Keeping It Local Retaining the profits of one of Michigan’s biggest staple crops
Soybeans have long been a staple of Michigan’s agricultural economy. After being harvested, most of the crop is packed up and shipped out for processing out of state. But the Great Lakes State will soon transition into a one-stop shop for harvesting and processing soybeans, keeping both profits and jobs in the mid-Michigan region.
That’s in the wake of this year’s announcement that Michigan-based Zeeland Farm Services Inc. (ZFS) will build a $129 million processing facility in Ithaca, north of Lansing. Set to open no later than 2019, the facility will be able to process more than 40 million bushels of soybeans annually — four times the amount of soybeans processed in all of Michigan right now, according to ZFS and the Michigan Economic Development Corporation (MEDC).
“We are not building and sizing the facility for today, but for tomorrow. This is a long-term, 40- or 50-year investment in Michigan agriculture,” said Cliff Meeuwsen, president of ZFS, in a prepared statement. “We are building a legacy plant that will fulfill all of Michigan’s soybean processing needs for decades.”
The plant is expected to create 75 full-time jobs and around 150 construction jobs according to ZFS and regional development officials; the benefits of the plant are expected to go well beyond its 435-acre footprint.
“It’s not simply Ithaca and Gratiot County … it’s the entire central area of the state,” said Don Schurr, who just recently retired as president of Greater Gratiot Development Inc. on Oct. 1. “It’ll be six, eight counties around us that will see a direct benefit.”
“It’s a significant production facility and … between what they’re doing in Zeeland and what they’re doing here, they’re going to essentially take 80 percent of the soy product growing in Michigan currently and convert it into value-added products,” Schurr said.
That means farmers will be able to pocket costs that are now going to ship soybeans out of state for processing.
“That’s huge for Michigan and for the farmers and the producers who are supplying the soybeans. It’s going to substantially add to the basis price of soybeans, so then you can have 20- to 30-cent increases in the basis price, and we spread that across the number of family-owned farms in Michigan that will be supplying the beans — that is a very significant increase in revenue, coming now at a time when farming products have not had the best prices,” Schurr said. “That is certainly going to be a welcome addition to Michigan.”
Michigan ranks 12th in the nation among states in soybean production, making it the state’s top agricultural export with around 12,000 farmers harvesting more than 2 million acres of soybeans per year and creating approximately $1.67 billion in economic activity, according to the MEDC.
“This project really takes the transportation costs out of a lot of the growing and supplying [of] the beans, so take that cost right out of it and everybody benefits,” Schurr said.
The impact will have a substantial impact in Ithaca as well. The aforementioned 75 jobs means 75 people added to the employment base. Jobs will include everything from skilled to semi-skilled jobs.
“It’ll be grain-handling, moving of grain within, loading and unloading. There will be processing and manufacturing jobs for making the soy oil and related byproducts,” said Schurr. “There will be some logistics-oriented jobs for moving finished product and the truck drivers and related mechanical jobs that will go along with that. Those are all anticipated.”
The wage range is not known now, but Schurr does expect it at a certain level of competitiveness.
“It’s a little early in the game to talk about hiring and when,” Schurr said. “We have about a year or so of pretty serious construction that’s going on.”
Ithaca City Manager Chris Yonker said ZFS chose the site in part due to its proximity to U.S. Route 127 — in fact, improvements to U.S. 127 are included in the plans — as well as access to existing adjacent rail lines, its central location in the state and other incentives, including a $12.2 million Brownfield Redevelopment Act tax incentive.
“The processing plant is a win for everyone involved, including farmers of soybeans, livestock, poultry and aquaculture,” Michigan Soybean Promotion Committee Executive Director Gail Frahm said in a statement.
As of now, it’s difficult to say what ancillary business growth will take root around the plant, but Schurr is confident something is due.
“There will be growth. I think we all understand that. A lot of the very direct benefit will come from the individual producers who are going to supply the product,” Schurr said. “So, there are going to be very dispersed benefits and very ground-up” benefits.
ZFS, headquartered in Zeeland, Mich., is the state’s only soy processor and vegetable oil refiner. The family-owned business first opened in 1950 and currently employs more than 425 people.
“We’re so happy it’s a Michigan-based company that’s located and growing and improving more Michigan opportunities. You don’t get many projects like this,” Schurr said. “This is just really, really nice for us. Very proud to be able to be a part of it.”
For more information on ZFS and the Ithaca plant, visit zfsinc.com.