Kingsbury County, SD An attorney for more than 50 farmers near De Smet says a grain company owes a combined $8 million for grain sold to the elevator.
The South Dakota Public Utilities Commission has suspended H & I’s grain buying license at locations in De Smet, Arlington and Hetland.
People in De Smet say H & I Grain Company has been a huge part of the community for years. It’s something area producers have counted on every harvest season, but this year, those producers say that trust was broken.
“We started getting calls from producers a couple weeks ago when they weren't able to pick up their checks after delivering grain,” Todd Wilkinson said
Wilkinson is the attorney for a large group of affected farmers; he said all of their grain is now gone, but the company is unable to pay what they owe.
“Millions,” Wilkinson said. “This is a huge impact on top of moving into drought conditions, poor grain prices, then you’re sitting here with a number of producers that have their entire 2016 production involved.”
Wilkinson says without that income, several area farmers could lose everything.
“This is just going to be a crippling effect on the economy in this whole region,” Wilkinson said.
“Anytime a farmer that's not paid for what they produced it’s a big deal and that's why we are going to do see assets are there and what we can do to convert those into some cash to make payments to the farmers,” South Dakota Public Utilities Commissioner Chris Nelson said.
Nelson says the PUC is currently auditing H & I Grain Company to see what they owe and what kind of assets they may have to cover this loss.
“Most of the elevators in the industry and state, we are licensed grain buyers and licensed as grain warehouses as well,” South Dakota Grain & Feed Association President Travis Antonsen said. “In H & I’s case, they were just licensed as a grain buyer.”
“So they are required by the PUC to have a $400,000 bond and it’s just woefully insufficient to handle all of the claims,” Wilkinson said.
Farm officials say the last time a grain company failed to pay farmers in South Dakota, the state legislature got involved and created that $400,000 bond requirement to offer farmers more protection. Now many farmers in the De Smet community hope the legislature will step in again to offer event further protections for farmers.
The Wilkinson Law firm says H & I Grain Company is still optimistic that some of their own pending lawsuits will be resolved so they can pay those farmers.
KSFY reached out to the owners of H & I for comment but have not heard back.