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Paper Number: 01-16075

An ASAE Meeting Presentation

Finding an Economic and Environmental Balance to the Technology of Producing Building Materials from Agricultural Crop Residue

Keith E. Gorzell, Vice President

Meadowood Industries, Inc., PO Box 257, Belmont, California, 94002 KeithA@meadowoodindustries.com

Written for presentation at the

2001 ASAE Annual International Meeting

Sponsored by ASAE

Sacramento Convention Center

Sacramento, California, USA

July 30-August 1, 2001

Abstract. Cost effective production of building and molded materials using agricultural crop residue can offset emissions from some open field burning, provide revenue to growers, and augment forest product use.  Developing the technology has proven easier than plant financing, viable production and market entry.  Meadowood Industries Inc. has improved prior technology to make decorative and structural panels from Oregon ryegrass that now approach many of the properties of wood based Oriented Strand Board (OSB).  Others have perfected wheat and bagasse derived products that meet or exceed many of the properties of particleboard, and approach some of the physical and mechanical properties of Medium Density Fiberboard (MDF). Viable production methods and effective marketing are required to achieve sustainable agricultural, and realistic environmental benefits through agricultural board or panels (Ag-board) production from annual biobased materials. Effective participation is also required from regulatory agencies and non-governmental organizations (NGO) with environmental interests.

Keywords. Oriented Strand Board, OSB, Ag-board, Medium Density Fiberboard, MDF, Meadowood, composite board, Ag-fiber, strawboard, straw board, straw, particleboard, field burning, panelboard, crop residue, bioproduct, biobased, building materials, structural panels.



Does the Ag-board industry have a future in North America?  The author firmly believes so.  However, viable production and marketing are critical factors that must be addressed as carefully or more so than technology and economics.  The fledgling Ag-board industry is in critical need of successful quality product delivery. 

The author is pleased that ASAE has indicated an interest in the field of Industrial Products from Biomass.  Biomass is a major product opportunity for agriculture that certainly should be a subject of interest to this forum. The Composite Wood Products Industry must receive greater participation from the fields of Agricultural and Biological Engineering to realize the potential success for Industrial Biomass in the manufacture of Ag-board and other synergistic products.

Recent Ag-board industry history has been that of optimistically oversold investments in under-financed projects that lacked appropriate capital for adequate product and market development.

bulletAncient myths tell of straw being spun into gold by Alchemists.
bulletAg-board investors tell of their gold being unraveled into straw by Promoters.

Volumes of statistical data concerning forest use vs. population growth, and yield of biomass or fiber per unit of area for various crops is available. Financial and engineering data generally predicts expected board plant production. Data is important, however, it is of little value unless sound business and engineering practices are employed to collect materials, develop viable products and create new markets that will achieve sustained Ag-board plant profitability.

The future success of the Ag-board industry requires:

Marketing, Marketing, Marketing (of viable product)

Environmental concerns and the actual or perceived scarcity of wood, has resulted in extensive research to use annual plants as alternatives to wood for building materials. This interest is further evidenced by the formation of straw-to-panelboard support businesses that provide consulting services and equipment development specifically intended for Ag-board production. Government and environmental programs promote such work. Numerous technical papers about agricultural fibers have been presented at wood products industry or alternative building material events. Several plants have been built, but very few have been successful.

The economics of halting all field burning brings forth complex issues of enjoying clean air while maintaining a reliable supply of inexpensive food and fiber. Regulatory solutions are in need of economic solutions before regulation and the marketplace can achieve a reasonable balance of clean air and sustainable agriculture.  Sustained profitable production is the elusive objective.

The technology to manufacture reliable high quality building materials from alternative crops has significantly advanced. However, current collection, transportation, storage and adhesive costs tend to boost the comparative price of manufacturing products from agricultural residues above the commodity threshold. Therefore, directly challenging the large-scale production and price sensitive wood product commodity markets offers little room for profit.  Developing viable specialty products for niche markets is a market entry strategy that can bring initial profit and success to agricultural derived building materials while establishing future market acceptance.

Specialty furniture, lightweight store fixtures and wall coverings for Interior Design are examples of niche markets that this paper uses as examples to advance the case for the use of agricultural materials on their own merits.  Government and Environmental product incentives are encouraging but they cannot serve as the long-term solution.

