KMC grain shuttle expected to benefit producers

Passers-by on U.S. Highway 56 can?t help but notice the overpass bridge being constructed on the project site. The overpass will enable grain trucks to cross over a waiting train as they enter the terminal. Workers were busy at the project site Saturday morning despite the effect of thawing temperatures on the partially frozen dirt.It won?t be all that long before grain farmers in the area begin reaping the benefits from a high-speed shuttle loading facility currently under construction just west of Canton along U.S. High?way 56.

Officials with Mid Kan?sas Cooperative Association say the year-long construction project could be completed by the end of August.

Located adjacent to the Union Pacific rail line that runs along the northern edge of the MKC property, the grain shuttle will be able to load 110-car trains in less than 12 hours.

Once loaded, trains will carry the grains to export facilities in the Pacific North?west and the Gulf Coast and Mexico.

?The hope behind that facility is that we see a lot broader-range market,? said Erik Lange, who will oversee the operation of the $22 million project as MKC?s director of southern operations.

?Not only are we dealing with just the local terminals and local wheat mills, but we will have an outlet for all soybeans, corn, wheat and milo to the world.?

Partnership project

The project is a 50-50 partnership between MKC and Minnesota-based CHS Inc., an energy grains and foods company and the nation?s leading farmer-owned cooperative, according to MKC.

MKC is the project?s managing partner.

The two cooperatives formed a limited-liability company called Ag Partners LLC, which in turn will be a member of Team Marketing Alliance.

TMA, which will handle grain marketing services for the shuttle facility, is an LLC owned by four central Kan?sas cooperatives: Far?mers Cooperative Elevator Co., Halstead; Cooperative Grain and Supply, Hillsboro; MKC, based in Moundridge; and Farmers Cooperative, Nick?er?son.

This site plan for the KMC grain shuttle shows the layout operation now under construction. Near the bottom are the concrete below-ground storage silos, while the two ovals more to the middle of the site are the above ground storage areas. In all, the facility will have the capacity to store well over 3 million bushels of grain.Together, TMA owns 48 country elevator facilities for the handling of bulk grain.

Storage shortage

Lange said the Canton facility, in addition to opening direct access to export markets, will have on-site ground storage in excess of 3 million bushels once it is completed.

?Today we have a storage deficit,? Lange said. ?That?s why we really are hitting that core (U.S.) 56 corridor. We continue to have grain-storage deficit in that corridor.

?If we look at just the growth curve on wheat production, corn production, milo production and soybean production, TMA?particularly MKC?would have to have to build around 800,000 to 900,000 bushel storage per year for an average production year to keep up with our farmers? abilities to expand,? he added.

?You round that up for all of TMA, and that?s 1.2 to 1.3 million bushels.?

Lange said the Canton facility is designed to handle 17 to 20 million bushels per year ?easily.?

Changing circumstances

Lange said MKC began exploring the idea of building a high-speed loading facility about seven years ago in response to changes in grain production and handling.

?For a long time MKC has been, traditionally, what we would consider a truck house,? he said. ?Most of our grain coming in and going out is by truck. A very small percentage of it is by rail.?

But the marketplace has changed in the past decade or so and so have the railroads.

?The railroads were a lot different market in themselves,? Lange said of the past. ?You could ship one to 12 rail cars, and it could be done efficiently?and the railroad like to do that.

?Over time the railroad changed. They don?t like to stop for one car anymore. Especially when you?re only moving it 30, 40, 50 miles.?

Lange said MKC?s rail market had ?pretty much gone out? over time.

?The problem is, without the access to rail, all you can really hit is that truck market, which is a fairly local market,? he said. ?You can move grain quite a ways in a truck, but it?s just not as efficient.?

About seven years ago, MKC conducted a study of its trade territory to see what the best location would be for a high-speed rail terminal.

?It came back that the Canton-Galva 56 Highway corridor was a good place to do it,? Lange said. ?Not only is there excellent production in that area, but there was not enough grain storage and grain capacity, speed, to handle that as crops have improved over time.?

When two subsequent studies confirmed the same location, MKC decided to move ahead and began looking for a funding partner for the huge undertaking.

A relatively small MKC sign marks the location of a relatively large project west of Canton. ?We really believe in the ?Shared growth, shared success? tag line,? says Erik Lange.?We kind of put the word out that we were potentially looking for a partner, and had probably 13 different companies that expressed interest,? Lange said.

?It took us about a year to make that decision,? he added. ?We had a lot of potential partners, but what makes a good partner for us? What makes a good partnership??

MKC eventually chose CHS.

?They bring a lot of expertise to the table as far as having lots of rail facilities and having export terminal facilties,? Lange said. ?They bring a bigger picture to the market than MKC could.?

Facility operations

When it opens, the facility will handle the four primary grains produced in the area: wheat, corn, soybeans, milo.

?As the market changes we might handle different grains,? Lange said.

The speed of handling those grains is key.

?It will have the ability to receive about 60,000 bushels an hour,? Lange said. ?It will also have the capability to fill a 110-unit car train in 12 hours or less.?

The facility is designed with a large rail loop that gives train operators the option of arriving from either direction, then leaving for either direction once the cars are loaded.

The large overpass bridge taking shape on the site will enable trucks to enter the facility when a train is on site by providing a roadway that passes above the rail cars.

The facility will operate year round, Lange said.

?We don?t necessarily set hours, but it will be open to meet harvest needs at harvest time and customer?s needs as the season requires,? he said.

Lange said the facility will create three to four new full-time jobs when it goes online.

?Once we assess what the needs are moving forward, I anticipate it being more than that, especially seasonally there could be definitely more than that,? he said.

Now in his ninth year at MKC, Lange said he is excited to bring this project to the customer.

?I know customers in the area will greatly benefit from this?just the speed and capacity that is needed in that area,? he said. ?I?m excited to bring some of the technology that?s going to be at this facility to customers and for customers to have a good outlet in the area.

?We?ve had some great partners working with us in the past at other terminals, but we didn?t have the complete picture ourselves.

?Today we will.?

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