Barney Bartels (left), AgVantage FS western regional grain manager and Chapin, Iowa, operations grain manager, points out the grain-handling capabilities of the facility during Growmark’s recent media tour. Kevin Gray (second from left), grain marketing and operations manager, said the company continues to expand its marketing efforts into new markets.
Barney Bartels (left), AgVantage FS western regional grain manager and Chapin, Iowa, operations grain manager, points out the grain-handling capabilities of the facility during Growmark’s recent media tour. Kevin Gray (second from left), grain marketing and operations manager, said the company continues to expand its marketing efforts into new markets.
CHAPIN, Iowa — A north-central Iowa cooperative has expanded its geographical footprint and marketing base to meet customers’ increasing needs.

“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 media tour.

“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 capabilities.

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 said.

“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 market.

“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 marketplace.”

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 per year.

“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 possible.”

“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.