Background of Meadowood Industries

The author's background in the Ag-board industry comes from previous practical experience in agriculture, and as, Vice President of Meadowood Industries, Inc. of Albany, Oregon (Meadowood). The company has provided alternative or "green" building materials from sustainable agriculture for the past 25 years. Meadowood develops, manufactures and markets unique decorative and structural boards, panels, and molded products, primarily from Oregon ryegrass in a small-scale production facility. The company currently operates on a demand basis to supply products and research for customers while developing expansion plans.

The author has served as a consultant to other Ag-board plant projects, to financial institutions reviewing Ag-board business plans, and visited China in the spring of 2000 to evaluate the resources and opportunities for Ag-board production.

Meadowood was founded in 1977 to make Ag-board based on some original straw particleboard research completed in the early 1970's at Oregon State University in Corvallis, OR (Barbour and Groner). Meadowood now uses longer pieces of plant stems, and binder modifications to achieve certain strength to weight benefits that are superior to many comparable wood products. The company has continued to evolve better methods of meeting production and marketing challenges, primarily with private resources. Research and production work for the company and for clients has resulted in panel products and laminates of various densities from a wide range of materials. Materials include agricultural fibers such as buckwheat hulls, rice stalks and hulls, various types of cereal grain stalks, corn stover, kenaf, bagasse, other forage and grasses, and urban wastes including chopped money. Meadowood's primary focus has been Oregon ryegrass straw that remains after the grass seed harvest.

The company's board and molded products have been sold through home centers, lumberyards and specialty distributors on a direct basis.  A line of Visual Merchandising fixtures have been developed and sold direct or through trade representatives in New York and San Francisco. The display fixtures and props have been also sold through the floral trade.  Decorator panels and wall treatments are sold to Architectural and Interior Design Professionals.  Novelty items such as plaques and clocks are sold directly and through distribution channels.  Customers generally recognize the Meadowood™ branding and understand the differentiation of Ag-board products from wood. They appreciate the unique benefits of strength to weight, acoustic, and appearance value.  We have proven that we know how to make quality board and have moved enough merchandise in diverse markets to know that sufficient specialty markets are available to justify expanding the business into a much larger production facility.

As a part of the due diligence for the planned expansion Meadowood is conducting a comprehensive feasibility study. The study includes an evaluation of the agricultural materials based industry, and its relationship to the wood based Particleboard/Composite board industry. The studies indicate that the nature of the composite board products and equipment industry is such that our expansion must be in the minimum cost range of $25 to $35 million for design, land acquisition, refurbished equipment, construction, startup and market expansion. 

The current economies of scale in the North American and European wood products industry dictate high production plants with a narrow product mix costing from $100 million to as much as $400 million.  These economies of scale and certain inherent higher costs of processing agricultural materials limit Meadowood's consideration of entering into direct competition with the consolidated and entrenched wood-based commodity board businesses.  Therefore, a successful Meadowood business model must be directed toward lower volume specialty or niche markets until the viability of commodity panelboards is established. The niche model can take advantage of the lower capital cost of quality and proven refurbished equipment.  The business plan must include the very substantial cost of pioneering standards and markets in these specialty areas with capital commitments that are proportionately larger than for a similar wood products plant supplying established commodity products to long established markets.

We foresee that market pioneering will add at least 35% to the financing package, over and above the facility and startup costs for Meadowood. An addition of 100 % for marketing would be preferred but cannot be supported by most business plan models. This means that an estimated $7 to $12 million of additional long term capital or $4 to $6 million in grant funding will be required as a commitment for market pioneering over a period of 2 to 3 years to assure the development of a successful niche and expanded Ag-board business.

Niche Markets and Perceptions

An associate of the author has a rather simple motto that describes niche markets.  "The farther a product is from reality, the more you can charge for it."  As an example of niche products, Meadowood developed a line of "designer hay bales" as display fixtures for the Urban Cowboy era. Straw sells for $45 a ton or about $2.00 per bale while a set of artificial hay bales sells for $250.00.  The set of bales are designed to ship by UPS, as are all of the Meadowood display risers and fixtures.  The strength to weight of MeadowBoardTM facilitates more display risers per shipping set than items made from wood products of comparable strength and cost.

