Issue 52: ADM – Turning Waste into Growth

Issue 52
May/June – 2000
Story Title: ADM – Turning Waste into Growth

A strategy of reducing heat and CO2 emissions, led a US processing company into hydroponic production. The enterprise is now a thriving example of environmental responsibility and symbiotic industries, as GEOFF WILSON explains.

Introduction – the Carbon Dioxide Issue
Carbon dioxide wastes from agribusiness fermentation processes, represent an important opportunity for hydroponic investment in urban areas. In temperate climate zones, such wastes can mean big productivity gains during the colder months of the year, to help offset reduced sunlight and photosynthesis.

The Archer Daniels Midland Company (ADM) in the United States, has 20 years of experience with such an investment, and is an interesting study in how best to develop this opportunity. Around the world, the fermentation industries, the biggest of which are probably the brewing and distillation sectors, are now most vulnerable to government opprobrium and action, plus attack from the conservation movement, over their high level of carbon dioxide production. For example, for every two tonnes of malt produced for making beer, one tonne of carbon dioxide is released.

The sensible brewers and distillers compress carbon dioxide from their fermentations, and sell it for use by other businesses in the food sector (eg. dry ice for keeping perishables chilled, or carbon dioxide for carbonating beverages). The less sensible companies can now expect to be told quite firmly to reduce or stop their carbon dioxide emissions into the air.

The problems of atmospheric carbon dioxide are becoming acute. Scientists report that, when humankind began to industrialise more than a century ago, atmospheric carbon dioxide was around 225 parts per million (ppm). Massive use of fossil fuels, cutting down of forests and the multitude of other reasons for carbon dioxide release, mean that current atmospheric levels are between 340 and 350ppm. In some of our city buildings, the level of carbon dioxide in the air builds up to 500 – 600ppm.

While these are still very safe levels for humans to breathe, such levels are not considered to be safe for the world’s forests or world agriculture, even though carbon dioxide is a gaseous fertiliser which can help increase plant growth. The reason is that a 550ppm level of carbon dioxide in the general atmosphere is expected to trigger a “greenhouse effect”, which will lead to significant climatic changes. Whether these changes will occur still remains in some dispute, but if the doomsayers are right, then moving above a 550ppm carbon dioxide level in the air, will destroy the Amazon rainforest – which some people dub the “lungs of the world” – and it will change rainfall patterns to cause massive agribusiness disruption and consequent starvation. It will also doom low-lying areas of our planet, as global warming causes the seas to expand over the land, as deep, ocean layers take up more heat.

While these theories have their skeptics, there are enough people in positions of political power who take it seriously, and their convictions will make a significant difference in government policy-making from now on. Last October, Europe’s environment ministers met and were convinced by their scientific advisers that they had to act quickly on the problem of uncontrolled “greenhouse gas” emissions – carbon dioxide and methane. They are now determined to keep atmospheric carbon dioxide well below 550ppm.

We can expect other nations to be similarly influenced. Not only are the European ministers setting their own houses in order, but they are developing policies which will influence nations that trade with them. The message already going out from Europe is to reduce greenhouse gas emissions massively – “or risk losing our business”. Sadly, the trade threat could be more potent than the scientific advice.

However, there is now significant scope for hydroponic investment to be encouraged. In business, the marriage partner of the word “threat” is “opportunity”. As the ADM company’s approach well shows, there is a significant business opportunity in hydroponics, for brewing or distilling businesses. They could invest on their own account, or encourage others into a joint venture or a symbiotic association. The writing on the wall is now in plain view for many company boards and their planning executives.

ADM – Hydroponics Through Recycling
Make the wastes of one process serve as the raw materials of another. This is a sound business philosophy propounded by United Nations’ executive, Roland Strong.

It’s also the theory which has underpinned 20 years of success in hydroponics for the Archer Daniels Midland Company, of Illinois, USA.

Since 1905 the ADM company has owned an agribusiness processing facility at Decatur, Illinois, a city of some 83,000 people about 260 kilometres south-west of Chicago. For the past 20 years, the facility has salvaged both heat energy and carbon dioxide for innovative re-use. It now provides the world’s hydroponic industries with an impressive example of how to be a good corporate citizen, at the same time as doing the right thing by shareholders.

ADM is one of the world’s leading agribusiness companies (see box story below). In 1981, the company expanded into the production of high-fructose sweeteners from corn and the associated production of ethanol, industries from which both industrial heat and carbon dioxide can be significant waste products. The waste heat from agribusiness processing is normally vented to the atmosphere via cooling towers, while most waste carbon dioxide from brewing and distillation of ethyl alcohol (in beer and spirits) still goes directly into the atmosphere. ADM decided to use these two “wastes” as raw materials from which to develop technology to further help feed the world. Accordingly, hydroponic growing of a range of vegetables and herbs was one option studied and, ultimately, adopted. (See accompanying story on aquaculture for another, in issue 52 of PH&G).

