Shifting the continental divide of grain
MONTEVIDEO -- The continental divide of grain runs through western Minnesota, bisecting the Twin Cities and Western Railroad line that runs east to west from the Twin Cities to Milbank, South Dakota.
MONTEVIDEO - The continental divide of grain runs through western Minnesota, bisecting the Twin Cities and Western Railroad line that runs east to west from the Twin Cities to Milbank, South Dakota.
“Only the continental divide keeps moving,’’ laughed Mark Wagner, president of the short line railroad based in Glencoe.
Moving is the word: Workers began pouring concrete Tuesday at the Hanley Falls Farmers Cooperative Elevator site located between U.S. Highway 212 and the Twin Cities Railroad in Montevideo. The Montevideo project represents a $19 million investment to take advantage of the Montevideo elevator’s location along the TC & W and the access it provides to move grain to a variety of markets, domestic and foreign.
The Montevideo project is slated for completion in the fall of 2016. It calls for adding track to load 110-car unit trains; two, 750,000 bushel storage bins; two 20,000 bushel-an-hour loading stations, a new office, and a system that allows the grain to be weighed on rail cars as they move.
What’s just getting underway in Montevideo is almost a mirror image of what’s already well on the way down the same rail line in Appleton. There, West-Con is also investing over $19 million in major upgrades to its elevator, according to the company. It is adding over 7,000 feet of rail, 1.2 million bushels in additional storage, and faster, high capacity systems for loading and weighing grain.
It will be ready to begin shipping grain by September, according to Dean Isaacson, West-Con president in Holloway.
The TC & W offers access to move unit trains on three class 1 railroads: The Burlington Northern Santa Fe, Union Pacific and Canadian Pacific.
“So we can move more grain faster,’’ said Scott Dubbeldee, executive director of the Farmer’s Cooperative Elevator, when speaking about the Montevideo project. “What the modern farmer wants: speed, space and market. Those three things.’’
These and other elevators in the region currently ship much of their grain on the BNSF Railway, and are certain to continue to do so. But markets served by the Union Pacific are becoming increasingly important to Midwestern farmers, according to Dubbeldee.
The Union Pacific line serves 191 domestic destinations and 32 in Mexico. “It really adds to the places to go with the Midwestern farmer’s grain,” he said.
West-Con currently has two unit train operations on the BNSF Railway, but it too is looking for access to the markets served by the Union Pacific, Isaacson said. He said the TC & W is important to West-Con. It relies on the TC& W to ship wheat to eastern markets.
West-Con also needed additional storage and drying capacity, making the improvements in Appleton an efficient project, he noted.
The TC & W connection also means access to markets served by the Canadian Pacific and the ocean port in Vancouver, British Columbia, Canada. Having access to varied locations is increasingly important, noted Dubbeldee.
“It’s a very fluid time,’’ said Wagner, who added: “If there is one constant, it’s change.’’
The TC & W line invested in upgrades to its track west of Granite Falls in anticipation of the projects and the increased shipping they represent. It also added six employees to handle the increased activity.
Both the West-Con and Montevideo elevators are expected to add jobs as a result of the projects, but increased automation in grain handling systems reduces the number of new workers needed. The projects are also providing the economic benefits associated with the construction crews at the two project sites.
The farmer’s cooperative worked with Land O’ Lakes to conduct a feasibility study before it embarked on the $19 million investment in Montevideo.
The study found the project would add value by taking advantage of competitive shipping and new markets made possible by the Twin Cities and Western connections to the Class 1 railroads, said Dubbeldee.
Wagner said the TC & W worked hard to build a solid relationship with the three Class 1 railroads. He pointed out that they have strict operational requirements. “If we don’t perform then they don’t want to do business with us. Knock on wood. I think we have a good track record with them, pun intended,’’ he said.
Dubbeldee said he expects that the Farmer’s Cooperative Elevator will continue to receive and ship grain from its other locations, such as its Hanley Falls headquarters, no different than in the past. “I don’t foresee us hauling corn from Hanley to Monte, but when that market is really good we’ll ship out of Monte. When the Hanley market is good, we’ll ship out of there.’’
Both elevators serve large areas with productive corn and soybean farms. Dubbeldee said he has no doubt farmers in the Montevideo area will continue to fill the new and larger bins there.
“My guess is it won’t be enough storage. It’s like building a garage. You never build it big enough for your stuff but you build what you can store.’’