April 23 – Cargill Closing A Major Malt Facility in North Dakota

Cargill is closing its malt facility in Spiritwood, North Dakota. This difficult decision was made due to reduced demand for local malt.

Cargill is closing its malt facility in Spiritwood, North Dakota. This difficult decision was made due to reduced demand for local malt.

The barley grown in this area is six-row barley (referring to the kernel placement). Two-row barley has fewer proteins and enzymes and more starch.  North Dakota’s climate is not as suitable for this more in-demand two-row barley, so this facilities performance has lagged behind.

Cargill is promising to honor all contracts through September 2018. However, it will not continue its contract-growing program.

The Spiritwood facility has a processing capacity of 410,000 metric tonnes/year (or 27.3 million bushels/year). On a daily basis, it uses about 1,418 metric tonnes of clean barley (or 65,000 bushels). This is the amount of barley demand that will be lost due to the plant closing.

The North Dakota Agriculture Commissioner, Doug Goehring, is concerned about how this will affect the barley farmers in the area, do to this demand loss. Although their two other North Dakota facilities remain open, Cargill is shifting their focus to Canada and Wisconsin. This is a trend that will exclude North Dakota farmers from the barley market. 

 

Cargill to close one of three ND malt plants

JAMESTOWN, N.D.—Cargill will be closing its huge malt plant near Jamestown—one of three in North Dakota— this fall.

The plant processes barley into malt for the beer and malt beverage industry

The plant closing will affect approximately 55 employees at Spiritwood, who may apply for other open positions within Cargill, either in North Dakota or elsewhere, said April Nelson, communications specialist with Cargill Corporate Affairs in Minneapolis.

The output at the Spiritwood plant has fallen based on a lack of demand for the locally produced malts, Nelson said. Area barley growers produce six-row crops that are now trailing in demand for two-row crops grown elsewhere, she said.

Two-row or six-row barley refers to the placement of kernels on the seed head. Two-row barley is currently more popular for malting for beer.

“The decision to close a plant is never easy, but reduced demand for six-row crops, a North Dakota climate not conducive to the more in-demand two-row crops and low utilization of the plant made the closure necessary,” Nelson said.

Growers were notified that Cargill would not continue its contract growing program prior to the 2018 season to encourage the transition to alternate contracting and growing choices, she said. Cargill Malt will honor existing contracts and supply malt out of Spiritwood until the end of September, she said.

Cargill Malt utilizes steam energy from Spiritwood Station, the coal-fired electric and steam generation plant operated by Great River Energy at Spiritwood, according to Lyndon Anderson, communications lead for Great River Energy.

“We just learned about those plans and we’re evaluating how the facility’s closure will impact Spiritwood Station,” he said.

Cargill Malt is adjacent to the Spiritwood Energy Park Association industrial park. The park currently houses Dakota Spirit AgEnergy, a corn-based ethanol plant. A soybean crushing plant is also currently in the planning and financing stages.

The industrial park and surrounding area were touted as a center for value-added agriculture processing barley, corn and possibly soybeans in the future.

Connie Ova, CEO of Jamestown/Stutsman Development Corp., said she was at a loss for words regarding the Cargill Malt closing.

“I am hoping they can place the workers with Cargill or with other local companies,” Ova said. “I just wish we had the other plant (soybean crushing) ready to go for them to move over.”

The Spiritwood plant started as Ladish Malt in the 1970s and was acquired by Cargill Malt, Nelson said. Cargill Malt currently has malting operations in 10 countries.

“Despite this closure, Cargill remains committed to North Dakota,” Nelson said. “We employ approximately 230 North Dakotans at our West Fargo and Wahpeton facilities, and will continue our support and investment in those communities.”

Cargill will offer transition benefits, severance for salaried employees, and will work with the union regarding bargaining unit employees, she said.

H/T: Inforum
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Lucia Larsen