Westfeeds to Buy Cargill's Billings Mill

Cargill announced today that it has reached an agreement with Westfeeds to buy Cargill’s Billings feed mill and property. Officials from both companies anticipate that the sale will close by mid-February 2010.

According to Westfeeds officials, the addition of the Billings feed mill facility will complement the company’s existing presence in Billings as well as regionally.

“We are pleased by the opportunities that Cargill’s Billings feed operations present for our customers,” said Scott Black, president and chief executive officer of Westfeeds. “This agreement further underscores our dedication to serving the animal nutrition needs of our customers as we strive towards our vision of being the premier provider of animal nutrition in the Northern Plains.”

Cargill acquired the facility from Farr Better Feeds in 1991. The plant, which was built in 1968, has six full-time employees and a production capacity of 50,000 tons. Cargill Animal Nutrition produces a variety of bulk cattle feeds at the facility for the region’s beef and dairy producers. With this agreement, Cargill will continue to produce bagged feeds, pet food, and its proprietary ROC® mineral product, among other offerings, throughout the region at other Cargill facilities.

“Under this arrangement, we are placing a valued feed manufacturing asset in the hands of a local organization that shares our commitment to this market and its livestock customers,” said Karl Thoene, general manager for Cargill Animal Nutrition’s Pacific Northwest region.  “Through an exclusive, bulk-feed toll manufacturing agreement with Westfeeds and by shifting our bagged feed manufacturing focus to other Cargill regional facilities, we streamline our operations and better utilize our regional capabilities to improve our customer offerings. This agreement combines Westfeeds’ manufacturing expertise with Cargill’s nutritional expertise, thereby bringing additional value to customers throughout Montana and northern Wyoming.”

Montanans Support Natural Resource Development

Poll Shows Pulse of Montana Voters

The Power Base (P-Base) is an annual scientific poll of 600 Montana voters on a variety of business and political issues with a margin of error of 4.1%. The poll is commissioned by the Montana Chamber of Commerce and other business groups to determine what regular Montanans think about important economic issues facing our state. Here are some of the results:

Economic Development

The unemployment levels are a top concern for Montanans. 40% listed it as the top problem facing our state, and the next highest problem, health care, was a third of that level at 15%. Montanans want to get back to work, and they are looking for businesses, not government, to provide the jobs.

As in prior surveys, the P-base shows Montanans want to see more business growth, especially in high wage businesses like the natural resource industries. For example, 78% of Montana voters want the state to encourage more timber harvesting, 76% want more oil & gas development, 71% want more coal development and 70% want more mining. Almost two-thirds of Montanans say the state Land Board should go forward with the Otter Creek coal tracts leasing as well, which is an issue the Board will take up at its December 21st meeting.

Read more: Montanans Support Natural Resource Development

Research Council Reports Coal with CCS Outperforms Alternatives

Research Council Reports Coal with CCS Outperforms Alternatives

Coal with carbon capture and storage (CCS) offers the best long-term potential to serve U.S. electricity growth by 2035, providing more than three times the generation of nuclear power and nearly triple the power of hydroelectric, wind and solar sources combined.

The report’s authors, including U.S. Secretary of Energy Dr. Stephen Chu, call for the construction of up to 20 retrofitted and new CCS plants in the United States by 2020.

That’s the conclusion of “America’s Energy Future: Technology Opportunities, Risks and Tradeoffs,” a study released by the National Research Council, a group that includes the National Academy of Sciences and the National Academy of Engineering. The study committee features numerous distinguished academic leaders, including Chair Dr. Harold T. Shapiro of Princeton University; Dr. Mark S. Wrighton, Vice Chair of Washington University in St. Louis; U.S. Secretary of Energy Dr. Steven Chu; and Dr. Lester B. Lave of Carnegie Mellon University.

The Council estimates that the current coal fleet could be retrofitted to capture and store carbon to generate 1,200 terawatt hours of energy annually by 2035, while new CCS plants would add another 1,800 terawatt hours of power to the national energy grid. This compares to just 794 terawatt hours produced by nuclear plants and 1,100 for multiple renewable sources. Taken together, CCS technologies have the scale and low cost to meet much of the projected power consumption needs in the United States: “In combination, the entire existing coal power fleet could be replaced by CCS coal power by 2035,” the authors write.