Waste heat was used to warm hydroponic nutrient to around 20°C (68°F), for use during the cold winter months, when ambient air temperatures in Decatur fall below freezing. Waste heat is also used to warm greenhouse air in late autumn, winter, and early spring. This form of heating is important, since the NFT (nutrient film technique) system in use can take up ambient air temperature easily, to reduce plant growth at times of cold stress. Heat stress is not so much a problem at Decatur.

The waste carbon dioxide from the corn processing and ethanol production, is compressed and liquefied as it comes from the fermentation process. Most of ADM’s liquefied gas is sold for making dry ice, and for the carbonating of soft drinks. This is handy revenue that many other ethanol (beer/spirits) producers still seem to ignore – to the detriment of the world’s environment. At Decatur, a relatively small amount of the carbon dioxide from fermentation is also used as a gaseous fertiliser for ADM’s hydroponic vegetable crops in the nearby 4.2 hectare (10.5 acre) facility. This is especially important in the colder months, when crop growth needs to be stimulated.

According to Dan Helfrich, Manager of the ADM hydroponic farm at Decatur, US ethanol production could potentially service a huge area of hydroponics with carbon dioxide “fertiliser” at the rates commonly used. The opportunity, therefore, is significant for hydroponic growers to locate their production close to fermentation plants, where waste heat and carbon dioxide are available. These are mostly in urban or semi-urban areas, which means that they are also close to other important infrastructure, such as power and transport.

ADM’s compressed gas is piped underground in its liquid form from the fermenting operation to the hydroponic facility at Decatur, a matter of a few hundred metres. When needed, the liquid carbon dioxide is converted into gas and dispensed into the greenhouse air supply, via a simple mechanism in the heating and blowing ventilation system. While the compressing and liquefying equipment is expensive, the release system costs very little, according to Dan Helfrich. Underground piping of carbon dioxide, like that at Decatur, could serve a fairly wide area of hydroponics around a fermentation plant.

“Most of our carbon dioxide is used in winter to speed up production, to compensate for the shorter sunlight hours. Not much is used in July, at the height of our summer”, Helfrich says.

Average sunlight levels in the winter months are nine hours a day in Decatur, compared with an average of 13 hours a day in summer. The winter peak of airborne carbon dioxide in ADM’s greenhouses is around 1200 parts per million (ppm), whereas the summer “trough” is a mere 340ppm (which is the Decatur ambient level of airborne carbon dioxide gas).

Dan believes that 1200 ppm is the upper limit for carbon dioxide enhancement. ADM has experimented with higher levels and found they induced a dehydration effect that initiated a ‘tip-burn’ on lettuce leaves. The company believes that the extra growth as a result of using carbon dioxide enhancement could be as high as 40%, however Dan Helfrich doesn’t like using such absolute figures from laboratory trial calculations, because the overall rate of increase is, in practice, extremely variable, and dependent on the sunlight available for photosynthesis. Monitoring of carbon dioxide in ADM’s greenhouses is done by infrared sensors made either by a Canadian company (Priva brand) or a Mexican company (Horiba brand).

It would seem from the ADM experience that less benefit may be experienced from carbon dioxide enhancement in the sub-tropics and tropics, especially if a good air flow is maintained and ambient levels of carbon dioxide flowing past plant leaves are adequate for optimum growth.

Like other commercial hydroponic growers, Dan believes that air movement is critical to good hydroponic production, even when the greenhouses are “closed” to conserve heat in winter. Carbon dioxide enhancement is thus a management tool at ADM for appropriate circumstances.

The extra carbon dioxide injected into the 3-metre high polycarbonate greenhouses, greatly aids Dan Helfrich’s critical task of maintaining a steady supply of up to 10,000 Boston Bib lettuce heads a day, five days a week, plus 20,000 to 30,000 seedless cucumbers a month, and several tonnes of herbs (mint, basil, chives and rosemary) each month. This is a volume of hydroponic production most commercial growers can only dream about, and well indicates the significant investment that ADM has made in hydroponic technology since 1981.

The company does not reveal its financial figures. But it can be safely said that the capitalisation to productivity ratio on its hydroponics is much more favourable than most other hydroponic investments in temperate to cold climates – because of the “free” heat and carbon dioxide. Also, the ADM enterprise enjoys several other advantages. One is that it produces its own electricity at Decatur from the clean burning of coal and old tyres, which means that the hydroponic facility has electrical power at “company prices”. Another advantage is their location. Decatur is close to midwest US salad vegetable markets, which represent considerable transport cost penalties for field growers in California and Florida.

