Advertise in Print | Subscriptions
Published July 31, 2014, 04:17 PM

SD elevator full, shuts doors as a result of poor rail service

The Midwest Cooperatives elevator in Pierre, S.D., has closed its doors because it has no more room for storage. Officials say it's a result of the poor rail service.

By: Mikkel Pates, Agweek

PIERRE, S.D. — Horrible. Embarrassing.

That’s how Jeremy Frost, grain merchandising manager for Midwest Cooperatives elevator based in Pierre, S.D., describes wheat marketing, one of the early rail performance casualties in the 2014 harvest campaign.

Midwest Cooperatives has locations at Pierre, Onida, Blunt, Philip, Kadoka, Draper and Highmore, all in South Dakota, and is associated with CHS Inc. The elevator is served largely by the Rapid City, Pierre & Eastern Railroad based at Rapid City, S.D., which was sold to Genesee & Wyoming Inc. on May 31, by Canadian Pacific Railroad.

Frost says all of his elevators are full.

“Every single one of them. I’ve been full in Pierre for a full week and have had the elevator doors closed there. We’re less than a quarter done with the winter wheat harvest, and just starting spring wheat. We’re piling it on the ground in Pierre and are looking for other locations to pile it.”

Farmers are coping in a variety of ways, he says. Some are going south into Nebraska with their wheat, or into the corn and bean country to the east.

“Some are going further north with their wheat and others are putting it in bags and piles,” he says. “Typically, they’d go 50 miles round-trip to sell grain and now it’s 150 miles or more.”

The big terminal for Midwest Cooperatives in Onida has gotten enough cars to run for a half a day a time, but nothing near track capacity. The elevator has fully loaded cars sitting around, and the facility is full.

Frost says Midwest Cooperative elevators have received 25 to 50 percent of the hopper cars they had in 2012, the last year they had a good winter wheat harvest. Market basis is extremely wide — 50 cents to a dollar or more.

“We’re 92 cents under (the Kansas City Board of Trade) on winter wheat in Pierre,” he says. The October bid is almost 50 cents better, indicating the difference is the rail availability.

Phillip Pease, Pierre terminal manager for the elevator, estimated farmers in his area are about 30 percent done with winter wheat and have been cutting spring wheat for less than a week.

Pease says he had 25 cars delivered on Sunday, accounting for 86,000 bushels, the amount he can dump in 10 hours. The Pierre facility can take in up to 75 cars at a time.

“When I started working at the elevator five years ago, we’d get 75 car deliveries two or three times in a week, and now we can’t get them to drop 75 cars in a week,” Pease says. The elevator has more than 550,000 bushels of grain storage, plus about 150,000 bushels in ground piles.