| FARGO, N.D. (AP) -- Cargill Inc. has stopped production
temporarily at the ProGold corn processing plant north of Wahpeton, citing
high natural gas prices and a seasonal drop in demand for corn sweeteners.
Plant general manager Richard " Red" Geurts said production
would be shut down indefinitely until conditions improve.
Cargill' s 126 ProGold employees will report to work on maintenance and
training during the plant' s idle period, Geurts said. He said processing
could resume by spring, when bottlers produce more soft drinks and use
more corn sweetener.
" We' ll know more in a few weeks, " he said.
The plant stopped receiving corn Tuesday. It will take about six days
for workers to process the corn already there, and the plant will keep
delivering corn sweetener from its inventory to some customers, "
maybe even for the duration of the idle, " Geurts said.
Cargill will continue to make lease payments to the plant' s owners --
Golden Growers Cooperative of Fargo, Wahpeton' s Minn-Dak Farmers
Cooperative and Moorhead, Minn.-based American Crystal Sugar Co.
The $261 million plant had a rocky start, opening in 1996 just as
market prices for its high-fructose corn syrup dropped sharply. A 10-year
lease signed with Cargill the next year brought stability to ProGold' s
operation and allowed Golden Growers to post profits for the last two
years.
Letters were mailed Tuesday to Golden Growers shareholders informing
them of the decision to idle the plant, said Mark Dillon, executive vice
president of the co-op.
Dillon said the decision to idle production would not affect income for
Golden Growers and the plant' s other owners. But that may not be the case
for co-op members, who are committed to sell to the ProGold plant 49
percent of the corn it processes.
Dillon said it was not clear how that agreement would be affected by
the temporary shutdown.
" Our No. 1 priority is to ensure every Golden Growers shareholder
is treated as fairly as possible, " Dillon said. " We don' t
know at this point what that means."
Geurts said Cargill was evaluating is contract with Golden Growers.
" It' s early, and we' re still working through any of the impact
on delivery obligations and our agreement with Golden Growers, " he
said. " But I do not anticipate, at this point in time, that it' s
going to be a problem."
Wahpeton City Administrator Shawn Kessel said Cargill' s decision to
keep the plant fully staffed was good news for the city' s economy, which
could take a hit if area corn growers lose income during the shutdown.
Kessel said Wahpeton' s other manufacturing businesses are doing well,
but the economy already feels the effects of rural belt-tightening in the
face of poor commodity prices.
" We' re happy to hear they' re not laying anybody off, " he
said. |