State Agriculture Officials: Money at Stake in Turner Grain Could Reach $50M

by Lee Hogan and Lance Turner  on Friday, Aug. 22, 2014 4:05 pm  

The Arkansas Legislature's joint committee on agriculture, forestry and economic development meeting Friday to talk about issues related to financial problems at Turner Grain Merchandising Inc. of Brinkley. (Photo by Lee Hogan)

Officials in Arkansas' agriculture industry think at least $20 million and possibly upwards of $50 million could be involved in the still-unfolding financial drama between Turner Grain Merchandising Inc. of Brinkley and the Arkansas farmers who could go without payment for their crops.

Mike Churchwell, a grain warehouse section manager for the State Plant Board, told a legislative Joint Committee on Agriculture, Forestry & Economic Development on Friday that estimates he's heard could easily be $20 million or more. 

Arkansas Secretary of Agriculture Butch Calhoun said he thinks the money at stake could be upwards of $50 million.

"Honestly, there is not much, if anything, that [the Arkansas Legislature is] going to be able to do to address that situation," House Speaker Davy Carter said to farmers during Friday’s hearing. "And you need to know that on the front end. I hate it, I'm sorry for you and my heart goes out to you. It's awful."

Carter requested the hearing last week after word began circulating that Turner Grain appears to be close to filing for bankruptcy protection, leaving the farmers with whom it does business worried about breached contracts and possible losses.

Two sources have told Arkansas Business that the company's losses could be in the millions.

Officials from Turner Grain have not answered repeated requests for interviews. The company had not filed bankruptcy protection as of Friday morning.

A group of eight farmers has already filed a lawsuit against Turner Grain saying they haven't paid for the grain they sold the company and alleging fraud. Meanwhile, two officers with Turner Grain have withdrawn their principal broker status with the National Futures Association.

While acknowledging there was little they could do, the legislative committee did approve an interim resolution asking the Farm Service Agency to extend the Commodity Credit Corp. loan repayment period for farmers suffering losses in the Turner fallout.

(More: Read a PDF of the resolution: Page 1 and Page 2.)

The committee met in an attempt to learn what went wrong with the Turner Grain situation and how to prevent the problem from happening again.

Currently, there are no laws regarding grain merchandising; regulations only cover grain stored in a warehouse. It's presumed that the Arkansas Legislature will address the issue in its next general session, expected to begin in January.

 

 

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