Read more: Research Council Reports Coal with CCS Outperforms Alternatives

Whole Energy Gets Exclusive Rights

The Energy & Environmental Research Center (EERC) Foundation and Whole Energy Fuels Corporation, headquartered in Bellingham, Washington, are poised to commercialize a novel and groundbreaking cellulosic biofuel technology developed at the EERC at the University of North Dakota. Whole Energy is receiving global, exclusive licensing rights to EERC Foundation’s technology, which converts biomass and other recycled material into liquid biofuels.

Utilizing cellulosic materials to produce biofuels has several advantages. Cellulosic materials such as wood, grasses, or the nonedible parts of crops, including wheat straw, soybean hulls, and corn cobs, are vast and diverse feedstocks compared to first-generation feedstocks like corn starch or sugarcane. In addition, cellulosic fuels promise to become the lowest-cost biofuel while at the same time provide large reductions in greenhouse gas emissions compared to petroleum-derived fuels.

Read more: Whole Energy Gets Exclusive Rights

Floberg Name Means Real Estate in Billings

When it comes to the real estate business in Montana, Flobergs wrote the book, figuratively and literally. Don and Marilyn Floberg are celebrating 50 years in business in a profession they helped shape for Billings and for the state.

When Don Floberg decided that he wanted to pull up stakes and move to Montana, he was surprised to discover that there were no rules or regulations governing the business in Montana. From Bellevue, Washington, he called the state government to inquire about getting a real estate license. It was a long while before anyone returned his call, and then it came from the Department of Agriculture, from someone who really didn’t know what to tell him. “Just send $5 for a salesman’s license and $10 for a broker’s license,” he was ultimately informed.

Montana was the only state in the nation in 1959, that didn’t have standards and regulations controlling the real estate profession. There was no multiple-listing service, and no one used listing contracts. Business was done with a handshake.

It became one of Don’s primary goals to change that. In 1963, the state legislature passed licensing laws, and the requirement that prospective agents had to pass a proficiency test. But a significant percentage of applicants consistently failed the tests and state officials saw a need for some kind of education program. Don recommended his former-school-teacher wife, Marilyn, to take on the challenge.

Read more: Floberg Name Means Real Estate in Billings

Universal Care Doesn’t Have to Mean Public Plan

Universal health care doesn’t have to be government-run. It doesn’t have to be a public,  single-payer system. Universal health care that is consumer-driven is not only possible but preferable, according to Dr. Regina Herzlinger. Rather than modeling a plan after the failed systems of Great Britain or Canada, the US would be better served to look more closely at Switzerland’s system, Herzlinger told an audience attending a forum on reforming health care in Bozeman last week.

In Switzerland not only does everyone have coverage they have a world of choices. And,  they have competition, which drives innovation, which drives down prices. said Herzlinger, a Senior Fellow at the Manhattan Institute Center for Medical Progress and author of the book “Who Killed Health Care: America’s $2 Trillion Problem – and the Consumer-driven Cure.” She was elected as one of “The Most Powerful People in Healthcare.”

Read more: Universal Care Doesn’t Have to Mean Public Plan

Texting More Than Doubles in Last Year

How r u? The way we communicate is rapidly evolving, as evidenced by the fact that the number of text messages sent on cell phones has more than doubled from 48 billion in 2007 to 110 billion in 2008, according to the U.S. Census Bureau’s Statistical Abstract of the United States: 2010.

The Statistical Abstract, aka “Uncle Sam’s Almanac,” perennially the federal government’s best-selling reference book, has been published since 1878 — before automobiles, airplanes and motion pictures had even been invented. Contained in the 129th edition are more than 1,400 tables of social, political and economic facts which collectively describe the state of our nation and the world. Included are 53 new tables, covering topics such as worldwide space launch events this decade, the use of complementary and alternative medicine, the type of work flexibility provided to employees, employment status of veterans and road fatalities by country.

