Plans for a 40 million-gallon ethanol production facility in the City of Monroe were announced two weeks ago. Badger State Ethanol LLC (BSE) made their initial announcement during the City of Monroe Common Council Meeting. The co-founders of BSE, Dr. Gary Kramer and John Malchine also shared their plans directly with WASA members during the annual District Meetings in Whitewater and Dodgeville last week.

"We have completed our evaluation of sites and Monroe is our choice," stated Gary Kramer, President and Co-Founder of BSE. "Our meetings with utility representatives, city staff, and suppliers, indicate that Monroe meets our siting requirements and business goals."

Badger State Ethanol, a start-up LLC, intends to build a corn-based grain, dry-mill manufacturing plant which is expected to produce 40 million gallons annually of denatured fuel grade ethanol, 128,574 tons of dried distiller grains and 112,200 tons of CO₂. The company estimates that it will require 14.3 million bushels of corn to produce these products. The $60 million project will include construction of the production plant and support structures, major improvements to the rail system, and other infrastructure improvements. According to BSE, approximately 41 skilled and semi-skilled positions will be created by the project directly.

In order to move the project forward, the 40 acre proposed site, located off Bethal Road, on the southwest side of Monroe, must be annexed to the City and the City's Tax Increment Financing District amended. In addition, there are several infrastructure requirements. This project will rely heavily on rail, both for corn receiving and for product distribution. It is expected that the majority of corn will arrive at the site via rail, although nearby corn will arrive by truck. The proposed site is located at the end of a rail line currently operated by the Wisconsin and Southern Railroad. Significant on-site and off-site rail improvements are planned. The City intends to work with the Wisconsin Departments of Commerce and Transportation to secure grants to complete the infrastructure improvements including a state transportation grant that would help build a $1.2 million railroad spur to the plant site.

"Monroe has really worked hard to provide us with the information we needed to make our decision," said John Malchine, Vice-President and Co-Founder of BSE. "We are committed to making this a profitable plant and a long term asset to the city and the region."

The construction of the facility will be on an approximate 14-month time schedule. Upon securing building and environmental permits, BSE hopes to break ground no later than April 2001.

We want to point out a possible shift in priorities with regard to OSHA inspections of grain handling facilities in Wisconsin, that you need to be aware of. The change is that OSHA appears to be stepping up the pace of these inspections in Wisconsin quite a bit. In the past ten years, there were a total of nine OSHA inspections of Wisconsin grain elevators (as compared to 1006 nationwide). Since April of this year, there have been at least two grain handling facility inspections in Wisconsin (both of which were initiated by an employee complaint). At this rate, OSHA will have conducted eight inspections this year alone. If you were betting on not getting an OSHA inspection anytime soon, it looks like the odds just moved against you.

The United Soybean Board (USB) has notified state soybean boards that checkoff payments deemed to be "late" must be charged late fees. The state Qualified State Soybean Boards (QSSB), of which the Wisconsin Soybean Marketing Board is one, must comply with the order so that they retain their "qualified" status. A "qualified" state board means the state QSSB transfers half of their total checkoff dollars to the USB and retains the other half for promotion activities at the state’s discretion. If a state is not "qualified," the entire checkoff collection for that state is transferred to USB. Obviously, it is in the QSSB’s best interest to comply with USB directives.

The USB’s definition of "late" is when the bank has not received the payment by the 15th of the month immediately following the period in which the fees were collected, whether that be monthly or quarterly. The late fee will be a 2% surcharge to be added to the late payment.

This presents a problem because according to various state soybean boards, the USB is trying to "fix something that ain’t broke." The level of late remittals is believed to be so small the 2% surcharge will be eaten up by additional administrative fees that will be imposed by the bank to cover the additional monitoring required. Even though it makes no sense, the state board’s hands are tied and they must comply with the mandate.

