FOR IMMEDIATE RELEASE: April 13, 2022
MEDIA CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327
PUC resolves Avon’s Farmers Cooperative Elevator receivership with no losses to producers
PIERRE, S.D. – The South Dakota Public Utilities Commission is wrapping up the receivership of Farmers Cooperative Elevator (FCE) of Avon with no losses to producers or creditors. Following the sale of a portion of the cooperative, including the grain elevator, agronomy business and bulk fuel business, to Pride Grain in late March, all producers and creditors have been paid in full. In addition, through the receivership and sale, no jobs were lost. Pride Grain retained the employees that worked at the elevator and agronomy entities and plans to add more jobs in the future. All other employees were retained by FCE, which will continue to operate the fuel store and feed store.
“PUC staff did an outstanding job of stepping into a management role with a financially struggling grain buyer, working with multiple parties to bring in enough cash to make sure that all farmers were paid for their grain, and ultimately finding a buyer for the facility to keep that grain buying service in the community. I commend PUC staff and the board of the Avon Farmers Cooperative Elevator for working together for this outcome,” said PUC Chairman Chris Nelson.
The PUC, through its Grain Warehouse Program, provides oversight of the state’s grain storage warehouses and grain buyers, licensing qualified warehouses and buyers and analyzing their financial condition to protect payments to grain producers. Through its regular inspection process, PUC staff recognized financial difficulties at the facility that compromised FCE’s ability to meet its licensing requirements.
PUC staff requested and was granted by the First Judicial Circuit Court receivership limited to control of the grain elevator, which would allow the cooperative to continue operating the convenience store, farm store and fertilizer plant while utilizing grain assets to pay grain-related debt.
“I greatly appreciate the efforts of the PUC staff to find solutions that protect producers and strengthen the Avon community. A resolution like this, with no monetary losses to producers or creditors and no loss of jobs or important services, does not happen without a lot of hard work, cooperation and an unwavering commitment to do right by the people of South Dakota,” stated PUC Vice Chairperson Kristie Fiegen.
While the PUC has held receivership over the last 9 months, a number of strategies were implemented to secure payment of previously outstanding debts owed to FCE and finding a licensed grain buyer to lease the cooperative’s grain facilities which eventually led to the sale of the grain facility to Pride Grain. The process also included the PUC disbursing FCE’s grain buyer bond to eligible producers.
“This case is a success story,” said PUC Commissioner Gary Hanson. “The PUC’s grain warehouse and grain buyer licensing and inspection programs are designed to flag financial problems early so issues can be addressed as expediently as possible. PUC staff identified financial concerns in 2019, worked with the cooperative to make improvements and kept a watchful eye to pinpoint any new issues. PUC staff helped to prevent additional losses and find solutions that didn’t come at the expense of South Dakota farmers,” explained Hanson.
State banking director Bret Afdahl also appreciated the PUC’s work with the elevator. “Thank you for all of your work on the elevator in Avon,” Afdahl said. “I just received an update on the sale, and that is the best possible outcome for the community and surrounding area.”
While major duties have concluded, the PUC will continue its role as receiver while it winds up the remaining details and finishes some of the collections activities initiated to collect on aged receivables. This includes one bankruptcy proceeding in which FCE is the largest unsecured creditor. We would like to thank the Attorney General’s Office for their legal support in that proceeding.
View complete information about the PUC’s Farmers Cooperative Elevator dockets on the PUC’s website at www.puc.sd.gov, Commission Actions, Grain Warehouse Dockets, 2021 Grain Warehouse Dockets, GW21-002 – In the Matter of Farmers Cooperative Elevator, Avon, South Dakota.
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