Highlights include:

Don’t read all about it …

—The number of daily newspapers declined from 1,480 in 2000 to 1,408 in 2008. Likewise, the average number of daily newspapers sold dropped from 55.8 million copies in 2000 to 48.6 million in 2008. (Table 1098)

Read more: Texting More Than Doubles in Last Year

Looking at the State Of Banking in Montana

Looking at the State Of Banking in Montana

By Evelyn Pyburn

Despite a tumultuous year in the banking industry, Montana’s banks are sound and looking for business; but that doesn’t mean they don’t have worries.

The biggest concern is the prospect of new regulations. New regulations could push more banks into marginal positions, weakening the industry rather than improving the situation, worries Bill Coffee, President of Stockman Bank of Montana. Additionally, new regulations restrict customer choice and fleBill Coffeexibility, Coffee added. 

“We are afraid the regulatory burden is going to increase.  These increased costs of compliance, along with more taxes, have to come off the bottom line.  You can’t always pass it on, which of course pushes some banks out of business and weakens the rest,” explained Coffee.

Coffee is also apprehensive about the FDIC mandate that banks pay insurance premiums three years in advance, with no guarantee that they won’t have to pay more, in order to bailout the bad actors of the industry. The requirement is reducing the capacity of sound banks to lend, he says – exactly the opposite of what is needed to help turn the current economic crisis around.

When it comes to the issue of regulation, it’s not as though the banks aren’t already heavily regulated. In fact, enforcing existing regulations in an equitable manner is what Coffee recommends; pointing out that it was lax enforcement of existing rules that partially led to this financial crisis. Furthermore, many experts blame non-regulated entities for a large role in our current problems and suggest widening the regulatory umbrella to include them is a better solution.

While closer scrutiny and tighter standards are being pursued, many banks are quite interested in lending. Stockman Bank is, in fact, ratcheting up advertising and marketing efforts to attract new customers and is very active throughout the state, said Coffee.

Even with the economic downturn nationally, and a flattening in some local markets, these are times in which new entrepreneurs emerge. “This will create new opportunities,” said Coffee.

Coffee said that he is uncertain about the future when looking at the national level – “not because of the American people, but because of the direction of our leadership.” But, Coffee is optimistic about Montana. “We didn’t do all the crazy things that happened nationally. Montanans are more responsible and harder working,” he said. Given Montana’s relatively better economy, Coffee said, “I don’t see any reason it would fall – especially not in Billings and surrounding communities.”

Coffee’s optimism about Montana is well founded given a report from the Ninth District of the Federal Reserve. As was evident early-on, Montana’s banking business was “largely unaffected by the so-called toxic asset controversy surrounding subprime mortgages,” and over time, while the fallout undermined profitability for banks in many parts of the country, Montana banks have held steady.

Said Ronald A. Wirtz, Editor of the Federal Reserve’s fedgazette, in July, even though “2008 will go down as a scarlet-red-letter year for banks across the country and the Ninth District,…most district banks today still appear healthy.” 

“…although health indicators have worsened considerably in the past 18 months or so, and appear likely to decline further, banks in the Ninth District have some financial strength remaining to help them withstand this bout of economic flu,” said Wirtz —especially so in Montana and North Dakota.

As one indicator of that strength Wirtz sited the level of past due loans that banks have had to write off as uncollectible. While the rate “rose steeply” in all district states, he said, “certain states like Montana still have rates for these important measures that are relatively low, although double what they were a year ago.”

“Banks in North Dakota and Montana have performed comparatively well to this point. Net income has dropped less than 10 percent since 2006 in the Peace Garden state, and the number of unprofitable banks remained in single digits in 2008 for both states. Banks in each state continue to have low levels of noncurrent loans and net charge-offs, probably due in part to the outsized effects of strong farm and energy sectors in both states last year,” said Wirtz. He did warn, however, that it has been demonstrated over the past year that conditions can change quickly.

The report further noted, that when looking at such data as “return on assets” “net investment margin” or “nonperforming assets,” while the trend is downward, the levels at which they sit for the region are no where near as low as in the 1980s – another era of economic turmoil.

