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Iowa: Fuels fuel elevator expansion

Published on 28 October, 2006, Last updated at 11:19 GMT
 

By Judy Hayworth
THE JOURNAL
28/10/2006

KINGSLEY, Iowa: In 2005 and 2006, the Kingsley Farmers Co-operative Elevator Company, an elevator owned by local producers, aggressively improved its viability.

"The highest concentration of additions to our fixed assets have been in the grain department. With advances in farming, our farmers are getting more quantity off the same or less acres," says Chris Pedersen, elevator manager since 2003. "Someone has to store that grain, either the producers or the licensed warehouse elevators. We want to be a part of that, says our board of directors. Because they want to see our company succeed, we have increased our speed and increased our capacity."

With the first project, the capacity and speed of the elevating legs the grain is dumped in have been increased to 15,000 bushels per hour. A new conveyor system increased flat storage capacity by 125,000 bushels.

Increasing capacity has also been achieved with new storage facilities, one holding 320,000 bushels of corn and the other possessing a capacity of 500,000 bushels.

"Those two projects are the single largest dollar projects in the history of our 100-year company," he says. "They nearly double our net property plant equipment values and both have been accomplished in 13 months. We have taken on a tremendous amount of debt to upgrade our facilities and remain viable.

"That is the vision this board of directors has, and I share that vision with them," Pedersen adds. "This has come about because of the ethanol plants that have been built, and our aggressive projects have put us back on a competitive level with other companies.

"With the ethanol plants, we are simply a truck terminal. Nearly 75 percent of our corn, we truck to the Marcus ethanol plant, and the rest through our feed mill. Our soybeans go to AGP in Sergeant Bluff, a regional co-op of which we are a member."




Corn averaging 145 bushels

This season's corn crop has been more plentiful than anticipated, as near drought conditions persisted until late summer. On Oct. 20, some 88,000 bushels were unloaded at the elevator, the largest daily amount in 2006.

"The largest day ever was 115,000 several years ago, but we will eclipse that as we are anticipating 125,000 bushels one day yet this fall," Pedersen says.

The largest soybean volume day was 72,000 bushels Oct. 6. Producers around Kingsley have averaged 50-bushel soybeans and 145-bushel corn.

"With the ethanol plants going up in Merrill and Jackson, Neb., they will continue to give us a very competitive market for our producers. All three plants -- Marcus, Merrill, and Jackson -- none is more than just over 30 miles from Kingsley. Ethanol plants have been very good for us and our producers," says Pedersen.

"We have been profitable the last 3 1/2 years, in part because of the bins we have built. Our sales have gone up nearly 50 percent in the last five years, though our expenses have gone up nearly equal to that. Interest expenses have been higher; personnel expenses are higher. The elevator, which has 22 full-time employees and a dozen part-time, has spent a lot of money to get to this spot," he says.

Pedersen, who grew up on a farm between Rolfe and Pocahontas and dreamed of being a farmer, sees renewable fuels, ethanol and biodiesel, vital to the agricultural sector.

"The renewable fuels keep the value-added profits within the state, and that has never happened before. The next couple years should be very exciting in agriculture. It's the best thing that I've seen happen for rural Iowa farmers in the last 32 years, and it has a positive snowball effect to the rest of a community," he says.


 

 
 
 
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