Insect farm to make animal feed in North Dakota

North Dakota is a leading producer in many ag specialty crops, such as sunflowers, pinto beans and honeybees. 

Get ready to add black soldier fly larvae to that list. 

With state grants and Mark Cuban of “Shark Tank” as an investor, Oregon-based Chapul Farms is on schedule to break ground in the spring on its first facility to create high-protein animal feed from insects. 

The bug farm in the Spiritwood Energy Park east of Jamestown, will use the byproduct from a neighboring ethanol plant to feed the larvae of black soldier flies, then process that larvae into a protein powder for pet food or livestock feed. Waste from the larvae can be used as fertilizer. 

Todd Severson is the head of project management for Chapul Farms. 

“We’re just trying to replicate nature and doing it in a way that keeps the bugs happy and keeps the humans and our soil happy,” Severson said. 

Severson said Chapul Farms will be using a byproduct of turning corn into ethanol from the Dakota Spirit ethanol plant, part of Harvestone, to feed and grow the black soldier fly larvae.  

It also will be using wet pulp from sugar beets processed by American Crystal Sugar to feed the larvae. 

Severson called it a tray system, where the wet feed is placed on a tray; the young larvae are added and feed for about seven days. Then, the “frass,” or bug poop, is sifted out for fertilizer and the larvae are dried and ground into high protein powder. 

In one week, the larvae can convert 1 ton of food waste into 200 pounds of animal feed and 400 pounds of fertilizer, according to Chapul Farms. 

Severson said they have commitments for buyers on both the protein powder and the fertilizer but are still finalizing contracts. 

“The majority of the adoption in the market is in the pet and aqua markets and where the price point is holding a little higher,” Severson said, but the backyard chickens and poultry market also shows promise. 

Ethanol plant benefits

The operation will also benefit Dakota Spirit, which typically has to dry the byproducts, known as distillers grains, to be able to ship them off by rail to be used as livestock feed. 

Jeff Zueger, the CEO of Harvestone, said having a business next door that can use the grains while they are still wet will cut the ethanol plant’s energy use. That will lower the plant’s carbon intensity score, helping it potentially sell fuel for a premium price in markets, such as California, that have set a low-carbon fuel standard. 

“We think that it’s a nice addition to the energy park,” Zueger said. “It’s a good use of some of the existing products that are produced to do additional value-added agriculture and produce a unique product.” 

Dakota Spirit sells some distillers grains to livestock operations in the area, but Zueger said about 90% of the feed byproduct is shipped out by rail and needs to be dried to be shipped. The drying process accounts for about half of the energy used by the plant. 

“So it’s sort of a win-win for us not having to expend energy and then also allowing us to lower the carbon intensity for the ethanol that we’re producing,” Zueger said. 

Construction and jobs

Chapul Farms plans to break ground as soon as the weather allows in 2024 and then it will be about 18 months before it will be up and running. 

Severson estimates the plant will create 50 to 60 jobs.

“And these will be more like ag tech jobs,” Severson said. “We’ll have a handful of biologists, entomologists and some plant managers, and then some shift workers dealing with all the equipment.”

Chapul picked the Spiritwood site in part because North Dakota has an excess of the kind of feedstock it needs. Severson also said the state has been helpful. 

“North Dakota has just been so upfront-development friendly with resources and things like the APUC funds,” Severson said. 

APUC refers to North Dakota’s Agricultural Products Utilization Commission. Chapul Farms recently got its third APUC grant, $32,500 to pay for a life-cycle analysis of the plant, “to see how sustainable it is and quantify some of those metrics,” Severson said. 

Chapul had previously been awarded $52,000 for the concept development phase of the project and $197,000 for the engineering design phase. Chapul Farms has spent roughly $2.5 million on the site-specific design for this project.  

About the black soldier fly

The black soldier fly is commonly found in the United States. The adult flies are less than an inch long and have no mouths or stingers, living long enough to mate and lay eggs before they die.  

The larvae at the Chapul Farms facility will consume about 150 tons of wet feedstock per day, which equals about 50,000 tons per year. 

Severson said the facility in the Spiritwood Energy Park just north of Interstate 94 has scrubbers to deal with smells and would not have any significant impact on the area around it. And there’s little chance that the insects will escape and multiply, Severson said.

“They do all their eating in the larval state, and so they just mate and die as adults, so there’s no risk of an outbreak there,” he said. “They’re beneficial insects in the U.S.”

“They live in our compost piles and our manure piles and our dead animals. They help break them down,” Severson said.

Mark Cuban and ‘Shark Tank’

Chapul Farms was founded by Patrick Crowley. In 2014, he pitched an idea to use crickets as a source of protein for humans on the TV show “Shark Tank,” getting an investment from celebrity businessman Mark Cuban. 

Crowley eventually changed focus from importing cricket powder to growing his own insects and to the animal food market. 

“Cuban reinvested at that point. He’s still very much involved in the project,” Severson said. 

Other investors include NexusPMG, a company that focuses on projects that turn waste into something useful. 

While North Dakota is first in line for a Chapul Farms facility, the company is looking at other locations, including Kentucky, where bourbon distilleries have a waste problem. 

“They’re looking for solutions to get rid of all those spent grains,” Severson said.