Green Plains looks at the future of adding value to corn through more than ethanol
Green Plains Inc., of Omaha, Nebraska, is a company that markets corn ethanol coproducts and is investing hundreds of millions of dollars into equipment bolt-ons at their own ethanol plants.
OMAHA, Neb. — Green Plains Inc. — a company that has made its mark in ethanol — is innovating new, non-fuel ways to add value to corn, including fish food.
The Omaha, Nebraska-based company — with important connections in Minnesota, North Dakota and Iowa — has been around 18 years and is working on a future producing new protein, yeast, fiber and oil out of a corn kernel.
Ethanol is their bread and butter, but increasingly in food and feed ingredients, renewable corn oil, clean sugar and carbon capture are a part of the puzzle.
Green Plains plans to spend $400 million to $500 million to make these changes, said Todd Becker, chief executive officer. And they’re just getting started.
“We’re going the furthest, the fastest,” among competitors, said Becker in a recent interview with Agweek. Green Plains has nearly 1,000 employees. It has a market capitalization (shares times share price) of close to $2 billion, and $2.5 billion to $3 billion in revenues annually.
The publicly-traded company (NASDAQ: GPRE ) owns 11 biorefineries — the term they prefer to call ethanol plants — producing about 1 billion gallons per year and ranking as fourth largest in the country (and world). The company also is the controlling partner in Green Plains Partners LP, which provides ethanol and fuel storage, and terminal and transportation services.
There’s a lot going on here.
One of ethanol’s challenges has been market volatility, Becker said.
“When we walk into any given year, we don’t know what ethanol is going to do (revenue-wise). We don’t have a forward marketing strategy,” Becker said.
The Omaha-based company has floors full of people who “manage margins” on corn, ethanol, natural gas, distillers grains and corn oil. But Becker would like to move from a world of “non-recurring, volatile and unpredictable cash flows” — to one with “predictable, recurring, growing and non-volatile cash flows.”
Becker sees these new products as — not a diversification but a “natural extension of our asset base.”
Green Plains is delivering what it calls “ultra-high protein and novel ingredients for animal and aquaculture diets.” Meanwhile it is shifting toward “de-carboning” their ethanol, a strategy amplified by federal policies, especially the Inflation Reduction Act of 2022 , he said. Whatever farmers think about carbon dioxide pollution and greenhouse gas policies, Becker said, they are favorable to ethanol and to the farmers who produce for them.
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“It’s valuable to decarbonize your ethanol plant. No. 1 it’s valuable from the government standpoint,” he said. “Ultimately it creates a low-carbon fuel, which doesn’t exist today: I’m talking potentially zero-carbon.”
In the past two years the company has embraced Environmental Social Governance standards.
From 2018 to 2021, the company estimates it cut its own “operational greenhouse gas emissions” by 35% — 3.5 million metric tons of carbon dioxide, down from 5.5 million metric tons in 2018. Looking ahead, Green Plains announced its intentions to cut carbon emissions by a whopping 50% by 2030 and reach carbon neutrality by 2050.
Shifting with opportunity
Green Plains was founded in 2004 and started out with grain elevators and ethanol plants.
In May 2007, Becker, now 57, came on as CEO.
Becker grew up in a northwest suburb of Chicago and — the first in his family to go to college — used a Pell Grant to go to the University of Kansas in Lawrence. Aspiring to a career in grain trading, Becker went on to Indiana University where he acquired degrees in business administration and management and a master of science in finance. Much of Becker’s early career was at ConAgra, which is based in Omaha.
Just prior to coming to Green Plains, Becker worked for Global Ethanol — a start-up in Minneapolis that was a maker and seller of ethanol. In October 2010, Global Ethanol merged into Green Plains. In 2012, Green Plains sold a dozen grain elevators it owned, totaling 32.6 million bushels of storage in northwest Iowa and western Tennessee. It also scaled back from owning 17 ethanol plants to owning 11.
Green Plains, through its own plants, processes 260 million to 300 million bushels of corn annually and produces 750 million to 1 billion gallons of ethanol.
The biorefineries are located in Minnesota (Fergus Falls and Fairmont); Iowa (Superior and Shenandoah); Nebraska (Central City, Wood River and York); and Illinois, Indiana and Tennessee. It markets and distributes its own ethanol, but part of its business is marketing for third-party ethanol producers (including Tharaldson Ethanol LLC at Casselton, North Dakota).
‘Fluid Quip’ flip
In 2021, Green Plains became majority owner of Fluid Quip Technologies MSC ("Maximized Stillage Co-Products”) based in Cedar Rapids, Iowa.
“They had a back-end separation process,” Becker said, “technology that allows us to start to grab some of those higher values left in a kernel of corn that we were selling at a lower value.”
Fluid Quip has a “clean sugar technology,” for taking corn starch and turning it into dextrose and glucose. They also “unlock oil,” because renewable diesel has higher value.
Corn "wet mills" already do some of this — making corn gluten meal and other products. But Becker said “dry mills,” more typical for ethanol plants, also can produce the products, at competitive price.
In June 2021, Green Plains announced that Fagen Inc., of Granite Falls, Minnesota, would be the exclusive general contractor to install the Fluid Quip Technologies MSC, and that it would sell this technology to other partners, (including Tharaldson.)
The technology allows the company to achieve 50% protein concentrations through “mechanical separation,” with trials achieving 60% concentrations. The company will meet a “variety of standards” for customers, including the Sustainability Accounting Standards Board and United Nations’ Sustainable Development Goals.
Ethanol’s big role
“Ethanol, in my opinion, has been the modern-day farm policy. Without ethanol, we would be overproducing corn in the United States,” Becker said. “We would not have enough demand for it. The largest single source for any single-commodity demand, anywhere in agriculture, is the U.S. ethanol — 5 billion bushels of corn.”
That said, the industry must de-carbonize; it’s a mistake for farmers to be against it, he said. He underlines that it is a mistake to protest the Summit pipeline that plans to take carbon dioxide to North Dakota, to be piped deep into the earth and sequestered. (He acknowledges Green Plains is one of the largest investors and shippers for that project.)
This is because a bigger issue for ethanol is competing with the idea of “electric vehicles,” which he said are largely “coal-based vehicles,” because that’s what fires the power plants. Low-carbon ethanol “is the single-most important opportunity for the U.S. farmer that there is, so we remain competitive a lot longer as the world starts to fight between low-carbon fuels and electrification.”
Meanwhile, Green Plains will work on the new products.
“I think that what we’re doing is really good for the U.S. farm economy,” Becker said.