Troubled S.D. grain elevator loses license
PIERRE (AP) – South Dakota regulators have revoked the operating licenses of a financially troubled grain elevator in the southeastern city of Gregory, while saying they hope the business can survive under different ownership.
The Public Utilities Commission has been monitoring the financial status of the Gregory Farmers Elevator for two years and discovered through audits that the business at several points had minimal operating capital or none at all. Regulators in late March suspended the grain-buyer and grain-warehouse licenses of the elevator and gave management 15 days to appeal or present a plan to address financial problems.
Neither happened, leaving the commission with no choice but to revoke the licenses on April 23, Vice Chairman Chris Nelson told The Daily Republic newspaper. The elevator still owes $307,000 to two farmers, though another debt of about $3,600 has been paid, he said.
The elevator’s board of directors has been trying to sell the business, and those efforts will continue, according to Nelson.
”I think at this point they realize they have to liquidate the facility and make sure everyone gets paid,” he said.
Commission Chairman Gary Hanson said the group hopes someone will buy the elevator and reopen it.
”We’re certainly interested in seeing the elevator change hands, because it provides a necessary service to the area,” he said. ”We’d like to see someone providing that service.”
Any buyer would have to apply to the PUC for new grain-buyer and storage licenses.
The commission’s influence in the operation of elevators is limited, Nelson said.
”It’s important to understand that grain warehouses, in the course of operating in the free enterprise system, will occasionally go broke,” he said. ”It’s not the PUC’s responsibility to interfere with what happens in a free market system. Our responsibility is to protect farmers and producers to make sure they get paid when these types of things occur.”