BLOOMING PRAIRIE – Members of Farmers Cooperative Elevator Association can breathe a collective sigh of relief.

Friday, August 06, 1999

BLOOMING PRAIRIE – Members of Farmers Cooperative Elevator Association can breathe a collective sigh of relief.

A buyer stepped forward Thursday to purchase the grain elevator and keep it open.

The elevator opened in 1895, and is the area’s last independent business of its kind in the area.

"I don’t think we’re going to regret what we did," said Rick Klemmensen, member and president of the association’s board of directors.

The new owner, Blooming Prairie Grain, is a group of nine area grain farmers headed by Jim O’Connor. The purchase price was $240,000 for the facility, its equipment and all stock in the association.

"This elevator cannot be closed. It will not be closed," O’Connor said, when his successful bid was announced to members at a special meeting at the Blooming Prairie Servicemen’s Club Thursday night.

O’Connor immediately outlined several goals the new owners have for the elevator located along U.S. Highway 218 in Blooming Prairie. They include improving the image of the business, increasing storage capacity, offering competitive bids for farmers’ grain, retaining management and employees, working to guarantee a "little return" on the investment of the owners, creating new job opportunities for employees, expanding to use high-technology "probe" equipment to test grain and improving the business offices and "Absolutely no speculation contracts."

The latter and specifically the hedge-to-arrive debacle of the mid-1990s was blamed for financially strangling the Farmers Cooperative Elevator Association in debt and forcing the sale.

Forty-eight hours earlier also at the Servicemen’s Club, Klemmensen and other directors faced a grim-faced crowd of members to explain the situation.

With short-term debt of $942,882 and long-term debt of $274,000, the writing — in red ink — was on the wall about the elevator’s future, the directors told the members Tuesday night.

Huge interest payments on HTA contracts were draining the elevator of its financial reserves. Coupled with grain price uncertainties and fierce competition, the directors asked the members to approve liquidation of the business and seeking a buyer.

By a 46-to-9 paper ballot vote, they agreed with the directors.

Klemmensen set a deadline of 5 p.m. Thursday for bids and three were received.

In explaining the directors’ choice of Blooming Prairie Grain’s bid, Klemmensen told the directors, "We hope what we have done will meet your approval. Only time will tell."

O’Connor said he formed a group of investors because, "Nobody else was stepping up to the plate."

HTA grain will be allowed to run through the elevator to help the cooperative collect its debt.

With the harvest coming soon this fall, the elevator’s storage bins are currently full, but grain will be accepted, according to O’Connor, "as soon as the train comes to haul some to the river."

O’Connor has farmed in the Blooming Prairie area for 15 years and, he admitted, "I’ve had some heartache and learned a few lessons.

"All I’m asking for is to give us a chance," he said. "We’re going to keep this elevator locally owned and operated."

He also said the community of Blooming Prairie must make an attitude adjustment.

"It’s the farmer who keeps the community here. It’s agriculture," he said. "It’s high time that the community of Blooming Prairie understand that."

Pending state approval of licensing and bonding, the transaction will be approved Aug. 31 only a day before the cooperative’s largest creditor, a St. Paul bank, was due to call in its near-$1-million loan to the elevator.