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Published May 10, 2010, 03:36 PM

Elevators expanding capacity

NEW ROCKFORD, N.D. — It’ll now be mid-July before Gavilon Grain L.L.C. opens the doors for its new grain terminal in New Rockford, N.D. The facility sets a new high-water mark for loading capacity at 120 cars, and another challenge for existing local elevators.

By: Mikkel Pates, Agweek

NEW ROCKFORD, N.D. — It’ll now be mid-July before Gavilon Grain L.L.C. opens the doors for its new grain terminal in New Rockford, N.D. The facility sets a new high-water mark for loading capacity at 120 cars, and another challenge for existing local elevators.

Eric Berge, the new elevator’s manager, says half of the elevator’s handle probably will be wheat and the rest corn and soybeans. The elevator was in a single-slip construction, including a “six-pack” of 36-foot diameter structures, and a set of two, 76-foot diameter bins — all 140 feet tall.

Berge says many of the trains the elevator will handle initially will be the more conventional 110-car shuttles, but the 120-car capacity will be unusual.

“It’s kind of the new thing now,” says Berge, who has worked for the Gavilon-Peavey group in locations in North Dakota, New Mexico and Idaho. Changes in railroad engine power technology allow for 120 cars to more easily get across the mountains to the West Coast.

In New Rockford, the difference is simply some extra length to the side tracks, says Berge, a native of Fergus Falls, Minn., and an agricultural economics graduate from North Dakota State University in Fargo.

Berge started contacting farmers on Gavilon’s behalf last summer.

“It’s good for the community,” Berge says. “It’s going to be good. The farmers are going too love it — another competing grain bid.”

Speed and efficiency

Loading will be fast and efficient, allowing farmers to get back to the farms and fields efficiently.

Berge says advances in seed technology and improved rainfall in recent years have been two of the factors affecting an increase in bushels, which expands the market for grain handling.

Gavilon already has elevator operations in Grand Forks, Valley City, Jamestown and Carrington. In Minnesota, Gavilon has facilities in Hayward and Red Rock. In Montana, the company operates in Billings, Fairview, Hardin, Miles City, Moore and Wolf Point.

Gavilon Grain L.L.C. conducts business as Peavey Co. and is a subsidiary of the Gavilon Group L.L.C. Ospraie Special Opportunities fund, an affiliate of Ospraie Management, in June 2008 bought commodity trading and merchandising operations of ConAgra Foods Inc. in a $2.1 billion deal, and named the business Gavilon, according to wire reports at the time.

Steve Strege, executive vice president of the North Dakota Grain Dealers Association, says there are now about 50 of the 100- and 110-car unit loaders, with BNSF Railway typically having 110-car loaders and Canadian Pacific Railway having 100-car loaders.

Strege says the length of the trains is in part determined by the number of engines to pull them, and the length of the sidings railroads must construct to allow the trains to meet and pass each other. He says CP Railway built eight or more of the 7,000-foot sidings constructed between Portal, N.D., and Glenwood, N.D.

“That increased the capacity for their system significantly,” he says.

John Rick, manager of the nearby Equity Co-op Elevator Co. in Sheyenne, N.D., says the Gavilon facility is yet another factor in a market that already includes 110-car loaders in Carrington, Fessenden, Leeds and Devils Lake.

Rick says Berge has told him that the new facility will need to handle 27 million bushels a year, and he wonders whether the smaller elevators will get bids, too.

“He’s going to come out swinging the first year,” Rick says. “We’re not panicking but we’re a little worried. We’ll just have to sharpen our pencil a little, gear up and go after specialty products and agronomy.”

He thinks Equity can be competitive on corn and wheat, but “it’s the beans that might be a little hard to swallow.”

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