Pay woes for grain growing tendrils

Concern raised in 2 other states

Grain silos near Brinkley are owned by Agribusiness Properties LLC, a sister company of Turner Grain Merchandising. The operation was shut down temporarily by federal agents on Aug. 14 after they found no grain in the facility’s five elevators.
Grain silos near Brinkley are owned by Agribusiness Properties LLC, a sister company of Turner Grain Merchandising. The operation was shut down temporarily by federal agents on Aug. 14 after they found no grain in the facility’s five elevators.

The troubles of Turner Grain Merchandising in Arkansas have spread to other states.

Farmers in Mississippi and grain processors in Louisiana say they have not received money they are owed by Turner Grain. And the firm is operating without a license in Mississippi.

The information, which appears in state court documents and arose in an interview with a Mississippi farmer, shows that the financial problems with the firm affect farmers in at least three states and lends support to agricultural officials' beliefs that the full scope of the grain dealer's defaults could reach several tens of millions of dollars.

Arkansas farmers who say they've been financially damaged by Turner Grain have been given 90-day extensions on repaying their federal crop loans.

Farmers in Arkansas said in two court cases filed last month that their harvests were delivered to Turner Grain but they have not been paid. In one case filed in Lee County Circuit Court for eight farmers, damages were not specified, but one farmer said in a subsequent affidavit that he is owed $700,000. In another, filed in Lonoke County Circuit Court on behalf of four farmers, the amount was listed at $300,000.

On Sept. 5, Dale Bartlett, partner with Jason Coleman in Turner Grain, filed in U.S. Bankruptcy Court for Eastern Arkansas for personal bankruptcy protection under Chapter 12.

The grain processors in Louisiana and farmers in Mississippi who have been selling their harvests to Turner Grain say they have not been paid about $4.7 million.

Kennedy Rice Dryers LLC of Mer Rouge, La., and Planters Rice Mill Inc. of Abbeville, La., say in a lawsuit filed Sept. 5 in Monroe County Circuit Court that Turner Grain and affiliate Brinkley Truck Brokerage LLC owe them a total of $3,071,839.86. Mer Rouge is in northeast Louisiana. Abbeville is in the south-central part of the state.

Kennedy says in its complaint that it has not been paid $2,372,915.70 for corn that Turner Grain contracted to buy, and Planters says it is owed $698,924.16, primarily for corn, but also for rice.

In another case, Mississippi Delta farmer Harper Ross recruited five other farmers and put together an agreement to provide 400,000 bushels of corn to Turner Grain, starting in late July.

Mississippi requires grain dealers to be licensed by that state. Turner Grain is not licensed there, according to Julie McLemore, director of the Mississippi Department of Agriculture and Commerce's Bureau of Regulatory Services. It had been licensed in 2011 and 2012, but not in the past two years, McLemore said. No complaints were filed against it during its two years as a licensee, she said.

It is not licensed under the Mississippi Grain Warehouse Law either, which would allow Turner Grain to buy grain in the state. The Mississippi law allows for anyone licensed under the U.S. Warehouse Act to be a dealer in the state.

However, Turner Grain Merchandising is not licensed under that federal act, according to Ned Bergman, chief of the Examination Division of the U.S. Department of Agriculture.

A U.S. Department of Agriculture license was issued to Agribusiness Properties LLC, a sister company of Turner Grain, Bergman said.

Ross signed a contract with "Turner Grain, Inc." -- not Turner Grain Merchandising -- and the buyer's signature on the contract is illegible, according to Ross and his attorney Scott Phillips of Greenville, Miss.

Operating without a license in Mississippi is a misdemeanor.

Louisiana requires a license for grain dealers. However, that requirement is waived when a dealer buys from a grain processor, such as Kennedy or Planters, rather than a farmer.

Arkansas does not require licensing of grain dealers at all. A bill in 1991 that would have established a framework for licensing grain dealers died in an Arkansas legislative committee.

The Legislature is to take up the matter in its next session, which starts in January.

By Aug. 12, Ross said in an interview last week, Turner Grain had picked up about 335,000 bushels of grain valued at about $1.7 million -- "it was going full blast." But the next day, Turner Grain trucks did not show up to pick up more grain, he said.

On Aug. 13, Ross said he drove to Brinkley to talk to someone at Turner Grain headquarters after becoming concerned that "things didn't add up."

He said he has been doing business with Turner Grain Merchandising for several years. In the past, the firm would send a representative by plane to the Cleveland, Miss., airport and the deal would be finalized there.

On Aug. 14, agents for the U.S. Department of Agriculture, responding to reports about the operation of the company, shut down the storage operation for Agribusiness Properties LLC, after they found no grain in the facility's five elevators near Brinkley.

Agribusiness Properties' operating license was temporarily suspended that day, and if its operations are not back to normal by Monday, the license will be revoked, according to the USDA.

Turner Grain said it had sold most of the missing corn to Gavilon, an Omaha, Neb.-based firm that sold it to Tyson Foods, Ross said. Gavilon's website describes the company as a global system for distribution of feed, food and fuel. It is a subsidiary of Toyko-based Marubeni Corp.

From the start of almost-daily conversations with someone at Gavilon's Catoosa, Okla., facility, on the northwestern terminus of the McClellan-Kerr Arkansas River Navigation System, Gavilon has maintained that Turner had been paid, Ross said.

Gavilon spokesman Pat Burke said Friday that the company "has determined that we've met all our contractual obligations and have paid for all grain purchased."

Meanwhile, Ross said Turner Grain "has done nothing but help me to get my money." Those helping include Neauman Coleman and Jason Coleman, owner of Turner Grain, Ross said. So far, he hasn't received anything. Neauman Coleman is listed as a defendant in two of the lawsuits and is an uncle of Jason Coleman.

Neauman Coleman, president of Neauman Coleman & Co., was a longtime rice trader at Dean Witter in Memphis, according to a 1993 New York Times article, and was quoted as an international grain expert in a Bloomberg News article in June.

Ross said Gavilon should imitate what Bruce Oakley Inc. of North Little Rock did when it said it would seek to place money it owes Turner Grain in a trust overseen by a judge to decide how to divvy it up among Turner Grain's creditors.

Phillips, the attorney for Ross and four of the five other farmers, said Friday that he is "keeping all options on the table" in pursuit of the money owed his clients.

SundayMonday on 09/14/2014

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