WILLMAR - The 14 ethanol plants in central and southern Minnesota produce 300 million gallons of ethanol for motor fuel a year and 640,000 tons of dried distillers grain a year.

DDG is an ethanol byproduct that is fed to livestock. The ethanol industry is projected to expand. The tons of DDG are also expected to increase. Finding a use for all that DDG will be a challenge for the ethanol industry.

A new organization representing farmers and farm organizations in the state believes an expanded livestock industry in western Minnesota would provide a market for dried distillers grain.

The organization, called the Livestock Development Authority Inc., was formed in July to promote new and expanding livestock and dairy farms in 25 western Minnesota counties. The region stretches from Clay and Becker counties on the north, Stearns and Renville counties on the east, Rock, Nobles and Jackson counties on the south, and to the South Dakota border on the west.

LDA supporters say livestock is the original value-added industry and could bring increased prosperity to a region of the state where population and economic activity are declining.

LDA promoters believe the area is suited for more livestock and dairy farms because human population density and livestock density are low, the farmland is excellent, and the area borders Interstate 29, which they say provides an advantage in getting products to market. The area is less susceptible to groundwater pollution, and dairy farmers would have a market for their milk at a proposed cheese plant at Lake Norden in eastern South Dakota.

LDA board member and farmer Curt Watson of Renville said the organization is supported by statewide groups and associations. The LDA, among other things, hopes to increase the number of jobs and enhance the agricultural economy and businesses that depend on livestock.

Watson said the LDA will communicate a positive pro-livestock message, and he said the public "must understand and appreciate the benefits of supporting a strong, vibrant and growing livestock industry.'' The LDA, he said, plans to work with local authorities to obtain the necessary support for expanding or starting new production facilities.

"Yes, believe it or not, there are agricultural and livestock businesses that want to locate in Minnesota. They still do,'' he said.

Watson was among 150 community leaders, economic developers, farmers, bankers, county officials and others at the second annual Investing in Minnesota Agriculture Conference held Tuesday at the Willmar Conference Center.

They discussed ways to develop business opportunities for agriculture and rural Minnesota, focused on major developments in livestock and value-added agriculture and talked about policies and ways to stimulate rural entrepreneurs.

Perry Aasness, assistant commissioner with the Minnesota Department of Agriculture, said the livestock industry has declined as farmers have specialized in growing grain crops. However, the move away from diversification has implications, said Aasness.

"We're trying to see what we can do to turn that around a little bit,'' he told the Tribune.

In the 25 counties being promoted by the LDA, the number of beef cows has fallen from 189,000 in 1980 to 117,000 in 2002, and the number of dairy cows has declined from 246,000 in 1980 to 165,000 in 2000. Similar declines have occurred statewide.

No new cheese processing plants have been built in Minnesota during the past 34 years, and 12 dairy plants in the state have closed.

Grain production in the 25-county area has risen, however. Soybeans doubled from 73.7 million bushels in 1980 to 145.9 million bushels in 2000, and corn production rose from 250.9 million bushels in 1980 to 465.13 million bushels in 2000. More than half of the production is shipped out of the state.

Hog production is up slightly from 2,038,000 in 1980 to 2,361,000 in 2000. Minnesota is first in the nation in turkey production and eighth in egg production.

Minnesota Commissioner of Agriculture Gene Hugoson said livestock is the original value-added industry. In every county with livestock activity, grain prices will be higher, he said.