The nation's first farmer-owned biomass cooperative is expanding.

Show Me Energy Cooperative, Centerview, MO, recently completed an equity drive that increased its membership from 400 to 650 and generated capital to increase production of biomass fuel pellets and eventually begin manufacturing cellulosic biodiesel.

Since September 2008, the co-op has been making pellets from a wide range of fibrous materials supplied by its members. These include grass straws such as switchgrass, big bluestem and tall fescue; cornstalks; grain sorghum residue; and even weeds.

“They bring us everything; you wouldn't believe the stuff they've brought in,” says board chairman Steve Flick.

One member, for example, harvested weeds as biomass in late September that year. Wet weather had prevented him from planting soybeans after wheat harvest, and the 3,000+ acres were infested with pigweed and johnsongrass. The farmer made more money with weeds than he would have with soybeans, Flick claims.

“It would scare you what he made net,” he says.

Members within 100 miles of Centerview deliver round and square bales to the plant and are paid based on the material's Btu content. Payments typically range from $45 to $60/ton, plus they get money from the federal government under the Biomass Crop Assistance Program (BCAP).

“For every dollar we pay, the Farm Service Agency pays them another dollar,” Flick reports. “Show Me was the first BCAP-designated area in the U.S.”

Making consistent fuel pellets from a wide variety of feedstocks has been challenging. “It's been a learning curve from day one,” he says. “Over the year, we've gotten pretty good at it.”

Some of the pellets have been shipped to other states and even to Europe, but most are sold locally. Members get them at cost for heating their homes, and for non-members they're 40% cheaper than wood pellets, says Flick.

“About 3-4 tons/year will heat an average-size house in Missouri,” he says.

However, because of the pellets' high ash content, conventional pellet stoves won't work.

“You need a multi-fuel corn-burning stove. It has to have an ash pan that removes ash from the fire pot.”

An unexpected market developed when the co-op was contacted by growers at Tyson Foods, Inc., looking for a lower-cost alternative to propane. Farmers who raise chickens for Tyson now heat their barns with biomass pellets at much less cost, Flick says.

On an experimental basis, the pellets are also being burned with coal to generate electricity. A 15,000-ton test burn will soon be completed at one local power plant, and a second test is planned at another.

The expansion will bolster production capacity and cash in on new technology that will increase the amount of Btus in each pound of pellets, making them worth more. Still in the early planning stages, the cellulosic biodiesel plant is expected to turn out 200,000 gallons per year, primarily for co-op members.

The co-op isn't making much money yet, but “we're paying our bills,” says Flick.

“In this tough economy, we feel blessed,” he adds. “We're not killing any fat hog here, but we're proving the idea and moving it to the next level. We've got a lot of farmer participation and a tremendous amount of interest.”

Moreover, members are utilizing carbon stored in their soils, helping to reduce greenhouse gases.

“Greenhouse gas reduction has been Show Me's model from day one,” says Flick.