HENSLER -- The grain equivalent of a Super Wal-Mart is moving into the neighborhood.
It will change the looks of the countryside around Hensler and the way grain moves.
Super Wal-Marts have the effect of shutting down other retailers, and it's possible the super shuttle elevator will do the same.
The developer is food conglomerate Archer Daniels Midland-Benson-Quinn, with pockets $39 billion deep.
Now that the land deal is done, construction is expected to start this month. By fall, eight concrete silos, each 115 feet high, will rise above the Missouri River bench land in Oliver County.
The company plans to handle 7.5 million bushels of grain, 110 cars at a time, 18 times a year. That's one hefty grain handle, as it's known in the trade.
Acres planted to wheat are shrinking, not growing in North Dakota. That means the grain that will get loaded through Hensler is grain that's already getting handled somewhere else. Who wins in the grain war and who loses once the super grain operation moves in remains to be seen.
Arnie Schaff, grain manager at ADM-Benson-Quinn in Underwood, said the Hensler elevator will fill a big void. The nearest super shuttle elevators are at Minot, Gladstone and Sterling, all Cenex Harvest States operations and all roughly 80 miles away. Schaff said competition with CHS elevators was never a topic of discussion.
"There's enough for all of us," he said.
While that might be true in theory, it's not necessarily true in practice.
The shuttle elevator at Sterling, developed to handle 7 million bushels, handled about 4 million last year, said Dale Johnson, of Kintyre, former board member of South Central Grain Cooperative. Johnson said the big facility at Sterling and price preferential from the railroad makes it tough for small elevators around Sterling to compete, but even the Sterling facility isn't performing as anticipated.
"They work, but to make them work, they have to destroy the other (elevators)," Johnson said.
Most at risk are small elevators sprinkled around the Hensler region. In neighboring Mercer County, the two remaining elevators at Hazen and Beulah are managed under one umbrella.
Manager Mike McNamee said he expects Hensler will take some of the 1 million bushels of wheat handled at Beulah, especially from farmers who own semi trucks. He said it's not a "lay up" for Hensler, either, with a multi-million investment before it turns the key.
Falkirk elevator manager Ron Hefta said he and his board are already talking about their future, with a super elevator just down the road. Hefta said Falkirk in McLean County will potentially lose half its wheat business once Hensler opens next year. He figures the Hensler operation -- with a storage capacity of 680,000 bushels -- will possibly put three local elevators out of business.
"Hopefully, it's not us," he said.
He said the Falkirk board is on the offensive, examining the potential for other agriculture-based enterprises. Those might include processing one of the area's specialty crops, like peas, or investing more in crop input services to farmers. Hefta said the challenge comes in picking the right niche to get into.
"How long are these specialty crops going to be around?" he asks.
Falkirk, like elevators at Wilton, Washburn and Regan, are on the Canadian Pacific line. Hefta said Canadian Pacific's rates don't make it easy for elevators to compete, much less when they're up against the Burlington Northern and Santa Fe Railroad super shuttle rate, the best going.
John Spitzer, a board member for the Wilton, Washburn and Regan elevators, said those elevators already feel the squeeze from CHS at Sterling. He said he thinks the Hensler project is Archer Daniels Midland's way of moving to protect its grain share against CHS.
"They've (ADM-Benson Quinn) got a great facility at Underwood, but someone's taking their grain," Spitzer said.
He said local elevators may be tapped to fill spring wheat protein specifications on super grain loads, but he said he doesn't expect much good will to come from trying to survive between two giants, CHS at Sterling and ADM at Hensler.
Local farmers said they wanted the Hensler terminal, when it was discussed at Oliver County planning and zoning meetings. They said they would benefit from a closer haul and a better price.
But Spitzer said the price benefit could be short-lived because super shuttle elevators have to pay off $7 million to $8 million in construction investment.
"Once they've got us (other elevators) broken, they're not going to give farmers 10 to 15 cents more a bushel, they'll give them 10 to 15 cents less," Spitzer said.
Like Hefta, Spitzer thinks establishing a niche for handling specialty crops is the best future for local elevators like Falkirk, and the Wilton, Washburn, Regan elevator triangle.
"But they're trying to destroy us before we get to that point," Spitzer said. "If we close the doors, it will be for an eternity."
Schaff said the Hensler terminal will be in business come spring. He said the slip form silos will be poured in about a week's time this fall and the mechanical parts will be installed over the winter.Bismarck Tribune/Lauren Donovan