Niche markets help to overcome inherent marketing problems of straw resulting from a negative perception of residue or "least worth".  No connotation in the English language is favorable to straw. Folklore, Mythology, and Fairy Tales bring youngsters these attitudes at an early age with such stories as the little pig's house of straw, and the straw man in the Wizard of OZ. 

Flammability is a historical concern of straw.  Most board products from straw actually have low flammability.  Meadowood products are Class C or III, which means that they will not support combustion without an external flame.  The perception must be overcome with marketing.

As an example of straw perception, during an early sales trip the author had captured the enthusiasm of a prospective building products retailer for our lightweight, but strong and visually attractive product.  The dealer was ready to place an order until he asked the name of the product, and the author responded "strawboard".  The enthusiasm drained from his face, and he suggested the author try the competitor down the street, who turned out to be a low-end panel and seconds lumberyard. Renaming the company to Meadowood Industries and the standard product to MeadowBoardTM was a very helpful early step to overcome the straw objections.

Niche markets offer a convenient method of introducing Ag-board products as decorative items or as components of finished goods. The approach demonstrates the appearance or utility value to future customers when they view, use, or purchase the finished item. The method can serve as a secondary or cooperative marketing tool.  The strength-to-weight, appearance value, and low emissions of various types of Ag board offers advantages over wood products in some applications.  Applications that can exploit these benefits require greater promotional investment and closer customer contact to extract the premium price benefits of specialty niche markets.

Marketing and the Ag-board Industry

Through the bootstrap school of hard knocks and the ongoing due diligence of the Ag-board industry in North America, the author finds that certain patterns have emerged that parallel the Meadowood experience.  It has become apparent that the future success of an emerging Ag-board industry must rely not only on technology and economics, but must do more market pioneering than the wood products industry to gain entry into their market.

A common difficulty with all of the current agricultural materials based board plants in North America is a shortage of funds to cover the higher cost of product certification and market pioneering necessary to educate prospective consumers about the benefits of the unique new products. Using multiple new technologies has generally resulted in extended and costly startup cycles without the benefit of a deep pocket parent such as in large companies of the wood products industry.  Plant construction cost overruns have also been a factor in reducing the capital available for marketing when the plants start production.  The struggle to survive has resulted in the reckless introduction of low quality "starter board" into intended finished product markets.  The starter board introduction has established a low quality expectation for Ag-board, which severely damages the finished market for others in the industry. First impressions are hard to change. These shortfalls in marketing funding have contributed to hundreds of million of dollars in losses for investors in the Ag-board industry.

Part of the reason for the lack of marketing capital is the difficulty of financing this non-collateral expense.  Numerous governmental programs are intended to assist with the manufacturing of products from agricultural materials, particularly crop residue.  However, these programs are focused on the same areas as conventional financing. They require secured collateral assets and personal guarantees, which do not include funds for marketing.

Completion or "takeout" financing is also generally based on plant value after completion of construction and equipment installation without consideration for market entry capitalization.  Ag-board plants are purpose-built facilities, with the actual equipment value possibly as low as 30% of the plant construction cost. This may result in an actual salvage value that is little more than the cost of demolition and equipment removal.  The irony is that without sufficient soft or unsecured capital for production startup, and marketing being acquired at the project beginning, the chance then for repayment or recovery of the loans against the "hard" collateral assets becomes much lower or moot.

Ag-board Industry Support

Government agency directives have created a demand for materials such as Ag-board at a time when the majority of Ag-board plants have failed or are troubled.  The environmental drive for forest preservation and sustainable agriculture has led to many local, state, and federal mandates that new construction use a percentage of building and decorative materials that are defined as bio-based, certified non-wood, refuse derived, sustainable or other similar description.  The Clinton executive order 13134 of April 2000 for bio-based products and bio-energy is an example of these mandates, as are San Francisco, New York and other city ordinances requiring use of bio-based materials.  These programs have high "feel good" value but have not had much positive impact on the price that the consumer is willing to pay without further education (which is an additional cost).

