CHS Inc. officials notified local officials and the Wisconsin Department of Workforce Development that the company plans to permanently close the largest grain elevator in the Twin Ports.
The facility in Superior will cease operations effective Aug. 31, according to the notice provided to the Department of Workforce Development. CHS has not yet made a public announcement or responded to an inquiry from the Duluth Media Group.
The decision has been decades in the making with the decline in the volume of grain that transits through the Superior terminal, said John Griffith, senior vice president of global grain marketing for CHS.
“It’s not just a CHS decline,” Griffith said. “It’s an entire grain export from the Duluth-Superior port that has declined over the past couple of decades, and it finally reached the point where there wasn’t the critical mass of grain movements through the port anymore.”
He said with the progression of larger unit trains, and new facilities, grain can be moved to deep-water ports and moved on larger ships that have lower costs for transportation to reach the same customers.
“I think that has been kind of the evolution over time that has brought us to this point after nearly 90 years in the port,” Griffith said.
The difficult part of the decision was the employees, Griffith said.
The closure will impact 23 union employees, who will be permanently separated from the company Sept. 8. Two additional employees will continue to work until about Dec. 31.
“My heart goes out to them,” said Rep. Angela Stroud, D-Ashland, who was notified about the closure by company officials Thursday, July 10. “I understand it. I, myself, just got laid off last year. It’s extremely disruptive, and you know, frankly, depressing and scary. So, I understand what they’re going through and I really feel for them, and I’m here to help in any way I possibly can.”
Stroud encouraged anyone who has difficulty with the unemployment system to reach out to her office for assistance.
“It’s devastating anytime you lose a significant employer,” Stroud said.
Exports falling for decades
Superior Mayor Jim Paine, who was briefed on the closure Thursday morning, said he was told the reason is tied to the global economy and global shipping routes.
“It’s obviously bad news, especially for those employees, and we need to do what we can to take care of them, but this is one of the challenges of working with commodities-based industry,” Paine said.
Exports of grain by ship from the Port of Duluth-Superior have been falling for decades, down from a high of 9.2 million metric tons in 1978 to 645,000 tons in 2022, the lowest since 1890.
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The 2023 and 2024 shipping seasons were only slight improvements at 790,000 and 794,000 tons, respectively, according to port statistics. That is driven, in part, by a changing market.
For example, soybeans now go by rail to the West Coast, and the geographic area where grains were harvested before being sent to the port for transport has shrunk, among other factors.
And in late 2022, fewer ocean-going vessels, or salties, were reaching Duluth with wind turbine components, making it less likely — and more expensive — to send empty salties into the westernmost port on the Great Lakes.
Part of the problem was the war in Ukraine, which shifted European demand for corn and beans from the Black Sea to some Great Lakes ports like Chicago and Toledo. Salties discharging in lakes Michigan, Erie or Huron are less likely to sail empty to the Port of Duluth-Superior to fill up with grain, CHS officials said at the time. The war continues more than three years after Russia’s full-scale invasion of Ukraine, a major agricultural producer on the continent.
Despite lower shipping figures, grain has still moved through the Twin Ports by train, including at CHS. However, unlike shipping’s tonnage reports, the amount of grain moved by rail is not public.
Potential reuse of facility
“The CHS decision to cease operations at its Superior terminal is a disappointing blow to the Port of Duluth-Superior and the community as a whole,” the Duluth Seaway Port Authority wrote in a prepared statement. “Most immediately, our thoughts are with the employees who will be affected by this decision. We will work with the city of Superior to seek solutions that could lead to a more positive outcome, and hopefully, continued use of this grain terminal.”
“Those are really large and effective grain elevators so sitting empty and doing nothing is not its best future,” Paine said.
Stroud said she asked what would happen to the facility, and CHS representatives said they would be available to help transition the infrastructure CHS owns to any entities that might be interested.
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“It’s very possible that … another company would have interest in doing very similar activities at the facility,” Griffith said. “The facility is certainly still operational, so we will look to disposition the facility in the most effective and thoughtful way possible, up to and including a sale of the facility,” Griffith said.
“This is bad news for that pier and that terminal, but in terms of the port overall, the port is still growing, and the port is still performing very strongly,” Paine said. “We just had that $28 million investment in C. Reiss just a little ways over. There’s still growth and strength in global shipping, but it is a moving economy.”
Reporter Jimmy Lovrien contributed to this story.
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