CHAPIN, Iowa — A north-central Iowa cooperative has expanded
its geographical footprint and marketing base to meet customers’ increasing
“Our farmers are getting more sophisticated. They have
higher demands and expectations of what they expect from a grain dealer,” Kevin
Gray, AgVantage FS grain marketing and operations manager, said during a recent
“We talk a lot about the three S’s, and that’s speed, space
and scale. We’re trying to gear our business up to be in position to handle the
farmer of the future. Those are the areas that we really feel like we have to
expand in order to be viable in the future.”
AgVantage, a division of Growmark, made the move to ramp up
its grain marketing efforts with the expansion of the grain facilities in both
storage and rail-loading capacity at Chapin.
There were four separate rail facilities in the Chapin area
about 10 years ago, including Chapin’s 50-car loading capacity. The nearby
facilities of Sheffield, Coulter and Hassell each had 25-car loading
At that time, Union Pacific Railroad already had put into
motion going to the shuttle trains with 75-car and 100-car units and requiring
the larger units be loaded in 15 hours.
“It was at that point that we made the decision to really
get into the game of being a really large loader, so we consolidated all our
rail loading operations from the surrounding elevators and brought it here to
Chapin,” Gray said.
The main U.P. rail line is about a half-mile from the Chapin
elevator, and a spur connects to the main line to the west.
“They bring in 100 cars on the spur, and that’s when our
crew goes to work and had 15 hours to load the train. It’s a high-speed
facility,” Gray said.
“We’re sitting in a great spot — relative proximity to
ethanol plants and some of the other competitors that we have in the area. It’s
really a great spot to have a rail terminal at.
“We kind of operate on a hub-and-spoke-type strategy. When
the U.P. is our market, we bring a lot of grain in from our outlying facilities
— Alexander, which is about 15 miles away; Sheffield is five miles away. This is
the rail head, and we put it on rail right here.”
He noted the expansion of ethanol in the state.
“So every day we’re evaluating the best options. How do we
handle the grain? Do we put it on rail or are we going to bring more value back
by sending it into the ethanol plants? We have a lot of options that we’re able
to ship into from this location and this company,” he said.
“We’re really big on market access. Market access for a
grain company in a lot of ways determines your success in the business. We have
the ability to go into multiple different markets from this location.”
AgVantage’s grain market is predominately to the cattle and
dairy facilities in the southwestern U.S.
“We can also take trains out of Chapin and back into
Clinton, Iowa. There’s a very large corn-processing plant at Clinton. ADM is
there. They can be a big buyer of our grain from Chapin,” Gray said.
“We can also go to Gulf of Mexico and also ship into Mexico
and work them into the Mexican market when that market needs our grain.”
The newest market potential is the Pacific Northwest.
“The Pacific Northwest is what we consider Oregon and
Washington, which has the ability to take ships off the west end instead of
ships coming through the Panama Canal and into the New Orleans market. The
expansion over the past couple of years has been in the Pacific Northwest,” Gray
“I think I’ve heard estimates of expansion as high as 50
percent in that whole Pacific Northwest marketplace, whether it be new space,
locations that can take more trains at individual elevators. It’s a shorter haul
of the grain into Japan, China and the Southeast Asian market where a tremendous
amount of our grain is being shipped into.
“There is just a real freight advantage to ship it from the
west end instead of through the Gulf and the Panama Canal. That whole market in
the Pacific Northwest is really expanding as they try to gear up for more
Chinese demand for both corn and soybeans.
“At this point we’re still a tributary primarily to
southwest, but we’re hoping at some point in time that Pacific Northwest market
will need some central Iowa grain and we’re able to ship into that
“What that means is that the more markets we have, the
better value that we at AgVantage can capture, as well as that much better value
we can pass on to our customers and be that much more competitive in the
AgVantage covers 27 counties in Iowa and five in southeast
Minnesota, and Chapin serves as one of its core grain facilities with 40 percent
of its total grain handled through the facility.
“We do about 10 million to 12 million bushels a year through
this facility,” Gray said. “Of all of our facilities that we have with
AgVantage, Chapin is by far and away our workhorse. We average 30 to 35 trains
“We do cover a large geography, but at the same point
customer service is the No. 1 priority for us. We try to do everything we can to
take care of the customer.
“We operate on four core values within the grain division
that we base our business off of. We want to keep our customers profitable, we
want to make sure they’re competitive, we try to reduce their risk and we want
to make doing business with AgVantage Grain Division as comfortable and easy as
“The Chapin facility has a storage capacity of 3.8 million
bushels. We have three receiving dumps with a total receiving capacity of 30,000
bushels per hour,” noted Barney Bartels, western regional grain manager and
Chapin operations grain manager.
“Our drying capacity today is 5,000 bushels per hour.”
Three 105-foot diameter storage bins were installed in 2006.
Each has a capacity of 750,000 bushels.
Future expansions are on the horizon for Chapin. “We have
open space for a couple more 105-foot diameter tanks,” Gray said.
“We also space where we want to put in another truck dump, a
new high-capacity dryer and more capacity to handle not only our efficient
producers, but also if we see the 300-bushel corn down the road that a lot of
people are talking about.”
While grain is a large and expanding part of AgVantage FS,
the company also is involved in the sale of seed, crop protection chemicals,
fertilizer, applicators, bins and accessories and fuel and offers custom
application and precision farming. Ag finance and crop insurance are among the
other services offered by AgVantage.