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Published February 17, 2014, 10:40 AM

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Chicago supplier sues Energae for $81,000; prosecutors say ND potato farmers spoiled crop, defrauded government for $840,000; mixed results in Minn. corn growers’ survey; and an audit proves Benda helped increase beef plant grant

By: Agweek Staff and Wire Reports,

Chicago supplier sues Energae for $81,000

• A Chicago-area company has filed a breach of contract lawsuit against Energae LP, a Clear Lake, Iowa, “green energy” company that has sought funds from North Dakotans in the past five years. Ingredion Inc. of Westchester, Ill., filed suit in Cerro Gordo County District Court in Mason City, Iowa, on Feb. 6. The company is asking for $81,581 from Energae, a biofuel manufacturer. According to the lawsuit, Energae entered into a contract with Ingredion on Sept. 27, 2012. Ingredion says it provided products to Energae and charged $80,402. It says Energae made one payment of $2,500 on May 20, 2013, but owed $77,902. With interest at 1.5 percent per month, the total owed is $81,581, the suit says. Ingredion is a leading global ingredient solutions provider for food, beverage, brewing, pharmaceutical and industrial customers. Energae made ethanol from various products at a Hopkinton, Iowa, plant that it had invested in. That has been shuttered for several months, as well as a separate plant in Cedar Rapids, Iowa, that turned biofuels into electricity. An Ingredion spokesperson did not immediately return calls from Agweek. Kathryn Barnhill, an attorney for Energae did not immediately return a phone message.

Prosecutors: ND potato farmers spoiled crop, defrauded government for $840,000

• FARGO, N.D. — Federal prosecutors say two North Dakota brothers and potato farmers defrauded the government out of nearly $840,000 by intentionally ruining their crops to collect insurance payments. Aaron Johnson and Derek Johnson, of Northwood, were charged in federal District Court with conspiracy to commit crimes against the U.S. for the alleged potato-spoiling plot in 2006, as well as four counts of making false statements. The brothers’ company, Johnson Potato Co., was also charged. According to the indictment unsealed recently, the Johnson brothers stored unsold potatoes in a Cooperstown, N.D., warehouse after harvest in 2006. The indictment alleges the brothers poured Rid-X into their containers, added rotten potatoes and turned on large portable heaters above 80 degrees “to accelerate the spoilage process in the potatoes.” The pair reported the loss to their insurance company as a result of natural diseases, according to the indictment. Both brothers continued to insist to federal crop insurers that their crops were lost naturally, as recently as May 2009. The Johnson brothers’ attorney could not immediately be reached for comment. They are scheduled for their first court appearance on Feb. 26.

Mixed results in Minn. corn growers’ survey

•' Minnesota corn farmers are cautiously optimistic, but slightly less confident than a year ago, according to an independent survey commissioned by the Minnesota Corn Growers Association. When asked if corn farmers will be better off, worse off or about the same three years from now, 19 percent said better, 31 percent worse and 47 percent the same. Corn farmers were asked the same question in 2012 and 17 percent responded with better, 28 percent worse and 49 percent the same. “Respondents overwhelmingly said lower corn prices were the No. 1 issue facing their farms,” says Ryan Buck, a corn farmer in Goodhue and MCGA president. “Production and input costs were second and third. Overall, we’re proud of where we are today despite obstacles and challenges over the years. I think the general outlook remains positive, but we have to continue addressing the challenges out there, both on the farm and away from the farm.” Corn farmers were less optimistic when it came to the overall direction of agriculture. Fifty-four percent of respondents said things in the ag sector are generally going in the right direction, down from 69 percent in 2012. Thirty-five percent said the ag sector was on the wrong track, up from 18 percent in 2012. “I think a major reason for the increased pessimism was the unnecessarily long and partisan battle over the new farm bill and recent attacks on ethanol and the renewable fuel standard,” says John Mages, a corn farmer in Belgrade who chairs MCGA’s government relations team. “Farmers need certainty in ag policy to plan for the future. A sudden shift on biofuels policy also hurt farmer confidence. With a farm bill finally in place, I’ll be curious to see what these numbers look like two years from now.” The survey involved 300 corn farmers interviewed by telephone from Jan. 21 to 27. The margin of error is 5.8 percent.

Audit: Benda helped increase beef plant grant

• A former economic development official in South Dakota helped his future employer while still holding public office, according to a state audit released Feb. 13. Rich Benda, while serving as director of the Department of Tourism and State Development, on Dec. 23, 2010, amended two Future Fund grants for Northern Beef Packers in Aberdeen, S.D., according to the Department of Legislative Audit report. According to the report, on Dec. 2, 2010, Benda discussed a draft employment contract with SDRC, which recruited foreign investors for NBP in exchange for green cards. A policy should have been in place that would have required Benda “to disclose his future employment plans and remove himself from involvement in subsequent matters relating to NBP,” the report says. The audit didn’t make a determination on a $1 million state grant for construction costs of the plant, $550,000 of which “may have been diverted from its intended purpose,” according to the report. The use of the money is “not within the scope of our audit,” according to the report. An investigation by South Dakota Attorney General Marty Jackley late last year found that the $550,000 was used to pay EB-5 immigration loan monitor feeds. Benda was found dead of a shotgun wound on Oct. 22, 2013. His death was ruled a suicide. NBP opened in October 2012, but declared bankruptcy in July 2013. Its main creditor, California-based White Oak Global Advisors, bought the company late last year.

Briefly . . .

• Bin death: A Napoleon, N.D., man died in a grain bin accident Feb. 10, according to Logan County Sheriff Andrew Bartholomaus. Charles Sperle, 39, was using a grain vacuum to remove corn from a bin. Some of the grain in the upper portions of the bin remained in place. The grain then collapsed and buried Sperle, Bartholomaus says. “The farm is about 4 1/2 miles from Napoleon, and we had fire and rescue there in 8 minutes,” he says. “Every scoop of grain we took out was filled in by two more.”

— Agweek Staff and Wire Reports