KINGSBURY, Ind. — A grain elevator in Indiana is booming as a result of demand for high-protein feed grain, rising sharply from dairy farms thirsty for water relocating here from out West.

 

Kingsbury Elevator in just a few short years has gone from accepting single railcars of feed grain from Canada, to trains pulling 25 cars of the grain that later gets delivered by truck to feed mills and dairy farmers within a 300-mile radius. The company, less than 30 miles from the southern tip of Lake Michigan, is about to embark on another expansion that will allow 100-car trains to offload at the facility.

The elevator brings in canola meal, a byproduct of grain processing, from Canada in the province of Saskatchewan. Ed Lindborg, owner of the elevator since 1978, said quadrupling the amount of product coming in means lower freight costs that he can pass along to his customers.

“We’re going to be one of the least-cost suppliers of this product,” he said.

Lindborg will invest about $3 million on increasing from three to six the number of double service tracks leading into the facility, and increasing the elevator’s ability to receive, store and distribute greater volumes.

In 2014, he spent $4.5 million on a similar expansion that increased the number of double service rails coming into the plant from one single line.

He said fueling much of the growth is greater demand for canola meal from Western dairy farmers coming to Indiana, Ohio and Michigan the past decade or so to have a more reliable supply of water for their herds. “There’s cheaper land here and there’s the availability of water,” said Lindborg.

Also contributing is the Canadian National Railroad, obtaining a line around the rail congestion in Chicago, which has cut delivery times from Canada to his operation by 50 percent, said Lindborg. “From six days to three days we can receive a train here.”

Dairy farmers from states like California and New Mexico are also fleeing to the Midwest for lower-priced feed grain and to escape factors like urban sprawl and more regulations. 

 

Seeing opportunity to help struggling rural communities, states like Kansas have created websites dedicated solely to recruiting dairy farmers.

Despite the flight, statistics compiled by the USDA show California remains firmly seated as the top milk producer in the nation, with more than 1.7 million dairy cows in 2016. Wisconsin was next, though, with close to 1.3 million head.

Indiana, Ohio and Iowa were at or close to the top 10, with anywhere from 184,000 to 265,000 dairy cows each, respectively, USDA figures show.

Mary Jane Thomas, of the LaPorte County Office for Economic Development, said another dozen or so jobs are projected to be added from the Kingsbury Elevator expansion, to the current workforce of about 40.

Kingsbury Elevator has existed since the 1870s, when the railroad first came through. The elevator also brings in from Canada oats and flaxseed, along with potash. Once the expansion is finished, Lindborg said he’ll have a total storage capacity of about 140 tons – still miniscule compared to the volumes handled by much larger, corporate-owned elevators.

“This industry continues to consolidate and is dominated by the big corporations. I guess you got to keep up with the trend,” said Lindborg.