EFFINGHAM, Ill. — A newly opened feed mill will have the dual effect of bringing new pork producers to the area and increasing corn and soybean prices in central Illinois.
The Equity, a farm cooperative based here, recently started operating Horace Feed Mill in Edgar County, at the site of a small grain elevator purchased in 2016.
It is designed at full capacity to produce 450,000 tons of swine feed annually, which would feed 1.35 million market pigs.
“We’re obviously not there yet,” said Darwin Wohltman, vice president of feed and livestock for the co-op. “We’re not going to hit it right away. We hope to be up to capacity in 3 to 5 years. There’s a lot that’s got to happen between now and then.”
At full capacity, the mill will use 6.4 million bushels of corn and the equivalent of 2.7 bushels of soybean each year.
It would be difficult to overstate the impact the mill could have on the region. Roger Sy, a member of the Illinois Corn Marketing Board who farms in nearby Douglas County, said the region is abuzz.
“We’re really excited to have something like this come to this area,” Sy said. “We haven’t seen anything like this for years.”
The presence of the mill will likely increase pork production in east-central Illinois, according to Wohltman.
“We’re trying to promote more pork operations in Illinois as a way to diversify farm income,” he said. “More manure for the crops, for a year like this, would be huge. We’re trying to offer contracts for people to put up hog barns that would be tied to the feed mill and complete the cycle. Bring the corn in, feed it to the pigs, and put the barns up.”
Wohltman added that the nation’s packing industry has increased by 11 million shackle spaces annually in recent years, creating the need for more feed in the eastern and western Corn Belt.
“If you’re a farmer, it’s got to be positive,” he said. “We’re also adding some more grain storage to that facility as well. It had 1.3 to 1.4 million bushels capacity. We’re up to about 4 million bushels, plus more storage in the works.”
Sy noted that the mill will bring needed competition. Until recently, Archers Daniels Midland and Cargill had the only commercial elevators in the region, and many of those facilities had closed.
“Where we take our grain is getting fewer and further between,” he said. “This is having an effect on 32,000 acres of beans and 45,000 acres of corn for our area; that’s huge. All these elevators have closed up. This will give us a huge boost as far as places to take our corn, and for competition.”
He believes the mill could have a major effect on grain prices, with the caveat that international trade negotiations will also factor into the price.
“It’s definitely going to have some effect, but getting the NAFTA situation figured out and the tariffs with China will have an overall bigger effect for all of us,” he said.
“In the near term, especially with a lot of the storms we’ve had in the past few weeks, they feed a lot of corn down there in the Carolinas. They’re still going to need to feed those animals. That’s going to have a huge effect. I think we could see 30 to 40 cents (per bushel higher corn prices) pretty easy.
“That’s big, especially when just a week or so ago corn had a two in front of it. There were some pretty sad faces around the local restaurants.”