tenaska could not be reached late Thursday.
“As a result, in order to protect producers and elevators, we stopped receiving soybeans on Feb. 16,” read Prairie Pride’s statement. “We are working closely with Missouri Department of Agriculture to resolve outstanding issues.”
Company officials also said in a statement faxed to the Globe on Thursday that their industry has been hurt by the loss of federal biodiesel tax incentives.
“Some members of our senior management and some of our directors are currently on the East Coast working on a resolution,” according to the statement.
Hagler, the state agriculture director, said he didn’t think nonrenewal of the federal tax incentive contributed to Prairie Pride’s current problems. He said some form of tax credit is expected to be renewed.
The plant opened to fanfare in August 2008. Officials at the time said it employed 48 workers and would convert 21 million gallons of local soybeans a year into 30 million gallons of biodiesel fuel. Officials said the plant was 100 percent producer-owned and was the first in the nation with more than 1,000 investors. A $52 million loan as well as federal and state grants paid for much of the plant.
Hagler said that after the farmers are paid, the next step is up to Prairie Pride officials.
“We want to make sure we get obligations met,” Hagler said. “Hopefully, they’ll be able to make some arrangements financially to get themselves on sound footing.”
Missouri law
The Missouri Department of Agriculture took the action regarding Prairie Pride Inc. under the authority granted it by the Missouri Grain Dealer Law.
