Developers near fundraising goal for pulse-crops processing plant
South Dakota Pulse Processors is close to reaching its investment fundraising goal to build a processing plant and is getting the word out about pulse crops in the state.
After holding several investor meetings across South Dakota within the last year, the company has now raised $1.16 million, about 77 percent of its minimum goal, as it hopes to help grow the output of pulse crops.
Pulse crops are legumes that produce seeds used in food products or eaten alone. Pulse crops that are currently grown in the state are green and yellow field peas, chickpeas and lentils.
The company hopes to open a $5 million, 5,500-square-foot plant to allow the cleaning, sifting, polishing, color sorting, splitting, milling and packaging of pulse crops near Harrold, a small town 30 miles east of Pierre. It would employ approximately 10 people to start.
First, a minimum of $1.5 million needs to be raised by selling shares of the company. A minimum of $15,000 is required to invest, and investors must be South Dakota residents.
"As soon as we hit that number we are planning on moving ahead with design and construction," board member Brian Minish said. "We are hoping to be operational in time to process this year's crop."
He plans more investor meetings in the coming months to raise the remaining equity.
"We have people that have said they want to invest. It's just a matter of getting them to sign the papers," Minish said.
The plant would be able to process 5 metric tons per hour. Pierre Economic Development Group would build the building and a rail structure to the building and then lease it to the company.
Concerns about drought conditions may have deterred some investors, according to Minish.
"I think in general producers are probably a little more conservative with their cash during this time of uncertainty," he said. "But at the same time, the drier conditions highlight the need for pulse crops, because they are a crop that can thrive with little moisture."
Despite the drought, Minish is optimistic.
"I had a board member tell me just this morning that they were talking to a farmer that bought a new piece of land and is going to plant pulse crops on it," Minish said. "I think the interest is out there. We just need to get the facility."
Most current pulse producers in South Dakota take their crops to North Dakota for sale. Minish thinks that with a production plant in South Dakota, not only would those producers have to travel less, but more farmers would plant more pulse crops.
When similar plants were being built in North Dakota, production of pulse crops in those areas increased exponentially. South Dakota Pulse Processors hopes a similar pattern will occur when its facility is built.
According to Minish, demand for pulse crops is starting to increase as the market for gluten-free flours increases. Also, pulse crops have a low glycemic index, making them ideal for the management of diabetes. The U.S. Department of Agriculture recently approved the use of pulse crops in school lunch programs.
"About one-third of the world is using pulse crops as their staple food," Minish said. "In our case, we will be selling globally as well as in the United States."
In India, the largest producer and consumer of pulse crops, people consume about a cup a day, compared to 1.6 cups a year in the United States.
Like soybeans, pulse crops can play a vital role in crop rotation because of their ability to affix nitrogen to the soil. For this reason, Minish said pulse crops are ideal for central South Dakota.
"It actually affixes more nitrogen than what soybeans will do," Minish said.
Pulse crops also have a shorter growing season, allowing them to be harvested in the middle of August and allowing farmers to get in their fields to plant wheat sooner.