Here in Wisconsin, the state soybean marketing board plans on monitoring late remittals until January 2001 to get a full quarter’s worth of history. Late fee surcharges would then begin appearing starting sometime after that date. A point of clarification; postmarked remittals on the 15^th don’t count, the deposit has to be received by the association’s bank prior to the close of business on the 15^th to not be counted as late. And if the 15^th is on a weekend, the due date rolls backward to the first prior business day.

A Drug and Alcohol Consortium member who had had a driver involved in a fatal accident recently contacted WASA staff. It appears that the other motorist veered from their lane, drove across a median and struck the member’s truck head-on. The motorist was killed and the truck driver sustained minor injuries that necessitated a trip to the hospital. Federal Motor Carrier Safety Regulations (Part 382.303), essentially require any CDL holder that is involved in a fatal accident, whether they were at fault or not, to take an alcohol test within 8 hours of the accident and a drug test within 32 hours of the accident. The officer on the scene did not tell the driver he needed to have both a drug and alcohol test in accordance with federal law, and the driver either didn’t know better or simply was too "shook" to have remembered. As WASA staff found out about the accident over 24 hours after it happened, we were only able to get the driver in for his required drug test before the time limit expired, as the 8 hour alcohol testing limit had already passed.

We have asked the investigating officer to ensure that a notation is on the accident report indicating that the trooper did not believe the driver was impaired at the time of the accident and accordingly did not require a blood alcohol test to be taken. While this does not relieve the company from their failure to have the test done, it can be helpful in explaining why it happened. Even though the officer on the scene doesn’t tell the driver that he or she needs to be tested, it is your responsibility, as the employer, to have all required tests done within the specified time periods.

WASA is also working with state patrol headquarters to have a "CDL holder check list" included in their accident investigation "crash packet", which could be given to a driver in the event of a crash to clarify what he or she should do to be in compliance with federal law.

 Proposed "Model" Legislation

The Iowa Attorney General’s (AG) office is proposing legislation that is designed to "protect" producers who produce on contract. Both the Minnesota and Wisconsin AG’s offices have endorsed the Iowa legislation as a model for their respective states. The reason for the legislation is a fear on the part of the various AG’s offices that consolidation in agriculture has led to great power concentrated in the hands of fewer and fewer processors and retailers. Their answer to this perceived problem is to propose legislation that puts an oversight capability in the hands of the state AG’s office. The Iowa legislation is primarily in response to a major hog buyer leaving the state while the company’s contract producers were left with capital investments of little value. The Iowa law was initially thought to cover only livestock contractors, but has been written to include grain and seed production. It has been written so broadly and vaguely that any standard grain handler forward contract could be included. And that’s why you need to know about this.

The model legislation has the following key components:

• require contracts in plain language and contain disclosure of material risks.
• provide contract producers with a three-day right-to-review/cancellation policy.
• prohibit confidentiality clauses in contracts.
• provide producers with a first-priority lien for payments due under the contract.
• protect producers from having contracts terminated without cause if the producer has already made a sizable capital investment as required by the contract.
• make it an unfair (illegal) practice for processors or buyers who discriminate or retaliate against producers who exercise their rights, such as the right to join a producer organization.

Some of the components listed above such as the anti-discrimination policy and the "plain language" aspects are acceptable on their face. But others would make grain purchasing all but impossible. Can you imagine trying to top-off a barge with a quick-ship bid and a seller then holding you hostage while he considers the three-day "review" policy? Can you imagine any contract being "reviewed" and cancelled when price drops? Or might that only happen when price happens to rally during that three-day period? As for "transparency of contract prices," what is the value unless there is reporting? And if it’s reported, it’s public record and available to everyone. This isn’t simply giving producers the ability to speak with their bankers and attorneys, it’s the first step in mandatory price reporting of all ag sales. We also wonder what the ag lenders will say about subordinating their first priority status and what that will mean to your ability to secure operating credit.

We have no doubt that unscrupulous practices sometimes do occur. The proper avenue to address these issues is through the court system rather than broad based laws that changes an entire industry and possibly speeds the very consolidation the law was trying to address.