Wheat Growers plan $40 million facility
June 26, 2014
by World Grain Staff
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ABERDEEN, SOUTH DAKOTA, U.S. — Nearly 150 people attended a series of Wheat Growers meetings in Lyman County June 23-24. Meeting attendees learned the details of Rails to the Future’s plan to bring a heavy rail service in South Dakota from Chamberlain to Presho and Wheat Growers’ commitment to build a $40 million facility along the rail west of Chamberlain.
Steve Halverson, chairman of Rails to the Future, shared the progress of the group’s grass roots effort to fund the rail. Halverson is optimistic about the construction of a heavy rail from Chamberlain to Presho. The South Dakota legislature has appropriated $7.2 million to the railroad trust fund, and Rails to the Future has received more than $1 million in pledges from private investments.
“These sessions are great because there’s a lot of interest out there as to what’s going on. Which leads to a lot of rumors,” Halverson said. “It’s just good to have a business like Wheat Growers come in and tell us what they plan to build. They pointed out that they don’t know where they’re going to build, but they talked about what they’re going to build, so everyone can visualize what to expect here in Lyman County.”
Dale Locken, Wheat Growers chief executive officer, shared details regarding the reason for their commitment, where the facility would be built and when construction could begin. Locken indicated that Wheat Growers has identified a strong need for such a facility to meet the rapidly changing needs and efficiency of producers in south central South Dakota. As transportation costs rise, the lack of a heavy rail system is a major bottleneck for patrons in south central South Dakota.
“We want to meet the needs of today’s producer, which is to give them better access to better markets, reduce their freight costs and be able to pass those savings back on to those producers,” Locken said.
Locken noted that he sees much optimism and support for the plans. He added that the benefits of the facility would reach further than patrons, as it would provide an economic lift to the whole south central South Dakota area.
While potential locations have been identified for the 110-shuttle loader facility, Locken stressed that the absolute location of the anticipated facility is yet to be determined. He noted that its location is highly dependent on where the rail goes, the quality of each location and an analysis of competitive market dynamics.
Rails to the Future has applied for a $16 million Transportation Investment Generating Economic Recovery (TIGER) grant through the federal Department of Transportation. The grant would be the additional piece of funding needed to begin construction of the rail. However, Halverson noted that efforts to raise the additional money needed for the rail would continue if the grant were not received.
Construction of the facility is estimated to take about 18 months. With the construction of the heavy rail, the facility would be accessible by four major railroads—BNSF, Union Pacific, Canadian National and Canadian Pacific.