It has been demonstrated over and over that brokers, distributors, manufacturers representatives, and dealers cannot be relied upon to educate the customer. The manufacturer must educate the consumer so they will know to ask for the products.  Large building supply chain stores such as Home Depot are apparent supporters of sustainable, "green", and certified building products. Yet when the author asks, in the stores, for agricultural derived building materials, few sales people have knowledge of these types of products and little inventory is on the shelves.  The shelves are empty in part because supply has not been reliable due to Ag-board plant production startup or closure problems.  Unless the manufacturers of Ag-board incur the costs of educating the customer, the sales will not be made in quantities sufficient to survive.

Numerous environmental organizations contact our company with a desire to list our product in their "green" directories.  These requests are most intriguing when one considers the number of people interested in promoting "green" ag-products, yet so few of these people understanding why not many products are available.  The desire for "green" products, and the desire for an end of open field burning is the regulatory engine that was expected to create an Ag-board industry.  Very little has been done by "green" organizations to understand and determine how or who will pay the product certification and market entry price to bring these new products to full market acceptance. This competitive, low cost, and high quality market is dominated by the large-scale, successful and entrenched wood products industry.  When members of these "green" organizations are addressed about participating in market entry financing for Ag-board plants, (backing their convictions with their pocket book), the general retort is that financing of "industry" is not the job of NGOs.

The current low Ag-board business survival record, while attempting to pioneer new markets, indicates a need for greater understanding and cooperation by environmentalists, in order for this industry to grow and benefit the environment.

Current Alternate Fibers Plants And Status

The following tables are used with permission, but slightly updated from a presentation by Donald Lengel, PE, entitled Ag-Fiber "Dot Gone" - A Litany of Failure presented at the 35th International Particleboard/Composite Material Symposium at Washington State Univ. Pullman, WA, April 2001.

Table 1. Status of Panelboard Plants in the Alternate Fibers Industry.

A Roll Call of Failure



Plants                       Location           Approx. Investment US       Status April 2001

Stramit type                       Montana            $    2,000,000                       Not completed

Vacherie                           Louisiana          $20,000,000                        Closed in 1970's

CenKan Corp.                    Kansas             $  10,000,000                      Acquired by

                                                                                                            Prairie Forest Products

                                                                                                            (Resold to new owners)

Natuall Fiberboard              Kansas             $   1,500,000                       Sold  to Prairie Forest Products


Agriboard Industries           Texas                $  13,000,000                      Restart - Financial Reorg.

      (Stramit type)

AgraFibre                          Alberta, Can      $  30,000,000                      Bankrupt-Sold $ 0.07 on the $

                                                                                                            Converting to Wood

Compak / WestGrain          Alberta, Can      $  16,000,000                      Closed - Financial Reorg.

Phenix Biocomposites         Minnesota          $  62,000,000                      Restart - Financial Reorg.

                                                                 (including R&D)

Isobord International          Manitoba, Can   $100,000,000                      Restart - Financial Reorg.

                                            Losses          $  50,000,000 +                   Purchased by Dow


Plants                       Location           Approx. Investment US       Status April 2001

CanFibre                           California          $120,000,000                     Closed - for Sale

CanFibre                           New York          $120,000,000                     In Start up - for Sale


A Tentative List of Survivors

Primeboard                                 North Dakota                                       Wheat straw

Fibertech                                    California                                            Rice straw

Acadia                                        Louisiana                                            Bagasse

Pacific Northwest Fibers              Idaho                                                  Bluegrass straw

Prairie Forest Products                Kansas                                               Wheat straw

DuraGreen                                  Hawaii                                                Bagasse


Author Lengel states: "In some cases the plants have been refinanced a couple of times, or have been taken over by new owners anxious to spend money.  A couple of notes of caution on this last point: fire sale plant prices do not lower production costs much; struggling plants have trouble maintaining quality.  Such difficulties can further adversely affect the entire industry."

Science and Technology of Ag-Board

The science and technology of making quality board, panels and molded products from agricultural materials, primarily straw and bagasse, is not a mystery to those skilled in the art of board manufacturing. Supplying quality raw material is not a mystery to commercial hay, straw, and livestock operators.  Comprehensive due diligence must include those "skilled in the art".

