Elevator managers plagued with problems are feeling the strain

Grain elevators in the region say business has been disrupted by trade tariff wars, weather-related harvest delays, and now uncertainties over market reductions in the COVID-19 pandemic.

ARVILLA, N.D. — The grain trade in the Upper Midwest seems bedeviled at every turn — unprecedented harvest woes, trade wars, and now a worldwide coronavirus scare.

“We’re handling a lot of corn,” says Tyler Stegman, general manager for Columbia Grain International LLC, at its Arvilla location about 20 miles west of Grand Forks, N.D. “It feels like corn harvest started a week and a half ago.”

The amount of corn that CGI Arvilla handled in October, November, December — the normal harvest time — was down 60%.

With corn, Stegman’s farmers are going after it in the snow. The frost is not very deep in his area, and it will soon get slicker.

“I think it’s going to be a real struggle,” he says. “The worst case scenario is this corn stands and it turns into a PP (prevented-planting insurance) piece of ground.”


Curt Bjertness general manager for C-W Valley Co-op at Wolverton, Minn., says corn that remains in the field from last fall has dried down and increased test weight.

“It’s going to be a challenge to get it off in a timely fashion,” he says.

Bjertness thinks 2019 grain handle might be 15% to 20% lower than the pre-trade war year of 2017. In part that is affected by some of the 2019 crop not being harvested.

“I think grain (from prior crops) is still out there, waiting for an opportune time to move,” Bjertness says.

The National Agricultural Statistics Service will update corn harvest percentage reports March 30.

Meanwhile, tariff woes are continuing. Soybean trade in the 2018-19 marketing year, ending last July 31, was 36% less than the pre-trade war level in 2016-17.

Stegman expects the handle to increase in 2019-20, despite perceived competition from Brazil. “I don’t think it gets back to the volumes we saw, say, three harvests ago,” he says. Having new trade deals with China may be beneficial.

“China was coming and buying little jags here and there — periodically through the year — I think to keep the trade talks going,” Stegman says.


Now that the U.S. and China have signed phase one of a new trade deal, Stegman is cautiously optimistic that there will be a market again for the “normal” time period of the October to December.

Craig Hebrink, senior vice president of grain and feed for Farmward Cooperative, with its corporate home at Morgan, Minn., says much of his company’s trade area in southern Minnesota got its 2019 corn crop harvested. But Hebrink says the marketplace for shipping corn has changed since pre-trade war times. Formerly, much of the co-op’s grains had been loaded on shuttles and shipped to the Pacific Northwest. Today, much of the company’s grain has gone through feed or other local processors, including ethanol.

“Overall, volume is down,” Hebrink says, comparing it to the strong crop in 2017, which would have been marketed in the fiscal year which ended Aug. 31, 2018. Corn marketings are down more than 20%. Similarly, soybean sales are down more than 30% from pre-trade war levels. Soybeans now are used locally or shipped southward via the Mississippi River.

Bjertness says good world grain production has helped take Chinese grain markets away.

“We’re not a shuttle loader but the majority goes to shuttle loaders, ethanol plants, flour millers,” he says.

Bjertness says the Chinese market is affected by tariff retaliation, but also by the African swine fever that has reduced the Chinese hog herd.

Dakota Plains Ag Center in South Dakota has been greatly impacted by recent trade and health shocks. Matt Winsand, the company’s chief executive officer and general manager, oversees the company’s Parkston, S.D., terminal, as well as a new, $40 million facility at Napa Junction, S.D., northwest of Yankton, S.D. That shuttle elevator opened in the fall of 2017, just ahead of the announcement of U.S. tariffs that triggered Chinese ret retaliation.

He says the change in export sales to the Pacific Northwest have relegated his gleaming inland grain export terminals to “pretty big truck houses,” meaning they compete for truck business with smaller elevators not designed for the export market.


“Competitive bidding is not an option anymore,” Winsand says. “We’re all going to the same place.”

He says farmers have received government money for trade tariff retaliation, but elevators have not.

“The grain industry has really suffered from the trade deal,” he says. He thinks it’s possible for his company’s soybean market to get back to 60% of its Pacific Northwest business someday. “But it’s going to take some time.”

Virus ‘another hiccup’

And in the background? The coronavirus and COVID-19 is “another hiccup,” Stegman says, driving down prices and dampening farmer interest in selling.

Farmward Cooperative includes 10 grain facilities and two agronomy locations. Since March 18, the offices have been closed to public traffic, although shipping and receiving work continues with a “skeleton crew” implementing strict internal and external protocols for separation. Some are working from home, and the co-op has backup plans in the case key personnel are quarantined.

The COVID-19 pandemic has restricted contact with the public at C-W offices in Wolverton. Truck drivers are remaining in their truck.

“Agriculture is an essential business, and we have to keep product moving,” Bjertness says.


Mikkel Pates is an agricultural journalist, creating print, online and television stories for Agweek magazine and Agweek TV.
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