In the US at present, hydroponic produce generally achieves a 10% premium wholesale price and, if my personal observations are correct, at least a 20% price premium in the retail store. The secret is in the packaging and presentation of a superior product, and ADM is a leader in this. Lettuce, cucumbers and herbs are packed for the company’s ‘Raingarden’ brand, or for custom packs for supermarket house brands. ‘Clam shell’ containers allow hydroponic lettuce to be sold with the roots on – which lengthens shelf life and preserves crispness. They are marketed as a “living lettuce”, and are now favoured by customers over field-grown lettuce for their freedom from leaf wastage and pesticide residues. The lettuces leave Decatur 12 heads to a box, with boxes on pallets that easily fit a refrigerated road rig.

“The hydroponic lettuce we market is 99% usable,” comments Dan Helfrich proudly. “Field-grown lettuce has considerable loss of outer leaves.”

However, while the word ‘hydroponic’ is used in promotion, the company has yet to capitalise in its packaging on the “carbon dioxide enhanced” story. This could be a useful promotional point when customer concern about reducing carbon dioxide emissions is more widespread. It is believed that ADM at Decatur is the only company in the world with such sensible and practical use of waste heat and waste carbon dioxide from agribusiness processing.

‘We have a one-of-a-kind operation,” Dan says. “However, it is understandable in many circumstances. Unless a company has two or three of the production advantages enjoyed by ADM at Decatur, they would not see the same sense in investing in commercial hydroponics.”

With the advantages of their experience, ADM has also engaged in occasional consultancy work on hydroponics.

“We’ve consulted to other companies a few times in the last 20 years, but we don’t aggressively pursue consultancy work,” Dan says.

Perhaps demand for such consultancy may soon change, as the 20-year experience by ADM in using carbon dioxide represents a most valuable resource. The world’s agribusiness needs to begin a massive attack on lowering carbon dioxide emissions, otherwise there could be a very sharp focus (and some unfavourable publicity) on companies with fermentation processing that vents carbon dioxide and heat to the atmosphere. In my view, it would well pay some company boards and senior planners to take advantage of the ADM policy at Decatur of allowing visits.

“We have from 1500 to 2000 visitors a year to the Decatur facility, ” Dan explains. “They include customers, farmer groups, university groups, high school groups and international visitors.”

Dan began working at the ADM hydroponic facility at Decatur in 1980, and has risen to be manager of something very special in agribusiness. Dan joined the company to set up some of the electrical systems for the hydroponic venture. As he tells it, he had some background in zoology and biology, but he often refers to one of his best qualifications as being “common sense logic developed from growing up on a family grain and livestock farm”.

While working for ADM, Dan studied agricultural technology and management at the Illinois State University. His background fits him well for expounding the company view that “ADM is centred around the belief that feeding the world’s people is the biggest challenge of the 21st Century” – and that hydroponics is one of the important technologies for this.

Aquaculture – a Parallel Enterprise
Seven years ago, the ADM company’s operation at Decatur branched out into aquaculture, something that is fast becoming a most complementary enterprise to hydroponic investment, as the combined technology of ‘aquaponics’.

ADM tried indoor rearing of a range of aquatic animals, including Catfish, Bass and bullfrogs, but ultimately settled on Tilapia, in what is currently the largest indoor complex in the US growing this species. The Tilapia are fed on soy and corn byproducts from the company’s agribusiness processing plants. Their water is also warmed by using the waste heat from industrial processes nearby.

The Tilapia are sold live to restaurants, hotels and other food service markets. Two big markets serviced are those of Chicago (260 kilometres north east) and New York, a road freight haul of about 1,600 kilometres eastwards. At any one time, the Tilapia growing stock is about two million fish. The company has its own fish hatchery on site at Decatur, and is totally self-sustaining.

Dan Helfrich also manages ADM’s aquaculture enterprise at Decatur, a task which probably makes him a unique agribusiness executive. It could also lead him and ADM to be a significant pioneer in the new technology of alternative agriculture – helping to feed the world in the 21st century.

ADM – a Major Player in Agribusiness
Two linseed millers, John W. Daniels and George P. Archer, set up the Archer Daniels Company in Decatur, Illinois, USA, in the mid 1800s. It later became the Archer Daniels Midland Company after an acquisition in 1923, which made it the world’s largest linseed company. Since then, ADM has developed into one of the world’s largest agribusiness companies, operating around the world, and mostly based on acquisition, processing, packaging, distribution and marketing of products from 11 cereal grains and oilseeds. The company headquarters is still in Decatur. Last financial year, ADM’s turnover was US$14 Billion. It employs more than 23,000 people worldwide. The company operates 205 cereal grain and oilseed processing plants around the world and has a transportation business that meshes with its agribusiness. ADM owns about 13,000 rail cars, 2250 river barges and about 1,200 road trucks to transport its farm produce purchases and to distribute processed products to world markets. Besides the hydroponic produce and live fish production, ADM’s product list is extensive in human foods, feeds for livestock, fuel (ethanol for motor vehicles) and ‘neutraceuticals’ (which include health benefit foods, and nutritional supplements). It is thus a very logical move for ADM’s hydroponic operation to be studying the growing of ‘botanicals’, such as St Johns Wort and Echinacea, for the herbal medicine business.