A Smithfield Foods subsidiary announced a $100 million joint venture to turn hog manure into energy at its farms in northern Missouri.
Murphy-Brown of Missouri, formerly called Premium Standards Farms, is providing the manure to produce biogas, a fuel similar to natural gas. Roeslein Alternative Energy is providing the management and has engaged an investment banking firm to underwrite the project's financing.
Installation of pumps, pipelines and other processing equipment is to start next spring.
"This is a really exciting project for our company," said Bill Holman, director of administration and compliance for Murphy-Brown. "We're pretty good pig farmers, and this makes us better."
Besides producing biogas, the project is expected to have other environmental benefits, including reducing odors from pig manure. As they have grown in size, hog farms generally have a history of environmental complaints, although their managers say they have made considerable strides to reduce problems.
"All of us at Smithfield Foods are tremendously proud of the many people at Murphy-Brown and Roeslein who have already worked very hard on this project, and we're looking forward to the day when Missouri residents will benefit from this innovative source of biogas energy," Dennis H. Treacy, Smithfield's chief sustainability officer, said in a statement.
Smithfield Foods, which acquired Farmland Foods' pork business in 2003, was itself sold this year to a Chinese company.
Murphy-Brown also has farms in 12 other states and is the largest pork producer in the world. It has farms in five counties in northern Missouri that have 112,000 sows producing pigs that eventually become pork chops, ham and bacon. The Missouri operation, which is based in Princeton, has 1,070 employees.
Murphy-Brown and Smithfield aren't providing funds for the biogas project. Smithfield previously dabbled in producing biogas at its hog farms but found it to be a challenge. Problems include dealing with excess water, difficulty with pumps and processing the biogas so it isn't corrosive. The company decided that others with expertise in biogas should do the job.
The deal announced Monday will have Murphy-Brown scraping the manure into lagoons that already exist and where the waste will decompose and produce gas. The lagoons will have impermeable covers to keep odors down and control water flowing into them.
Roeslein, besides gathering the financing, will manage the biogas operation and sell the fuel. It claims among other things that the biogas project will produce fewer greenhouse gases and reduce Murphy-Brown's carbon footprint.
"Environmental benefits from this project will be significant," said Rudi Roeslein, president of Roeslein.
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