Partner power

Investing $30 million in a new shuttle train facility in Holcomb, Kan., wasn’t a decision Garden City Co-op Inc. Board Chair Clayton Maddux took lightly. Another grain-receiving facility was located a few miles away and some of the co-op’s farmer-owners were skeptical, he admits.

Yet the board unanimously approved building River Valley Terminal. Why such confidence? Maddux says data and strong partnership with CHS tipped the scales.

“We grow more sorghum and wheat in the region than the local market demands, so it has to go somewhere. We’re also in a corn-deficit region,” he says. “Owning our own high-speed rail facility to efficiently move high volumes of grain in and out to meet customer needs and retain margin benefits our owners.

“We would have been apprehensive doing this if we didn’t have a strong partner in CHS and access to that expertise,” Maddux continues. “CHS has global connections, ports and rail capabilities that we don’t.”

Kealan Griffin, a senior merchandiser with CHS, says the partnership with Garden City Co-op (GCC) is mutually beneficial. As the grain liaison with GCC, he leads marketing and transportation logistics for grain CHS purchases from GCC with the goal of growing the overall grain business of both companies.

“Garden City Co-op and CHS have always traded grain. River Valley Terminal expands on the volume we handle with Garden City and our marketing opportunities,” Griffin says. “Processors want to buy larger volumes, not just a few [train] cars, to reduce freight costs. When we need six trains to fill a ship heading to customers overseas, we can call on Garden City to load a couple of trains that will head to the port.”

GCC’s 21 grain locations, located primarily in southwest Kansas, annually source 30 million to 36 million bushels of corn, hard red winter wheat, sorghum and soybeans. Grain from GCC locations is trucked to River Valley Terminal.

Connections spur success

The terminal has been humming since it became operational in August 2024. Millions of bushels have already moved through the facility, mostly marketed by CHS.

The terminal is served by BNSF Railway and CHS is one of BNSF’s largest freight customers. The facility’s 1.5-mile loop track can handle a unit train – up to 125 cars, with the typical train length of 116 cars – which carries about 425,000 bushels of wheat or 450,000 bushels of corn or sorghum. It takes no more than 10 hours to fill or unload a train at the highly automated terminal.

Outbound trains often head to export facilities in Houston or the Pacific Northwest operated by TEMCO, a joint venture between CHS and Cargill. The trains also deliver grain to processors in Mexico and the U.S.

“CHS has the best sorghum connections in China, which is usually the biggest export market for that grain,” says Mike Wisner, GCC vice president of grain. “Before that market shut down this spring, CHS bought two unit trains of sorghum from us in November 2024 that were exported to Africa through the TEMCO port at Houston, which helped us move a lot of bushels and keep harvest moving.”

“Another success story for [GCC] members is we’ve been able to move quite a bit of wheat through River Valley Terminal and CHS, which allowed us to make good margins on those bushels and turn over space in our facilities to make room for more crops,” adds Lindy McMillen, GCC director of grain trading. “That’s a win-win.”

Handling grain from farm to consumer through the cooperative system is another win for owners, explains Jeff Boyd, CEO of Garden City Co-op. As a CHS member cooperative, “Garden City participates in the additional economic value that’s created through CHS patronage and equity retirements.”

Local demand

Beef feedlots and dairies are the primary corn markets in the southwest Kansas, followed by ethanol plants, Wisner says. Local production dictates how much corn needs to be shipped in. In a drought year, he says that can be more than 70 million bushels.

GCC buys corn from CHS and member cooperatives in the Midwest to sell locally. Corn is shipped in via rail to River Valley, one of the few facilities in the region that can offload unit trains. Cooperative owners benefit from that margin opportunity.

“It’s a natural relationship that we want to continue to foster,” says Griffin, “to help grow the grain business between the two cooperatives.”

Grain is unloaded at cooperative-owned River Valley Terminal in Holcomb, Kan.

Competition and need

Maddux grows corn, hard red winter wheat and sorghum on his family farm near Deerfield, Kan. He says competition for grain created by the River Valley Terminal benefits all farmers in the region.

WindRiver Grain – a train shuttle loader facility with 8.7 million bushels of storage in Garden City – has been a major grain buyer and valuable gateway for grain exports in the region since the late 1990s. Even though GCC is part owner of that company, Maddux says there’s enough business for both shuttle loaders to succeed.

“I’ve seen stronger basis levels, especially at harvest, because of the competition that now exists in the marketplace and more market access,” he adds. “I like competition. It keeps people grinding to get you the best deal and serve the customer better.”

GCC officials say storage shortages have occasionally slowed harvest progress. River Valley Terminal, with 1.2 million bushels of capacity and the ability to ship out large volumes, helps mitigate bottlenecks.

“There will always be a need to move grain,” Maddux says. “We were filling up all the time and needed a way to move more bushels and control our own destiny. To have another delivery option for corn before it goes down in the Kansas wind is important.”

Cooperatives were founded on the principle of farmers working together for the greater good. “Our relationship with CHS strengthens our business,” Maddux says. “We have a partner that has our back.”