Producers at Colorado Farm Show look to emerging markets to increase their profitability
January 25, 2017
Low commodity and livestock prices have prompted producers to look for new markets.
That's what drove them to the Emerging Markets panel discussion at the Colorado Farm Show on Tuesday afternoon.
Producers had a lot of questions for panelists Ed Lehrburger, president and CEO of PureVision Technology Inc. in Fort Lupton, Colo., and Jeremy Kempter, of Old Town Distilling Co. in Fort Collins, Colo.
Both have enterprises that turn ag commodities into value-added products.
PureVision has a patented continuous countercurrent reactor or CCR to convert ag residue, such as hay, straw and corn stover into three products — pulp, a sugar-rich liquid and lignin. The pulp is used to make paper products, the lignin, which is in powder form, can be made into industrial products including plastics and specialty chemicals. The sugar-rich lignin can be further processed to make sweeteners, beverages and plastics.
Lehrburger said he was recently in a South Carolina meeting with a group of tobacco growers who were interested in growing hemp.
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"In the heart of tobacco country, a lot of the farmers who have done really well are now struggling," he said.
After going through bench-scale and pilot-scale studies, Lehrburger said PureVision's next step is to refine biomass on a commercial scale.
The refinery would require about 500 tons of biomass a day, which equates to about 10,000 acres.
Many in the audience were curious about what the company would pay them for their crop residue. Lehrburger was reluctant to give them a figure because, like other ag commodities, the price would be impacted by commodity prices, supply and demand and the weather.
PureVision is not looking to build a refinery, he said, those in the company hope to get investors to build refineries, which has been difficult.
"This has never been done before and to find investors is difficult," he said.
PureVision has a subsidiary called PureHemp Technology LLC which also provides opportunities for producers, according to Lehrburger. PureHemp refines hemp into paper products, body oils, lotions and other products.
Although the audience was interested in the hemp process they were leery of producing the crop that is legal in Colorado and 32 other states but still considered illegal under the Drug Enforcement Administration, and therefore by the federal government. There is no formal law in place banning hemp, but the DEA has regulations against it.
One audience member said the Natural Resources Conservation Service and the Farm Service Agency have said farmers who grow hemp would lose their access to federal loans and programs.
Lehrburger said his lawyer has sued the DEA.
"They definitely overstepped their bounds," he said. "We have been advised to ignore the regulations until it is passed by Congress. Regardless of what the DEA does, we are going to continue to make our products."
Lehrburger said PureHemp has processed hemp for three years without any problems. In those three years the acreage has grown to 3,000 in 2016 and he expects it will grow again this year.
Kempter, of Old Town Distilling, expects craft distilling will follow the same trend as craft brewing, which has exploded across the country. "Craft distilling is what craft brewing was in the 1980s," he said.
Old Town Distilling produces organic spirits, including vodka, gin, whiskey and bourbon.
Kempter started in 2014 trying different recipes and, during that process, found using organic grains made his products taste better.
They started out buying organic rye from Germany at $1.20 a pound because there were no local producers.
"Then we found a farmer in Johnstown (Colo.) who grew organic rye and we were able to purchase 50,000 pounds for 32 cents a pound," he said.
Kempter said his use of organic grains is a selling point and it allows him to charge more for his spirits. He said a bottle of his organic product that sells for $59 would be priced at $45 using nonorganic grains. And, he said you could drink a lot of his organic spirits and not get a hangover.
Although the lure of being organic helps, it can also be a hindrance because it is somewhat limiting when they are looking for suppliers.
"There is a little more labor involved but you get a better price," he said.
Growers also need to be organic certified and may have go make some adjustments to their equipment.
"But the expense is outweighed by the premium price they can get for their product," he said.
Like Lehrburger, Kempter said finding investors is tough but he expects that to change.
" I think it is going to be a pretty robust industry," he said.