Huge Grain Elevator Complex Coming to Hebron -- Huge Story, But Not a Bakken Story

In the big scheme of things the news of more grain loading capacity in North Dakota probably won't make any difference to Warren Buffett's bottom line, but his decision to buy Burlington Northern Santa Fe railroad (BNI) last year was brilliant. The timing could not have been better.

His purchase of BNI came just as interest in building railroad oil loading terminals in the Bakken began to explode.

I'm reminded of the BNI purchase once again with the news that a subsidiary of Archer Daniels Midland is going to put up a multi-million dollar concrete grain elevator complex next to the BNI railroad tracks outside Hebron, North Dakota.  The story is in the Bismarck Tribune.

The company has Morton County zoning approval for a 195-acre site on Old Highway 10 outside Hebron, enough for towering concrete silos and a round track to load 110-car grain trains bound down the BNSF Railway mainline to shipping ports.

The elevator will need 11 million bushels of grain annually to make it operate efficiently. Folks around Hebron feel there is not enough grain in the local area to support such an endeavor, and that grain will be coming in from other areas in North Dakota.

There is concern whether other elevators will be able to compete against this behemoth. They admit that the state needs more railroad grain capacity. (That's an understatement: for decades, there has been a small but very vocal group threatening BNI with lawsuits for inadequate railroad wheat loadings and their virtual monopoly status in the state. The new elevator should help alleviate the shortfall.)

*******

An article in that same edition suggests that the Archer Daniels Midland complex is just one of several huge elevator projects on the books in that part of the state. When all is said and done, there will be as many as four huge elevator complexes, all along the BNI line, in this general area.

*******

Hebron, North Dakota, is 60 miles east of Dickinson, North Dakota.