Major composite wood board manufacturers have well equipped laboratories that have experimented privately and publicly with agricultural derived raw materials.  A few are using a small percentage of straw in their particleboard or MDF products.  Other wood products companies contract with universities or technical institutes for research.  All of the major manufacturers of composite board equipment have done test work with Ag-fibers.  Each major binder or adhesive manufacturer has completed work in their own laboratories with various agricultural materials.  Papers presented over the course of 35 years at the annual International Particleboard/Composite Materials Symposium at Washington State University (WSU), in Pullman Washington, reference many programs aimed at non-wood utilization.  For example, work was done in Germany with Isocyanate on straw as far back as 1947 (Eckert and Herr).  Urea and Phenol resins have been used on bagasse since the 1960's at Tablopan in Venezuela as a dry process. Celotex has made wet process fiberboard from Louisiana bagasse since 1921. The Stramit process originated during 1933 in Sweden. Masonite explored steam explosion processes in 1926.  Extensive research work was conducted on agricultural materials in North America and Europe in the 1970's when open field burning first became an environmental focus issue. Manufacturing Ag-board is not a new process but it does have room for substantial improvement to become viable. Recognizing the material as a fibrous stem, to make fibers rather than particles will be a positive step in the right direction.

Some of those preparing Ag-board business plans would do well to learn from experienced commercial hay and straw operators in the livestock industry who understand what determines the cost and market price of collection, transportation and storage.  Chip prices for the wood products industry are influenced by the demand for wood composite products, the paper industry and bioenergy value, but are tempered by the pressures of environmental regulation.  The large wood product manufacturers hedge the market with processor owned forest resources.  Straw, on the other hand, is normally an annually harvested resource that is heavily influenced by local seasonal environmental conditions like most agricultural commodities.  Weather generally dictates a relatively short time window for collection of straw after crop harvest.  In some areas, during some years, the "weather window" may be as short as 10 days.  Weather requires that a form of covered storage be used to maintain optimum raw material quality.  These differences bring a greater level of uncertainty to the supply and cost of straw as compared to wood. Such concerns also dictate greater care in cost modeling for new Ag-board plants to compensate for storage cost and yield losses from environmental factors and vermin depredation.  Future processes may also become competing users of agricultural materials for cellulosic ethanol, or fractionated higher value fibers and other chemicals.

Ag-board plant promoters bemoan that their projects would work if they "could just lower the cost of collection, transportation, and payment to the grower".  Considerable funds have been expended by industry and government agencies for studies and demonstration equipment to lower these costs.  Many of these transportation and densification studies have been conducted as though the requirements for Bio-products and Bio-energy are unique or different from existing hay, straw, and feed milling industry requirements.  Some act as though the drive to reduce cost and improve efficiency are new to agriculture and have not influenced the innovations in mechanical processes since the McCormick binder.  Moving hay and straw hundreds of miles has been common in California since the late 1940's.  High protein alfalfa hay of intermountain California, Nevada, and Oregon requires transport for the dairy, feed mill and horse hay markets of Petaluma, the Central Valley and Chino.  Three-wire hand tie, then automatic tie twine bales were first designed for long distance transport in the early 1950's.  Cost driven advancements for the transport hay market have transitioned through bale accumulators, automatic bale wagons, hay squeezes and the newer large bale sizes to speed truck loading and increase load density.  Bale compressors are now used for the hay and straw export market.  The transport hay market is larger and more developed than the Ag-board industry is likely to become.  Focusing on new purpose-built collection and transport equipment to reduce cost may be less effective than focusing greater emphasis on securing quality raw material for use to produce and market quality niche products.

Wood composite board equipment is the general basis for Ag-board plants from the raw material preparation system forward. New equipment with performance guarantees may be the most desirable but may not be the most cost effective or have the versatility for a niche Ag-board facility. Composite wood product plant equipment that has been proven in use, but that became surplus because of economy of scale for wood, is available at relatively low cost. Such used equipment can be renovated and brought into production at costs that are often a small percentage of new. Arguments can be made for single opening, multi-opening, or continuous presses. A multi-opening press offers wide versatility for niche market Ag-board production.

