Editor's Note: Corn & Soybean Digest's December 2009 issue profiled Asoyia at approximately the same time the company ceased operations due to financial problems. Here is an update on Asoyia.
In 2008, Asoyia, the farmer-owned, Iowa City, IA-based firm, secured $4 million in venture capital in order to ramp up production of its ultra-low-linolenic acid, identity-preserved soybeans and expand oil sales.
Last year, the firm offered soybean growers $2.75/bu. in premiums and established a reported 100,000 acres in contract production. Company employees projected 2010 oil sales at $45 million.
However, Asoyia's financial picture changed late in 2009.
On Dec. 15, 2009, the company ceased operations and is now in “receivership” with the Pilot Grove Savings Bank after running out of working capital, according to Dave Schmidt, an Asoyia farmer-owner and member of the firm's board of directors.
Asoyia's financial problems resulted from too much production and lower-than-expected sales as a result of the poor economy, according to Schmidt, of Iowa City.
Beth Fulmer-Boyer, Asoyia's former vice president, oil business, says Asoyia's financial troubles also stemmed from high production costs. “It was going to be impossible to sell the oil at any kind of profit to recover all the costs that were put into the system when we gained all those additional acres,” she said.
Roger McEowen, professor of agricultural law at Iowa State University (ISU) and director of ISU's Center for Agricultural Law and Taxation (CALT), says lower prices for substitute products, such as palm and canola oil, likely hurt demand for Asoyia's ultra-low-linolenic soybean oil.
AT PRESS TIME, McEowen advises Asoyia contract growers and other creditors to seek legal counsel to consider forcing Asoyia into involuntary bankruptcy if the firm does not file voluntarily. This could uncover whether preferential transfers or payments to insiders have been made prior to payments to creditors, McEowen says. More details about this action can be found on CALT's Web site at www.calt.iastate.edu/asoyia.html.
Schmidt says details about the status of grower contracts are being discussed with the bank and Asoyia's processor, Cargill. He has not yet closed the door on future business. “There would be a slim possibility it could be reorganized and still do business as Asoyia,” he said.