September 4, 2012

Japanese firm builds grain elevator in North Dakota

In order to have an easier access to the wheat Japan already imports from the upper Great Plains, a Japanese conglomerate is building a new grain elevator in south western North Dakota.

Jim Peterson, marketing director for the North Dakota Wheat Commission, said Japan buys about 24 million bushels of the state's hard red spring wheat annually. Hard red spring wheat is used to make bread, rolls and other baked goods.

"Japan has a huge amount at stake in North Dakota production," Peterson said.

United Grain Corp., an exporter of wheat, corn and soy and a part of Mitsui & Co. Inc., is building an US$18 million grain elevator near Bucyrus, about 60 miles south of Dickinson. It will be capable of storing one million bushels of grain, and United Grain President Tony Flagg said he expects to be able to load 25-30 shuttle trains annually.

Mitsui is also building new elevators at Conrad and Culbertson in Montana, Flagg said. The company already runs a grain elevator west of Billings, Mont., and United Grain operates an export facility in Vancouver, Wash.

"Much of the wheat belt is aligned with existing exporters," he said. "We need to get close."

The new elevator will give North Dakota farmers another option for selling their grain and could improve the prices they receive, Flagg said.

"As we increase our capacity in the middle of the supply chain, there'll be more competitive bidding, to the advantage of the American farmer," Flagg said.

The new elevator will compete with two farmer-owned cooperatives in the region, Scranton Equity and Southwest Grain. The new elevator "is not huge, but it's enough to get their foot in the door," said Jim Bobb, Southwest Grain's division manager in south western North Dakota.