A bio-diesel plant in southwest Missouri is no longer buying grain after the State Agriculture Department suspended its grain dealer’s license.
State Agriculture Director Jon Hagler assures farmers this isn’t the same as problems experienced last year.
“Again, this is not a fraud situation. This is not anything of that nature,” Hagler tells the Missourinet, referring to the T. J. Gieseker Farms and Trucking Company fraud case in Martinsburg and the bankruptcy of the Gallatin Grain Company.
Hagler says the department has been working with the Prairie Pride board of directors prior to suspending the grain dealer’s license. Hagler says he is hopeful the company will be able to regain its license and continue its bio-diesel operations in Deerfield.
“And, hopefully we’ll be able to do that and accomplish that and move forward, but that remains to be seen. Our role at the department, of course, is to make sure we protect those farmers and grain sellers.”
The State Agriculture Department has been named trustee of Prairie Pride after court documents filed in Vernon County disclosed a $2.4 million dollar debt against a bond of only $300,000. The court has authorized the department to seize the grain and grain-related assets of the company. An audit is being conducted and Hagler is confident the assets of the company are sufficient to pay farmers and grain dealers.
The company voluntarily quit buying grain earlier in the month, stating it didn’t have the resources necessary to make prompt payment. Company officials blame the loss of biodiesel incentives from Congress. They voluntarily stopped buying grain. Company officials informed state agriculture officials they couldn’t honor contracts to buy grain in March and April. Prairie Farms began production in late 2007, a $72 million plant, completely owned by producers with a goal of producing 30 million gallons of biodiesel annually.
The financial difficulties in Deerfield came to light even as United States Attorney’s Office in St. Louis announced that Cathy Gieseker had been sentenced to nine years in prison for a $27 million dollar grain fraud scheme in north-eastern Missouri. Gieseker operated a trucking and grain marketing business from her home in Martinsburg. Her “Ponzi” scheme collapsed in February of last year, defrauding approximately 180 farmers who contracted with her to market their grain. Gieseker, who is 45, pleaded guilty in November.
The Gallatin Grain Company, located in northwest Missouri, went bankrupt in February of last year as well.
AUDIO: Brent Martin reports [:60]
