Frigid temperatures this weekend prompt cold weather advisories

MPR News helps you turn down the noise and build shared understanding. Turn up your support for this public resource and keep trusted journalism accessible to all. 

Turn Up Your Support

Hansen-Mueller Co., which has grain elevator operations in Minnesota, has filed for bankruptcy. 

The Omaha, Neb.-based company is expected to owe hundreds of millions of dollars to farmers and creditors nationwide. In its bankruptcy proceedings, Hansen-Mueller Co. cited Wayzata-based Cargill as one of its largest creditors. It owes the Minnesota company over $2.5 million.

Grain elevators are crucial hubs for farmers, who use them to sell or store their grain.

The Minnesota Department of Agriculture is advising affected producers to file a claim with the agency to recover money owed to them by Hansen-Mueller. It’ll do so through the state’s grain indemnity fund.

to protect farmers from grain elevator failures. Minnesota has averaged a grain elevator failure per year since 2015.

The nearly $11 million fund has remained chiefly intact since its inception. But now that Hansen-Mueller Co. has filed for Chapter 11 bankruptcy, the fund will face its first test paying back the Minnesota farmers with ties to the company. 

Nick Milanowski is the Minnesota Agriculture Department Grain Specialist. 

“The idea here in Minnesota with this fund is that the producers are paid, and they sign over their rights to the [bankruptcy claim] to the department,” he said. “Then the department seeks to recoup the losses to the funds through the bankruptcy proceedings.”

He said that means there’ll be two metrics that’ll measure how successful the grain indemnity funds will be.

First, that the producers who are owed money get it in a timely fashion. And secondly, that the fund gets replenished again through Hansen-Mueller’s bankruptcy proceedings. 

“[The fund] means that our producers won't have to bear that burden [of navigating bankruptcy proceedings,]” Milanowski said. “That's something that the Department will work to navigate with our legal counsel and the AG's office, and do our best to replenish that indemnity fund.”

Milanowski said he’s aware of the importance of navigating this major bankruptcy, as many farmers may worry of losing out on a paycheck.

“We haven't cut any checks yet. We're still working through those claims,” he said. “So, we'll be asking the producers, after the dust has settled, on their satisfaction with the execution of the program.”

While Hansen-Mueller runs an operation out of Duluth, there’s 

 mere miles away in Superior, Wis. There may be cases where some farmers have done business with the Wisconsin elevator. 

If the title to their grain has transferred over to Wisconsin, the Minnesota indemnity fund would have no jurisdiction to reimburse those affected. 

“Each of these states have different laws and jurisdictions over the transactions that happen within their borders,” Milanowski said. “We’d certainly work with the producer to understand where that transaction happened and where the title of the grain transferred and connect them with the state to handle any claims that they might have.”

Conversely, if out-of-state farmers did business with the Duluth operation, they’d be entitled to the grain indemnity fund as long as the title to their grain transferred over to Minnesota.

Wisconsin’s indemnity fund though, works differently than Minnesota’s. Its fund is supported through licenses grain dealers purchase. And, according to a Wisconsin Trade public information officer, Hansen-Mueller does not hold one.

“Because the company was not licensed, it neither contributed to the Ag producer security fund, nor did it have individual security on file with the department, which could be used to pay producers,” the public information officer said. “So as a result of all that, Wisconsin's producer security statute does not permit the department to make payments to producers who sold grain to Hansen-Mueller.”

He was not able to immediately comment on what that’d mean to out-of-state producers who did business with the Superior-based operation.

Milanowski adds that farmers who file claims in-state are not guaranteed a 100 percent reimbursement of money owed to them. It’ll depend on the length and terms of the contract that the farmer has had with the grain buyer.

Regardless, he urged any affected producers to file a claim as soon as possible, as this will increase their chances of being served sooner.

Business and Economic News

Agriculture

NewsPartners

Homepage

Tadeo Ruiz Sandoval

Author

Hansen-Mueller Co., a nationwide grain merchandiser and processor, filed for bankruptcy. The company, based in Omaha, Neb., has grain elevator operations in Minnesota. It owes hundreds of millions of dollars to farmers nationwide.

Minnesota’s grain indemnity fund faces first major test with large grain elevator failure

Go Deeper.

Like this?