The Amber Wave complex in Phillipsburg, Kansas, US, is located in the heart of hard red winter wheat country.
| Credit: ©AMBER WAVEAmber Wave fully utilizing each kernel
PHILLIPSBURG, KANSAS, US — Enhancing the reliability of the US vital wheat gluten supply while elevating the sustainability of biofuel are foundational principles behind a major new wheat processing investment in western Kansas, according to the top executives of Amber Wave LLC.
Underpinned by these principles, Summit Agricultural Group, a privately-held agribusiness operator and investment manager based in Alden, Iowa, US, has spent more than a quarter billion dollars to actualize their vision for Amber Wave, an effort that entailed the acquisition of an ethanol plant in Phillipsburg, Kansas, US, and the construction of the largest wheat gluten extraction plant in North America and the second largest flour mill ever built in the United States as a greenfield.
Established in 2021, Amber Wave’s roots in Phillipsburg date back to the early 2000s when a group of growers established Prairie Horizon Agri Energy as a corn ethanol plant, one of many ethanol plants built across the United States during this period.
In the mid-2010s, the business attracted the attention of Summit. Established in the early 2000s, Summit’s focus has been on investing in farming and renewable fuels. Summit during the 2010s was exploring a wide variety of approaches toward renewable fuels.
Members of the Amber Wave team at the Phillipsburg, Kansas, facility are, from left: Ryan Hemingson, VP of sales; Maggie James, marketing; Millie Feldman, business development; Steve Adams, CEO; and Mike Shield, plant manager, food ingredients.
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Summit saw promise in producing vital wheat gluten as a high-value primary product and an ethanol co-product from the wastewater starch slurry as a way to raise the sustainability bar and reduce the carbon impact compared to conventional corn ethanol production.
“We’re making ethanol from a wastewater starch coming off a functional food ingredient from wheat,” said Randy Cimorelli, chief executive officer of Amber Wave. “Wheat offers numerous benefits over corn when it comes to achieving this objective.”
The pressure to lower the carbon footprint of biofuels has been incessant, and Cimorelli called Summit a “leader in this field.” Longer term, Summit has its eyes set on a developing market in aviation biofuels.
Wheat offers numerous benefits over corn when it comes to achieving this objective, he said.
In shifting to wheat, Amber Wave creates a hierarchy in which 10% of the wheat kernel becomes a value-added product, vital wheat gluten; about 70% is used to produce ethanol and the balance is sold as feed.
“When you make corn ethanol, there’s no other primary product,” Cimorelli said. “There’s just distillers’ grains and there’s- some corn oil (just under 2 pounds), but you’re buying a bushel of corn with the intention of making about 2.8 gallons of ethanol. In this case, we’re buying the bushel of wheat to make as much as 6 pounds of gluten and 2.6 gallons of ethanol.”
The new flour mill features Sangati Berga milling equipment.
Reinforcing Summit’s conviction that its wheat-based model would be successful was the reality 85% of vital wheat gluten in the United States was imported. Particularly after the disruptions in the aftermath of the pandemic, Summit believed US wheat gluten users would be strongly interested in diversifying their sources to include additional domestic suppliers.
Ryan Hemingson, vice president of sales, said supply chains have improved over the past year or so following the pandemic, but even a brief port strike during the fall reinforced the sentiment among users that there is value to balancing imports with access to domestic supplies.
“What we’re trying to do is just serve as the domestic supply chain solution,” Hemingson said.
As Summit’s plans solidified in 2018-19, it began looking at small ethanol producers around the United States. The opportunity in Phillipsburg with Prairie Horizon Agri Energy eventually “presented itself,” Cimorelli said.
“So here it is in wheat country, and we gave them an opportunity to sell that company,” he said. “With the ethanol piece in place, we knew that was going to fuel the need to build the mill and to build the extraction plant, which we did.”
The acquisition of the Prairie Horizon Agri Energy facility closed in June 2021, and engineering work and building plans for the rest of the project were completed later that year. The flour mill and gluten extraction plant were completed in October 2023.
Expeditiously building the plant in a sparsely populated part of Kansas in the wake of the pandemic amid material supply shortages was no easy feat, Cimorelli said.
Amber Wave offers vital wheat gluten in 50-pound bags.
|“One of the biggest challenges from a construction standpoint, was finding crews to come to Phillipsburg,” he said. “We had to recruit workers from cities where they had opportunities to continue to work and live in the cities, live at home. So now they’re coming here and living in Phillipsburg until the project was done.”
Switching to wheat from corn as the ethanol plant’s feedstock came with numerous advantages. Located 60 miles north of Hays in north central Kansas, Phillipsburg is situated in the heart of hard red winter wheat country. Amber Wave purchases most of the grain it mills, about 58,000 bushels per day, from sources within 200 miles of the facility, Cimorelli said.
“We have the ability to reach much further obviously, but we don’t really have to,” he said. “We’re well served by rail. We’re on the Kyle, and we have a dual line access. We have the ability to bring in truck and bring in rail as well. We’re kind of perfectly located from that perspective.”
Amber Wave’s wheat procurement is tailored toward the distinctive wheat market economy of central Kansas. The nature of grain storage in Kansas gives local cooperatives heightened importance in the market. In contrast to other parts of the country where farm storage of wheat plays a large role, Kansas growers sell most of their wheat at harvest (March 2024 US Department of Agriculture data showed 4% of Kansas wheat stocks held on farm, versus 57% in North Dakota).
Meanwhile, Amber Wave has 900,000 bushels of grain storage on its property, modest for a mill that easily grinds about 1.5 million bus of wheat per month. Amber Wave’s relationships with co-ops works well.
“Growers rely on the co-ops to take their product,” said Steve Adams, chief operating officer. “That’s where the storage is. With our being so close to the wheat, it works.”
Millfeed from the flour mill and distillers’ grains from the ethanol plant are blended into a feed ingredient with a ready market in the region’s burgeoning feedlot market.
“This area of the state has a lot of feed yards,” Hemingson said. “So fortunately there’s a good outlet pretty much all the time for our feed products.”
A new business gradually increasing production, Cimorelli said Amber Wave is pleased with its progress to date. In 2024, while demand for vital wheat gluten ramped up, the company operated the ethanol plant at full capacity, blending its wheat starch feedstock for ethanol with corn as needed. In 2025, both the gluten extraction and the ethanol plants will operate at full capacity and ethanol will be 100% wastewater wheat based.
Looking forward, the Amber Wave complex is set up for expansion, both in the flour mill (by adding capacity to the C unit) and the vital wheat gluten extraction plant. Cimorelli said the existing packaging system has capacity far in excess of what the vital wheat gluten plant currently is able to produce.
Vital wheat gluten at the Amber Wave facility is loaded into a bulk tanker.
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The multiple milling units and extraction systems within the plant give Amber Wave valuable redundancy, giving customers greater confidence in the security of supply, Cimorelli said.
“In our case, anytime anything goes down, we just toggle over to the other line,” he said. “So the A mill, the B mill, the C mill, if you want to do repairs, you want to have down time, you can isolate it to each line. In extraction we have the three lines, in the drying, we have the two dryers. So we have that redundancy in a way to allow us to have operating efficiency and optimization.”
In Summit, Amber Wave has an investor that is “very different from the typical private equity firm,” Cimorelli said. While ultimately selling a business “sits behind every investor’s goal,” the mindset of Summit, funded by growers, is different, he said.
“Their portfolio companies are not the type you just buy and flip,” he said. “This is not a flip it kind of business. This is a build it, create a forever company, and that’s what we are doing.”