ENID, Okla. — Canola acres are all that is holding up construction of a canola processing plant in Enid.
“We’re the poster child for a shovel-ready project,” Northstar Agri Industries President Neil Juhnke said. “We’re happy to be in that position. We’re, unfortunately, disappointed by last year’s drought.”
Juhnke noted 50 percent of regional farmers lost crops to the drought.
“When that happens, everybody involved in a project like ours just needs to take a deep breath and let things get back to normal, and move forward when the time is right,” he said.
Land for the plant was purchased in April 2014. The 400 acres are on the east side of Enid, between 66th and 78th — with Willow to the north and the BNSF Railway main line to the south — about a mile north of U.S. 412.
Juhnke said Oklahoma Department of Environmental Quality has issued the proper environmental permits needed to support the project, and the railroad has agreed to the needed rail service.
The plant has been designed, and local zoning and permitting is done, he said.
But the plant will require between 750,000 and 1 million acres of canola to support it.
“If we turn the clock back two years, we saw canola acres double from 2011 to ’12,” Juhnke said.
In 2013, acres planted in canola grew again, but the drought severely impacted the crop and set the acreage growth back, he said.
“This year, the regional acres in Texas, Oklahoma and Kansas were set back a little bit from below what they were in 2013. So, we need to see this crop and how it does, and how the farmers in the region respond. We’re hoping to see that acreage growth trend take off again next fall,” Juhnke said. “When we have a reasonable assurance that the acres are going to be there to support the plant, we will start construction.”
He said the company is supportive of Oklahoma’s farmers.
“We want to be a part of the value chain to add value to their on-farm production, and we think canola’s a very important part of that,” he said.
Juhnke said, based on success in other areas of world, winter canola can be an excellent crop in the region.
“It just takes time, especially when there’s occasional setbacks. It just takes time to shepherd a crop and its growth cycle,” Juhnke said.
The plant’s construction is projected to cost between $225 million and $250 million, Juhnke said. Cost ultimately will depend on the date the company starts on the plant project, he said.
“I feel like we’ve made a very significant investment in time and money, and focus of our company, to bring the project to a phase where it’s ready to go,” Juhnke said. “We just need to see the acreage in the region take another few steps forward.”
A tax increment finance district to provide incentives for the plant was set up by the city of Enid, and 90 percent of increased ad valorem taxes will be used to compensate Northstar’s investment, according to a TIF agreement.