CHICAGO, ILLINOIS, US — GROWMARK Inc. is the sole owner of a grain warehouse in Chicago with 11.5 million bushels of storage, which it has renamed Lakeside Grain Trading, after the closing of a deal on June 27 to purchase the facility from COFCO International Ltd.

As part of a simultaneous exchange of grain assets, Beijing, China-based COFCO International also agreed to purchase GROWMARK’s minority stake in a transloading facility located on the Mississippi River in Cahokia, Illinois, US. Financial terms were not disclosed. COFCO’s ownership of the Cahokia facility has drawn concern from two members of the US Congress, who sent a letter to US Treasury Secretary Janet Yellen on June 27 asking for a thorough review.

Based in Bloomington, Illinois, US, GROWMARK provides agronomy, energy, facility engineering and construction, and logistics products and services, as well as grain marketing and risk management services to its nearly 400,000 North American customers.

Due to its connection with the Chicago Mercantile Exchange (CME) and location on the Calumet River, the Chicago warehouse is one of the most important in Illinois, GROWMARK said, and the purchase marks the first time the facility will be owned by an American agricultural cooperative. Lakeside Grain Trading, formerly known as the B-House, will allow GROWMARK to handle 1.1 billion bushels of grain and oilseeds annually.

The facility can accommodate lake vessels and larger ships to further diversify GROWMARK’s fleet of marketing options for grain, which currently includes Class I rail, barges and trucks. Lakeside Grain Trading affiliation with the CME as the last remaining par value delivery warehouse also will enable GROWMARK to further support the hedging and marketing strategies of its members, the cooperative said.

“This transaction reflects GROWMARK’s commitment to increasing farmers’ profitability while strengthening its presence along strategic waterways and ports throughout the Midwest,” said Matt Lurkins, vice president of grain and strategic relationships for the cooperative. “GROWMARK will always act in the best interest of the farmers we serve. Every day we try to maximize the value of the farmer dollars that have been entrusted to us. We are confident our investment in Lakeside Grain Trading will serve to execute on both of these strategic imperatives.”

The Cahokia facility is a grain and byproduct transloading terminal, strategically located on the Mississippi River, in the year-round St. Louis Harbor. It has access to all six of North America’s Class I railroads, supported by over seven miles of private onsite rail track, capable of accepting up to four-unit trains (110 cars) at a time. It is a high-speed rail and truck-to-barge loading facility.

COFCO built the Cahokia grain terminal in 2017. Shortly after the completion of construction, GROWMARK purchased a small interest in the terminal. GROWMARK sold its minority stake in the terminal to COFCO on June 27. Simultaneously, GROWMARK purchased B-House from COFCO International.

Doing business in 36 countries, COFCO International is the overseas agriculture business platform for COFCO Corp., China’s largest food and agriculture company. In 2023, COFCO International handled over 122 million tonnes of related commodities with revenues of over $50 billion. 

US Representatives Nikki Budzinski and Mike Bost, whose districts include southern Illinois, sent a letter to Yellen expressing their concerns and asking for a review of COFCO’s ownership of the terminal by the Committee on Foreign Investment in the United States (CFISU) “to weigh the consequences for America’s national security and the region’s agricultural economy.”

“While we support expanding access to foreign markets, it is alarming that a majority of US ports and terminals are owned and operated by foreign entities, especially China,” the letter stated. ”COFCO’s acquisition of the Cahokia grain terminal is just the latest in an ongoing divesture of American waterways and will contribute to that majority.”

World Grain reached out to GROWMARK and COFCO Corp. regarding the letter. GROWMARK declined to comment, while COFCO Corp. has not responded.