Train Load-Out Would Sit On US36
By Deb Hadachek – Telescope News
A gift with the potential to keep on giving to the county and ag producers for years to
come was unwrapped Monday at the Republic County Commission meeting. Officials with Central Valley
Ag unveiled plans for a $60 to $90 million train facility for grain and liquid fertilizer on the BNSF tracks northwest of Courtland.
The concept calls for a circle track rail with the capability to load 110 railroad cars of grain or to unload 70 railcar units of liquid fertilizer. The site would include an office, shop, scales, chemical storage and custom
application facility.
“Why do we need this here?” said Wes O’Bannon, vice president of operations for CVA in southern Nebraska and northern Kansas. “The fact is this is a very high production area, and there’s enough grain being grown here today to max out the ability of the Concordia Terminal and the Superior Terminal to hit export markets.”
The train facility would move grain from Courtland to the Gulf via Texas or New Orleans, he said, but also has the potential to ship to the Pacific Northwest.
“The biggest potential is Mexico, and this gives us an advantage over the “I” states
for corn production,” he said. “Sitting on the BNSF, there are an array of opportunities.”
CVA will ask Republic County to support Industrial Revenue Bonds to fund the project. IRBs give the company a 10-year property tax abatement, and a sales tax exemption on materials used to construct the facility, said CVA attorney Curt Frasier, Beloit. A public hearing on the IRBs is scheduled for the January 9 meeting of the Republic County Commission. The board will also meet with a bond attorney from GilmoreBell in Wichita to further discuss IRBs. CVA will cover the cost of the attorney and bond financing, Frasier said.
O’Bannon said grain prices at a terminal are higher than at a local elevator. “The big thing for your producers of this county: we anticipate the basis improvement between a country elevator and a shuttle elevator to be 10-25 cents better,” he said. “Conservatively, that’s a $2 million impact year one for farmers with that additional basis. It is a big thing for producers to have that market and have that market close.”
County Commissioner Doug Garman, who farms in the Courtland area, agreed. “As an individual and a
commissioner, I’m delighted you’re here,” Garman said. “There’s grain that travels north and south (to terminals in Superior and Concordia) that needs to stay in the county.”
3 to 10 Year Plan
O’Bannon said the project would be built in phases over the next 10 years. If IRBs are approved, the company could start construction on Phase 1 in Spring 2023 and be ready to accept corn, soybeans and milo in Fall 2024.
In the first year, the facility is protected to handle 20 million bushels of grain, he said. How fast the project moves forward hangs on the construction industry, he said.
“We’re estimating this will cost $60 to $90 million to build,” he said. “That’s a wide range, but it’s been a wide
range of pricing I’ve got over the last 13 months.”
The project phases include:
Phase I: (To be completed in the first 18 months)
*Build 8,500’ of circle track railroad with two switches onto the BNSF mainline railroad.
*Build a concrete grain facility to hold 2.5 million bushels that can receive grain from farmers at the rate of 65,000
*Build a grain loadout for rail to load rail cars at 65,000 bushels an hour.
“We expect to be able to load a full shuttle of 110 cars in eight hours,” O’Bannon said. The facility could still accept 45-50 semi loads of grain an hour while loading a train. The rail line will impact 20 RD, but should have minimal impact on US36 traffic, O’Bannon said. O’Bannon said CVA has been in contact with the Kansas Department of Transportation about additional turn lanes on US36 to accommodate semi traffic into the elevator. O’Bannon said extensive automation will be a key feature of the new facility.
“That’s one of the things we’re really working hard to make sure that we’re putting every piece into the puzzle for today and in the future,” he said. “Working in an elevator is hard work, dirty work, cold and hot.
“Labor is our most important asset for CVA,” he said. “To have people running computers instead of running shovels would be our goal.” When fully operational, the facility will employ 23 full-time and up to 10
seasonal employees. Sara Moravek, manager for the Courtland, Norway and Scandia facilities, said those elevators now employ 15 full-time and part-time.
Phase 2 (To be completed in first three
years)
Build a liquid fertilizer facility with 4.5 million gallons of storage. The facility could receive 65 to 80 rail cars of liquid fertilizer. O’Bannon said an 80-car train is equivalent to 330 semi loads of liquid fertilizer.
Phase 3 (To be completed in 4 to 5 years)
Build a flat building for grain storage to hold three million bushels of
grain.
Phase 4 (Six to eight years)
Build a second flat building to store an additional three million bushels of grain.
O’Bannon said CVA plans to continue operations at the current Courtland elevator when the new facility is complete, although its uses will change. That site might be used for wheat only, and a delivery point
for specialty crops like non-GMO corn.
Norway would also continue to be used as a grain and fertilizer facility. The company’s site at Scandia would likely be shut down, he said. O’Bannon said CVA has been meeting with the Kansas-Bostwick Irrigation District in regards to the quarter section of land under option for the new facility.
“We have located all the lines, including the mainline that runs through the facility,” he said. “This is set up so
there is nothing on top of irrigation pipe. Initially that was a hurdle, but we moved and tweaked and know we will continue to provide access for the irrigation district as needed, and there is nothing on top of a line that
would cause an issue in future.”
IRB Financing
Frasier said IRB financing was used to build the AgMark elevator in Concordia and subsequent expansions to that facility. “The concept with IRBs is it allows us in rural areas to encourage investment in a sizable way in
communities, hopefully a long-term asset that our taxpayers will be able to benefit from for years to
come,” he said.
The 10-year property tax abatement and sales tax exemption allow companies to invest more into the construction of their facilities, he said. CVA plans to make a $20,000 annual donation to the Republic County Economic Development Corporation during the tax abatement period, he said. O’Bannon said a load out of this magnitude has been a long-held dream and one he’s worked towards for many years.
“When Farmway bought Hansen Mueller 15 years ago, our intent was to come up with something of this stature,” he said. “We looked at it many different ways, and never figured how to make it profitable to be able to work for our grower’s long term. “It makes me proud that when we joined CVA, we have the wherewithal to look at a project of this scope for Republic County.”