Cargill officials say they have reached an agreement to acquire the grain storage and crop inputs assets of Northstar Grain LLC and associated properties in Decatur, Mich. The facility has earned some notoriety through its longetivty and one of its prior owners.
Northstar was first operational in 1849, making it one of the oldest working mills in the country. Additionally, previous owner Mike Stamp declared for Chapter 11 bankruptcy in November 2012, with estimated liabilities exceeding $50 million. Northstar has remained open since that time.
Stamp, who farmed more than 40,000 acres in southwest Michigan, purchased Northstar in 2007. He soon made major upgrades, including an initial boost in bin capacity from 150,000 bu. to 400,000 bu. Stamp says this was a strategic move to allow him to store more of his grain, but he also later discovered and fixed up an old rail spur, connecting it back to the main line. The move gave area farmers more options for shipping their grain.
"The rail gives us a 20¢ to 40¢ margin advantage, and that pays back the initial cost pretty quickly," Stamp said in an interview with Top Producer.
Now Cargill will take the reins and has announced its plans for an additional $3 million in upgrades to the facility. The company will complete the construction of a 500,000 bu. storage bin and increase the capability to ship 75-car unit trains.
"We look forward to notably increasing the competitiveness of this facility as a market for our future customers and connecting it to the extensive grain and oilseeds supply chains we serve," says Ben Breazeale, leader of the Greater Indiana Farm Service group of Cargill AgHorizons U.S.
Assets include 4.5 million bu. of storage space for corn, soybeans and wheat, along with a crop inputs business. The site is serviced by the Norfolk Southern railroad, which allows local grain to be shipped to markets in the eastern and southeastern U.S.
The transaction is expected to be completed by June 30, 2013. Terms of the acquisition were not disclosed. You can read additional news about Stamp Farms here.