But there is some fallout in the state. Coffee said that over the past three months he has heard from five banks who are interested in selling. While circumstances vary, at least three are concerned about having profit margins too narrow to afford hiring more staff to deal with anticipated additional  regulation. In a couple cases, the owners are close enough to retirement that they lack the incentive to adapt to a new regulatory regime.

“There‘s been discussion about a new regulatory protection agency for consumers,” said Coffee, adding one more to the number of agencies which regulate banking in the US. Depending on whether they are a private or public company, banks are regulated by several agencies of state and federal governments, as well as by the Security Exchange Commission and the Internal Revenue Service.

“More agencies increase the chance for conflicting direction,” said Coffee.  Such conflicts already exist.  “Sometimes you have to prioritize which rules to comply with,” explained Coffee, “there’s a cost to doing that.”

The idea of a “super agency” of some sort prompts even more concern.  “There’s the worry,” said Coffee, “that their goal will be based upon achieving some social agenda, rather than sound banking” – which is what helped lead to the mortgage crisis, as politicians championed loans for unqualified people.

Regulations threaten the well-being of community banks, which Coffee believes are going to be more important to local economic growth than ever before. “They aren’t the engines of growth, they are the conduits,” he said. “If you continue to over regulate and over burden them, they can’t survive.” 

Adding to the burdens being faced by Montana banks who played by the rules is having to pick up the tab for those who didn’t. There’s a perception that the cost of bailing out commercial banks is falling directly to US taxpayers, but that’s not the case, explained Coffee. The FDIC is bearing the cost. The FDIC is the Federal Deposit Insurance Corporation funded by premiums of member banks. In order to meet the current extraordinary drain on reserves, they have required that members pay premiums three years in advance, removing capital from banks that could otherwise be used for loans.

Since “banking is all about leverage,” said Coffee, the upfront premium payments could remove $40-50 million from a typical bank’s lending capacity, at a time when economic recovery requires an increase in lending to small businesses.

Coffee believes it would be better for the FDIC to borrow the needed reserves from the FDIC’s already established credit line with the US Treasury and pay it back from future premium payments.  Member banks will have increased capacity to pay larger premiums as the overall economy improves, which will lead to better loan quality and higher earnings.

Coffee predicts that people are going to save more in the future – going back to more traditional financial practices. However, he warns, “there are going to be more bank failures” — it’s not over, yet.



ND Research Center to Develop Fuel from Algae

The Energy & Environmental Research Center (EERC) at the University of North Dakota has been awarded a subcontract by Science Applications International Corporation (SAIC), a Fortune 500 scientific, engineering, and technology applications company based in San Diego, California, to help produce jet fuel from algae. As an example of its potential, just one acre of algae produces between 5,000 and 15,000 gallons of fuel, compared to only 50 gallons from 1 acre of soybeans.

The effort is being funded by the U.S. Department of Defense’s (DoD’s) Defense Advanced Research Projects Agency (DARPA) and is a continuation of the world’s first successful production of 100% renewable fuel for the U.S. military by the EERC.

“The EERC provides real-world solutions to our nation’s mounting economic, environmental, and security challenges,” said EERC Director Gerald Groenewold.

Under a previous DARPA contract, the EERC advanced the development of a feedstock-flexible process that can utilize various crop oil feedstocks to produce combinations of renewable jet fuel, diesel, and naphtha (a constituent used to create chemicals and gasoline) that are essentially identical to their petroleum-derived counterparts.

The EERC will utilize the same proprietary technology to produce jet fuel from algae oils. Working with SAIC to produce the fuels from algae enhances the EERC’s capabilities for commercial production of economically viable renewable fuels that are fully interchangeable with existing fuels and distribution networks, do not negatively impact the world’s food supply, and are environmentally benign.

Together, SAIC and the EERC will produce fuel samples for government test and evaluation. Sample production will be performed in the EERC’s liquid fuel demonstration facilities.

Information generated during this effort will support development of a design for a pilot test facility with the flexibility to produce either diesel or jet fuel in response to market demand. This effort will advance the research and allow for a detailed assessment of the economic viability of the EERC’s renewable oil-refining technology.




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