Product and Market Testing

Another method to assist market pioneering of Ag-board, that has generally been overlooked, is to use an existing wood product plant to prove full-scale process and product viability before construction or conversion of a new plant. This due diligence method will provide a quantity of quality products to use in actual market testing, and initial sales, which will give factual feedback for business plan assumptions. The pilot production could provide initial sales. Many view this approach as too expensive, that is, until they become yet another new plant closure statistic before full startup. Then, the worth of such valuation testing becomes apparent. The president of an established wood products company recently offered to do full-scale demonstration testing with straw, for the promoter of a future Ag-board plant. The promoter refused this prudent offer.

The author is currently consulting with a group that is planning to refurbish an idle wood product MDF plant and return it to operational profitability.  The plan includes part time use of the plant as a full-scale pilot facility by a nonprofit institute for development, demonstration and initial marketing testing of feed stocks from agricultural crops, waste wood and other refuse materials.

Asian Interests

The interest and growing pains in the Ag-board industry are not limited to North America and Europe.  The author had the privilege of being invited by a conglomerate enterprise in Northeastern China to visit and to explore the possibilities of producing board and other building materials from rice straw and other regional annual crops.  The trip during May of 2000 included investigations of raw material resources, manufacturing plant sites, construction methods, building materials markets, and tours of the region.  The author also visited Southern China to study the building materials markets, construction practices and furniture trades that are unique to the southern areas.  There is strong potential for viable Ag-board production in China.

Improving standards of living and heightened concerns about air pollution in China are resulting in a shift in agricultural regions from the traditional use of rice straw to coal and gas for home fuel.  This shift and other factors are beginning to create a surplus of straw.  Available wood resources in China are diminishing.  Flood erosion control regulations and immature tree farms are limiting timber harvest while demand for building materials is increasing.  At the same time, certain governmental policies in China are changing to encourage the use of wood alternatives and toward "light wall" construction rather than the traditional brick, stone and concrete.

Straw delivered to a composite board plant as a raw material costs less in China than forest derived materials.  The relative difference between the costs of these raw materials appears to be widening at a greater rate in China, than in North America and Europe.  The need for viable Ag-board plants is increasing due to the growing availability of straw resources, compounded with an expending demand for both construction and industrial building materials.

Pressure in China for new Ag-board facilities results from:

·        The current drought in the region

·        The new environmental polices that have reduced timber harvest

·        The shift from traditional mud or brick to light wall construction

·        The increasing need for building materials to improve living standards

·        The growing demand for building materials for home improvement, due to higher incomes

·        The need for air pollution control

·        Government incentive programs for ag-based building materials

Ag-board related industries have a lengthy history in China, India and other parts of Asia.  However, the indigenous straw type board industry suffers from a reputation of low product quality to supply very low priced markets. Such negative market perceptions must be factored into new business plans as a marketing cost to raise product standards and image. Otherwise, new plants will suffer similar startup struggles and failure cycles as those in North America.

Right Sizing Plants

Developing optimum sized first plants in China and other emerging economies requires consideration of many factors that are much different than for the North American and European markets.  Assuring the success of the first plant is a primary concern for future business and the success of the industry.  The chances of success are greatly increased with careful evaluation and planning prior to entering into agreements, building a facility, and pioneering new markets.

The major builders of new board plant equipment are concentrated in Europe and North America. These equipment suppliers have developed a very strong inclination that bigger is better and more efficient. This has resulted in some costly failures, damaged reputations, and international legal battles that have been less than beneficial to the emerging Asian Ag-board industry. Service and support are often a disputed cost/values. Transportation infrastructure for delivery of raw materials is much different in heavily populated agricultural regions of the developing world, with narrow congested roads and bundles rather than bales as the means of material collection and delivery.  Government policy to create employment or improve local access to resources also influences plant size. Infrastructure of local areas must be considered as a function of working radius for optimal plant size to temper the inclination to "go big".

Larger plants are most efficient when operating around the clock. However, they may not be profitable when local raw material cannot be efficiently supplied for more than one or two shifts due to constraints of transport infrastructure. Starting and stopping large press lines and boilers also increases maintenance due to the "cold iron" stress of frequent heating and cooling cycles. 

