Oct 13, 2016

Rail Upgrade Spurs Co-op Expansion

South Dakota Wheat Growers builds world-class agronomy, fertilizer and shuttle loading facility in Kennebec, SD, giving members easy access to export markets

Just as Fourth of July festivities commenced across the country this summer, wheat farmers and South Dakota Wheat Growers employees celebrated more than just Independence Day. That weekend also marked the beginning of the first-ever winter wheat harvest at its new world-class grain handling, fertilizer and agronomy facility in Kennebec, SD.

The new shuttle loading facility boasts rail shipping capacities of up to 90,000 bushels/hour and legging capacity to the bulkweigher of 140,000 bushels/hour to go along with a 2.1-mile, 110-car loop track. Its grain elevator has some of the fastest dumping speeds in the industry with a total truck receiving capacity of 60,000 bushels/hour.

During this year’s winter wheat harvest, the facility took in 3 million bushels of wheat and averaged 300 to 400 trucks a day — especially impressive numbers for the first time product was ever received at the site.

But the new complex doesn’t only address producers’ need for speed; it also provides a total of 4.087 million bushels of storage capacity, including 2 million in a flat storage building, 1.112 million in steel bins and 975,000 in a concrete slip-formed eight-pack.

The Kennebec elevator handles corn, millet, milo, soybeans, spring wheat, winter wheat, and sunflowers, and offers grain drying, origination and storage services. The agronomy center provides seeds, crop protection products, dry and liquid fertilizer application products, precision ag products and services, and fertilizer storage in its 13,750-ton dry fertilizer shed.

Its service by the Dakota Southern Railroad gives Wheat Growers’ 5,400 producer-members easier access to export markets via the PNW and the Gulf of Mexico thanks to recent heavy-rail line upgrades in the area.

“We knew rail service was coming west of Chamberlain, SD,” said John Kroll, maintenance and construction manager at South Dakota Wheat Growers. “We saw an opportunity and decided to seize the moment. We wanted to be positioned to be the first one out there.”

Seizing the opportunity

In 2013, Wheat Growers’ management team learned of plans to rehabilitate 41 miles of track from Chamberlain to Presho, SD, including fixing bridges and culverts, adding approximately 1,300 rail ties/mile, replacing existing rail, and straightening and leveling the track.

The only problem was the coop’s Kennebec grain elevator — located just 11 miles east of Presho — which lacked the capacity and equipment necessary to handle modern-day loop track operations. But that didn’t stop Wheat Growers from taking advantage of the situation.

“We had a good customer base in the Kennebec-Reliance area, and we wanted to make sure we got the chance to build a facility to fulfill all our producers’ needs,” said Kroll.

So the co-op promised the state’s Railroad Authority it would build a brand-new shuttle loader in Kennebec if the rehabilitation came to fruition. Thanks in part to their commitment, the $30-million heavy-rail project was funded bylocal, state and federal governments, as well as a $12.68-million federal transportation grant and more than $1 million in local donations from the group Rails to the Future.

Rail improvement efforts began in the summer of 2015 and are slated to be finished by the end of this October. Meanwhile, South Dakota Wheat Growers advanced its plans to provide producers a full suite of products and services with its state-of-the-art grain elevator, fertilizer warehouse and agronomy center.

Engineered solutions

South Dakota Wheat Growers turned to its trusted building partner SMA, LLC for design and construction of the massive 300-acre complex. After initially working together on two shuttle loader projects in 1998 and 1999, Wheat Growers has hired SMA multiple times to handle repairs, facility add-ons and bin projects over the years.

SMA entered the planning phase for Kennebec in fall 2014. Doug Eiden, project manager for SMA, LLC, said careful thought went into every detail, as he recalled early discussions over storage options.

“We went back and forth analyzing [the benefits of] a steel facility vs. a concrete facility, like the one they ended up with,” Eiden said. “Trying to determine what was best for them at the time, and for longevity, they chose to go with the concrete. Concrete gave them the ability to blend different types of wheat and hold other products because their crops change so much from year to year.”

Due to crop diversity in the area, the Kennebec facility had two key requirements: It had to be adaptable for handling multiple commodities and easy to expand.

“We put a lot of time and effort into the expandability and the flow,” said Kroll. “Plus we planned ahead. The base groundwork is done so we can add another steel bin or a center pile.”

Eiden explained how SMA engineered solutions to help them meet their key criteria.

“We set up the fill conveyors on the steel bins and the concrete to allow them to tap in very easily with just a transition and spout into another conveyor, run out and hit more bins or storage,” said Eiden. “They have the option to add two large steel bins to the south and two or 3 more to the north. We also incorporated some side taps in the concrete silos to fill a conveyor that could hit a large oval pile to the east that we’re projecting to be more than three million bushels in size.”

Once plans for their specific challenges were designed, construction crews broke ground on the flat storage building in March 2015, and construction was completed by June 2016 — less than a month before winter wheat harvest began.

Extra storage

This year’s record-breaking wheat crop has grain handlers across the Plains searching for innovative storage solutions for their inventory, and South Dakota Wheat Growers is no different. While the co-op plans to add an oval temporary storage structure at Kennebec in the future, this year it experimented with ag bags to store their wheat.

“The bags work very well for quality preservation,” said Kroll. “We did a trial here, something we started about two or three years ago [at other locations]. We monitor them closely by taking samples weekly, monthly or however frequently we feel the need to, but we’ve had very good luck with them.”

Instead of producers loading wheat directly into the ag bags, elevator operators manage the bagging operation themselves to save time. Kroll said the elevator’s staff finds the ag bags very effective.

“The farmers dump at the elevator; then we fill grain carts out of the elevator with our own equipment and take it to the bags, so it doesn’t slow down the farmers,” said Kroll. “We can usually carry them a year after harvest.”

They also leave room for the upcoming corn and milo harvest.

“The reason we focused on bagging wheat is because it’s not a big commodity for us to handle anymore in most of our facilities,” said Kroll. “We still take it and get good carries for it, but it can plug up our elevator space if we get a lot. It’s better for us to store that out of the way and clear the facility for row-crop harvest.”

In the meantime, the location’s 11 staff members, headed by facility manager Todd Longville, await the completion of the rail rehab so they can begin shuttle loading operations.

South Dakota Wheat Growers serves as a shining example of how seeking new opportunities, understanding your members’ needs and being open to unique solutions can lead to great things. Its new facility provides customer satisfaction with a full suite of grain handling, fertilizer and agronomy services, while leadership continues to keep an eye on future improvements and facility expansion.

Elise Schafer

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Marketwatch: Mar, 22

US Corn Price Idx: ZCPAUS.CM

open: 6.3066
high: 6.3927
low: 6.2802
close: 6.3693

US Soybean Price Idx: ZSPAUS.CM

open: 14.2313
high: 14.2619
low: 14.0617
close: 14.1286

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.6826
high: 7.8378
low: 7.5228
close: 7.7381

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 6.1413
high: 6.1992
low: 6.0188
close: 6.1067