ST. PAUL – Global Processing Inc., based in Kanawha, Iowa, with operations in Hope, Minn., filed for Chapter 11 bankruptcy on Oct. 24. Anyone who has not received payment for grain or who had grain stored with Global Processing Inc. in Hope is encouraged to submit a bond claim with to theMinnesota Department of Agriculture(MDA). The Hope facility, in accordance with the law, held a $50,000 bond with the MDA to help grain sellers and depositors mitigate any losses.
This is the latest in a series of bankruptcy filings by grain buyers. Last year, Pipeline Foods filed bankruptcy and unsecured creditors received an estimated 1 percent to 1.9 percent of their claim. The facility held a $500,000 bond with MDA. This follows elevator failures in Karlstad in 2019, Ashby in 2018 and Porter in 2015.
“Minnesota Farmers Union (MFU) has argued since the Porter elevator failed in 2015 that the state’s bonding system doesn’t do nearly enough to protect farmers. Gov. Walz included the creation of a voluntary grain indemnity fund in his proposed budget this session and MFU lobbied hard in support of the proposal. As I said in my testimony, this will happen again. Unfortunately, it did, and farmers are left with little recourse to recover funds for delivered grain,” said MFU President Gary Wertish. “As of result of inaction on this issue, some southern Minnesota farmers will have been hit twice within the space of 15 months. We need to get something done on this. It’s time to join the more than a dozen states who have indemnity funds to ensure that farmers receive more than pennies on the dollars owed when grain elevators fail. “
The Des Moines Register reported that Iowa farmers will be able to file claims through their state’s indemnity fund, which may reimburse growers for 90 percent of their losses up to $300,000.