Packaged panelboard plants have some potential in the industry, however they must be robust enough to make reliable quality products on a consistent basis.  Some new small packaged plants, currently being sold, have found themselves on the used market so quickly that they have not been able to establish a reputation of quality product and durable operation.  Service for these plants have been sporadic.  At least one group, the author is aware of, is developing a more robust packaged system intended for setup in regions with limited infrastructure.

Multiple Plants

Some equipment vendors, binder suppliers, and new plant promoters in the Ag-board industry are so focused on building multiple plants that very few have concentrated on providing quality products and building a market that can insure the survival of the first plant.  Several prospective plant builders have proclaimed to the author "we can make millions together" by licensing the Meadowood technology and building multiple plants.  When the author inquires as to how much these promoters are willing to invest in product marketing to assure survival of the first plant, the usual answer is a confused gaze.

Finding the cost balance for plant design, engineering, service, and financing to spread over multiple facilities is important from the builder's standpoint.  However, pioneering a successful market for the first plant is a key to the success of multiple plants for a stable Ag-board industry.

Seeds of Success

Primeboard of North Dakota is the longest operating of the recent full production dry process Ag-board plants in North America.  They started early with strong financing, and had a captive market for a good portion of the production to help weather the tribulations of startup.  The president of Primeboard recounted to the author that market development remains as a key factor in their continued success.  They emphasize that distribution of "starter board" only outside of future finished product market channels is crucial to establishing a quality reputation.  Quality products and strong marketing will be necessary to establish an Ag-board industry as a viable supplier to the construction, industrial, and do-it-yourself (DYI) consumer market.

Isocyanate and related polyurethane resin derivatives are an expensive but effective binder for agricultural materials. The polyurethane resin industry is so large that the potential market share of an agricultural materials binder is relatively very small even if this were the only type of binder used. Therefore, forces outside of the composite board industry will generally drive the binder price. Several binder suppliers have previously made strong commitments to the industry but later withdrew for various economic reasons. Interest is now renewing by a few suppliers.

A subsidiary of the Dow Chemical Company has acquired the restructured Isobord International plant in Manitoba with the stated intention of using it as a platform for entering the composite panel market.  The Dow entry may signal a significant step in recognition of potential resin use in the Ag-board industry. An established Ag-board industry will encourage competitive suppliers.


The owners of Meadowood Industries, Inc. have commitment to development, production and marketing of high value structural and decorative products from ryegrass and other crops. Others have similar objectives to increase agricultural sustainability with new viable products and benefits to the environment. Experience has demonstrated a critical need for viable agricultural biobased products that are introduced and sold with proper and extensive marketing. Securing long-term capital commitments for product certification and marketing has been an extremely difficult factor in completing viable business plans for expansion. Marketing funding is critical for a high likelihood of success with any Ag-board or biobased plant.

Many Ag-board production and economic problems are opportunities waiting to be resolved by engineers. However, engineers must keep marketing as part of the solution.  Recent history has proven several times, that a successful Ag-board industry will require solid due diligence during initial planning, sound engineering practices, quality products, and strong well-funded marketing programs to assure long-term reliable use of agricultural resources. Environmental agencies and NGOs must participate in infrastructure and marketing to become part of the solution.

Building a successful Ag-board industry demands the growing of credibility with viable products, consistent quality and effective marketing strategies.


The author thanks Don Lengel, PE, and recommends his recent Ag-fibers papers including, Ag-Fiber Dot Gone: A Litany of Failure. PanelWorld Magazine July 2001: 8-9, 34-38. Montgomery, AL. (dlengel@uswest.net).  PanelWorld, July 2001 also reports on the 35th International Particleboard/Composite Material Symposium at Washington State University April 2001.


Barbour and Groner. 1973. The Polyisocyanate Straw Particle Board Process. Report. Oregon State Univ.

Eckert, P. and P. Herr. 1947. Formation of Bridged Compounds in Cellulose Fibers with Diisocyanates. Kunstseide und Zellwelle, 25, 204-210

Gorzell, K E. 1999a. Board Construction from Ryegrass Gains Interest. PanelWorld Magazine November 1999: 16-17. Montgomery, AL.

Particleboard/Composite Materials Symposium Proceedings, #1-35. 1967-2001. Forest Products Society. Madison, WI.


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