November 21, 2019

Klemme: the Transformation of a Grain Hub

MaxYield KlemmeDec. 9, 2003, started as a typical, snowy winter day at the elevator in Klemme. By 4:45 p.m., however, everything blew up—literally.

“I didn’t know what happened at first,” said Adam Suntken, a MaxYield grain solutions specialist who was working in the office. “All I knew is that when you call 911 three times and the line is always busy, you’ve got a big problem.”

An explosion had blasted the top off the grain elevator, pulverizing some of the 800,000 bushels of corn in the structure into golden-orange dust that coated nearby buildings. While four people were taken to the hospital, everyone survived the accident.

“People felt the explosion up to two miles away,” said Pat White, MaxYield’s East Area team leader, who was transported to the hospital. “Some folks thought it was thunder.”

No one ever pinpointed the cause of the explosion, which destroyed Klemme’s 1.2-million bushels of grain storage. It was an inglorious end for the state-of-the-art concrete elevator built in 1979 that was said to be explosion-proof. The damaged elevator continued to smolder for months, and crews couldn’t finish cleaning up the site until July of 2004.

While the co-op was able to salvage some of the grain, the losses were staggering. “Klemme had been a grain hub until this time, but all that changed in one afternoon,” said White.

MaxYield KlemmeKlemme endures turbulent times

While the Klemme elevator went out with a bang, major changes had been reshaping the business for a number of years. During the 1970s, Klemme Coop Grain had been in a growth mode, adding the new elevator and a feed mill around 1979. Timing didn’t work in the company’s favor, however, and neither did the cooperative’s plan to lease its fleet of railroad hopper cars.

“The embargo that banned the export of U.S. grain to Russia occurred around this time,” recalled Kerry Hiscocks, MaxYield’s Klemme location leader. “The embargo hurt a lot of country elevators, including Klemme.”

Things weren’t any easier for area farmers as the 1980s Farm Crisis intensified in the Midwest, Hiscocks added. Like many Iowa farmers, he was paying 19% interest on his operating loan. As the farmers struggled, so did local cooperatives, including Klemme.

To stay afloat financially, the Klemme elevator sold its feed mill business to Land O’Lakes in the early 1990s. After Farmers Coop Society of Garner bought out the elevators in Klemme and Meservey in 1994, the fertilizer plant was phased out at Klemme around 1996.

“Through those tough times, we strived to maintain the liquidity people had invested in the co-op,” said Luverne Schmidt of Klemme, a former Klemme Coop Grain board president who also served on the Klemme-Garner board. “It was hard to lose Klemme Coop Grain, but we wanted to make sure the stock still had value.”

After Klemme became part of AGP Grain on April 1, 1999, new opportunities began to emerge. The Klemme location was strong in the grain sector, and the team could load a 75-car train in eight hours, said Suntken, who started with Farmers Coop Society in 1997. “They were upgrading Klemme to a 100-car shuttle-loading facility when the elevator blew up in 2003. Then we went from being a grain hub on the rail to a country elevator and truck shipper.”

MaxYield KlemmeLocal ties remain strong at Klemme

The Klemme location received a new lease on life when it became part of the MaxYield family in 2005. “Local control was a plus when MaxYield came in, because it brought a positive change in the company’s culture,” said White, who has worked in the cooperative system for 34 years. “It was good to

return to our cooperative roots.”

Today, the Klemme location includes seven full-time team members and one part-time team member. Providing grain solutions is a key role at Klemme, which takes in more than 75% of its grain in the fall. The location can hold 1.5 million bushels of corn and 500,000 bushels of soybeans. When MaxYield’s Klemme team members aren’t busy with grain duties, they assist other MaxYield locations by driving tender trucks and handling other duties.

In the wake of the tumultuous 1980s and 1990s, Klemme has worked hard to rebuild client loyalty. “We’ve got really good clients,” said Teresa Mosiman, who has served as Klemme’s client care leader since March of 2010.

Luverne Schmidt and his family purchase their fertilizer from MaxYield and also sell some of their grain to the Klemme location. “I appreciate the convenience and dependable service we receive at Klemme,” said Schmidt, who farms with his sons, Lonnie and Jamie, along with some of his grandchildren. “I’ve never felt like I needed to go elsewhere.”

The Klemme location also remains a favorite meeting place for the dozen or so retired local farmers who gather in the break room to visit each weekday morning from about 8 a.m. to 10 a.m. “If someone doesn’t show up for coffee for a day or so, people start to worry,” Mosiman said. These local connections remain strong at Klemme, said Suntken, who serves MaxYield’s East Region, including Klemme, Belmond, Meservey, Klemme, Garner, Britt, and the Hawkeye Pride feed mill near Corwith. “Both our clients and many of MaxYield’s team members have lived and worked in this area for years. You know everyone and look out for each other.”

 

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