Elevators going down

KASSON  — Several grain elevators in southern Minnesota are going on the market, giving farmers in the area a year to adjust and hope that potential facility buyers will help rather than hinder market access.

In early June, CHS Inc. announced it would be closing and attempting to sell three of its grain elevator facilities located in Kasson, Ostrander and Wykoff. According to the company, the change is partly due to changes in the grain supply chain. The elevators will continue to operate through the 2026 harvest.

“CHS continues to optimize its assets to best serve our owners while providing market access to the global ag supply chain,” said Jim Morken, CHS senior director of operations. “We continually evaluate our facilities to determine if they meet the needs of our cooperative system and our customers, … (and) the grain supply chain in southern Minnesota has evolved into a market where local corn (and) soybean processing facilities and river terminals are the primary markets. … CHS has recently made significant investments in Mankato and Fairmont, and more farmers in this area are now delivering directly to those facilities.”

For farmers like Mike Brooks, who farms about 1,400 acres near Byron, the facility closures came as a surprise.

“They (CHS) put all this money into the Kasson elevator,” Brooks said. “It’s kind of a shock they’d close it after putting all this money into it.”

Brooks is the fourth generation on his farm, born and raised there. It started as a small dairy farm, but Brooks sold the cows in 1991 and has raised crops ever since, including corn, soybean, pea and sweetcorn, with a cover crop of oat after the vegetables are harvested.

The Brooks farm has done business with the Kasson elevator for years, including before its 2015 purchase by CHS; about 80%-90% of Brooks’ harvested corn and soybeans goes there each year. When the acquisition occurred, it looked like it would be a great deal for farmers and expand their harvests’ opportunities.

“They (CHS) have been fine to work with, and they built up the Kasson elevator just a few years ago,” Brooks said. “They added a bushel bin that cost $1.2 million, and they have the biggest corn drier in the area, so it seemed like they were here for the duration.”

There is another elevator in Nerstrand, north of Byron, that is more local for Brooks, but he said he preferred the Kasson elevator because CHS gave him a good deal on trucking. CHS used to own an elevator in Byron, but the Nerstrand elevator bought that facility from CHS, Brooks said.

“I guess that should’ve been a warning sign,” Brooks said.

However, with the Kasson plant up for sale, Brooks and other area farmers are worried the Kasson elevator will be purchased by a big farmer and force the smaller competitors back to the Nerstrand elevator, where it is unlikely they will have the capacity to take on so many clients with so much product. Brooks has talked to a big farming family in the area, offering to go in on the Kasson elevator if they are interested in buying it, but that is not the ideal situation for him.

“I really have no interest in owning part of an elevator,” Brooks said. “I don’t see an upside.”

Brooks also knows of other agricultural companies in the area that have been buying elevators, but less competition means a greater risk of farmers getting less money for their grain while being charged more for chemicals and fertilizer. For now, though, it appears the best-case scenario for farmers in the area is for another company to come in and buy the Kasson elevator while still paying higher dividends. However, if that does not happen and the elevator either closes or does not benefit his farm, Brooks plans to pivot his operation accordingly.

“I would just grow more vegetable crops, more sweetcorn and more peas, because the canning company does the harvesting,” he said. “Then, they take it to their plant that doesn’t go to that elevator. That would be one option I would have.”