New grain facility to focus on better serving the Mid-South

If you deliver grain to Cargill Inc.’s new $45-million grain handling and shipping facility in West Memphis, Ark., beginning in 2016, don’t expect it to take up permanent residency.

Cargill officials say the emphasis really will be on shipping when the structure now rising on the west bank of the Mississippi River south of West Memphis is completed in early 2016. Grain may leave the facility almost as fast as it arrives to move down river to the Gulf of Mexico.

“It’s designed to be a put-through facility,” says Fred Oelschlaeger, general manager for Cargill Inc.’s Southern Rivers Region. “Once a bean is on site it’s here for probably a matter of hours, if not minutes, before it’s on a barge and headed to the Gulf.”

Oelschlaeger, based in Cargill’s Southern Rivers Region offices in St. Louis, said the fact the company is moving hundreds of thousands of cubic yards of dirt and spending millions of dollars on the West Memphis site is testimony to the importance of export markets like China and producers in Arkansas and other Mid-South states.

“If you look at U.S. ag and U.S. exports, soybeans are a big part of that program and China is a big part of worldwide soybean trade flow,” he said. “Arkansas is a place that historically has grown a lot of soybeans and continues to do a very good job of expanding acres and expanding production.

“To feed the needs that China has, this is an area that’s getting looked at very heavily. We always hear about South America expanding bean production or bean exports. The Delta region and Arkansas in particular is another region that has a lot of beans that are available and available for export. We hope this facility will be a big, big part of that program.”

Farmer attraction

While Cargill envisions the West Memphis facility as providing a quick turnaround for grain shipments, the company realizes it has to attract soybeans, corn, wheat and milo from the surrounding countryside to keep the pipeline flowing.

The new facility will have three truck-receiving areas for unloading grain to minimize the waiting time for growers. It is expected to be able to unload a truck every 48 seconds or about 50 trucks per hour. A 10,000-bushel-per-hour dryer will allow farmers to harvest at higher moisture levels and also make sure the grain is in condition for export.

The company currently operates two elevator facilities in Memphis and another grain handling and shipping facility at Hale’s Point, about an hour north of Memphis in west Tennessee. The two Memphis locations – on Second Street in downtown Memphis and on President’s Island – are in heavily-congested areas.

In contrast, the West Memphis site is just off lightly-traveled South Loop Road, a few minutes south of where Interstates 40 and 55 come together in West Memphis.

“As the city of Memphis grows, it’s difficult to get to those sites,” says Oelschlaeger. “It’s a little bit a ways from where the beans are grown, and we’ve looked at Arkansas and the West Memphis area and decided on this site.”

Another advantage that might not be as obvious to most observers is the location in a bend of the Mississippi River. Being on the outer edge of the curve of the river means the facility should be able to continue to operate no matter how high or low the water gets.

Record swings

The Mississippi has reached record highs and near-record lows in the last five years. “Sixty-five feet is the amount of river fluctuation from all-time low to operational at the 100-year flood level,” says John Schmidt, project manager for the facility for Cargill.

When the port of Memphis was closed for weeks during the drought of 2012, the river at the site of the new Cargill facility had 30 feet of water. “From a river access point of view, this facility will be able to load in both high and low water,” says Oelschlaeger.

“As people from around here know, you can get high water for months at a time and you can get low water for months at a time, and we hope to stay in operation in those years and provide a consistent outlet for local farmers.”

Putting the facility in close proximity to the river meant building it inside the Mississippi River Levee system. That meant applying for permits from federal, state and local officials. “Obviously, the folks down here love their levees,” said Schmidt. “And we want to make sure everything was up to their standards.”

Contractors began moving an estimated 450,000 cubic yards of material to raise the site above the 100-year flood level in July. Most of the dirt work was expected to be completed early this winter. Putting in the foundations of the storage and grain handling facilities will begin in the spring of 2015, and the site is expected to be operational by spring of 2016.

Asked about how much grain the facility could handle eventually, Oelschlaeger grins and says “We hope a lot.” He estimates at least 100 million bushels are grown in the nine- or 10-county area in eastern Arkansas around West Memphis.

“Obviously, we have a lot of competition in this area, and I don’t want to commit to what we think we can or can’t get,” he notes. “I’d like to think we can get 25 percent to 30 percent of that. I hope it’s a great place to dump. I would hope 45 million of those would come through here.”

For more on the U.S. and world soybean outlook, visit http://www.usda.gov/oce/forum/2015_Speeches/MCordonnier.pdf

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