Grain-shuttle loader could benefit local co-ops
CHS, a large mid-western cooperative, and Mid-Kansas Cooperative have approved an agreement to form a limited liability company to build and operate a high-speed shuttle-train-loading facility at Canton this year.
The facility will be located on the Union Pacific rail line, two-and-a-half miles west of Canton, and will load 110-car trains bound for export terminals in the Pacific Northwest, Gulf Coast, and Mexico. On-site storage will be more than 3 million bushels.
Agri Producers Inc. manager Stan Utting is concerned the new facility could draw grain deliveries away from its local elevators, thereby reducing its receipts. Agri Producers has six locations including four in northern Marion County.
Cooperative Grain and Supply manager Lyman Adams said the facility would benefit the co-op in the long run, mainly because CG&S is a member of Team Marketing Alliance, which will handle grain-marketing services for the new facility. Agri Producers is not affiliated with TMA.
Adams said the facility will add another market to the area and could result in a slight increase in the area cash bid price.
He acknowledged the facility would impact Cooperative Grain’s Canton location, lowering receipts as some of the grain is diverted to the new facility. He said the positive impact would be that grain would be kept in the area rather than being shipped to Hutchinson, Abilene, or Salina. Transportation costs will be less and there will be a quicker turnaround.
“The train-loader is exciting for TMA, and Cooperative Grain is a part of that,” Adams said.
Flour mills in Newton and Wichita and soybean-processing plants in Emporia and Wichita provide markets for grains produced in the area, Adams said.
“This gives us another option,” he said.
He noted that local elevators still would be needed to handle grain during harvest.
“We want to keep all the grain locally, as much as we can,” he said.
Florence, Peabody, Goessel, and Burns elevators are all branches of MKC.
Dave Christiansen, chief executive officer of Mid-Kansas Co-op, agreed that any cooperative operating within the TMA will benefit from the new facility.
Christiansen said it will provide producers and all ag co-ops access to a cooperative-owned facility, a market that ended when Farmland folded 10 years ago. Construction is expected to begin soon. Christiansen hopes the facility will be completed by the 2014 wheat harvest.
A 110-car train can transport 400,000 bushels of wheat.
CHS is owned by farmers, ranchers, and cooperatives. It distributes energy, crop nutrients, livestock feed, grain, food, and food ingredients worldwide.
CHS also operates petroleum refineries and pipelines, including the NCRA refinery at McPherson, through which it markets Cenex-brand refined fuels, lubricants, and propane.
Agri Producers and Cooperative Grain, as well as Mid-Kansas Coop, are CHS stockholders.