Senator Billie Sutton is making the financial collapse of Hetland-based H&I Grain an issue in his campaign for governor:
Recently, South Dakota’s Public Utilities Commission shut down H&I Grain. Hard-working South Dakotans may lose out on millions of dollars, and this isn’t the first time this has happened to farmers and ranchers in our state. Yet the state government has been unresponsive in providing the adequate safeguards.
Our state needs leaders who will stand up for hard working South Dakota families. We need to change our laws and defend our farmers and ranchers [Sutton for Governor campaign, fundraising e-mail, 2017.08.03].
H&I Grain, which has facilities in Hetland, De Smet, and Arlington, apparently owes ag producers over seven million dollars and has only a $400,000 bond. Owners Duane and JoAnne Steffensen say in a federal lawsuit that the money is missing because their son Jared got addicted to online commodity trading and blew six to ten million dollars. According to a July 21 letter from PUC Grain Warehouse Division Director Jim Mehlhaff, H&I Grain “took deliberate steps to conceal the fact that they were out of compliance with the financial licensing requirements” in 2016. The PUC suspended H&I Grain’s license on June 23 and revoked it on July 24.
Senator Sutton joined a unanimous vote in 2013 to update bond requirements and other regulations on grain warehouses and buyers in the wake of the last big elevator debacle, the collapse of Anderson Seed Company in 2012. Sutton did not get a chance to vote on a 2013 proposal that would have put farmers first in line for compensation from a busted grain buyer or warehouse; the Republican majority killed that proposal in the House.
As in the Anderson case, the PUC is choosing not to seize H&I’s assets because “the risks and costs of doing so would outweigh any benefits to grain sellers and other creditors as all assets of H and I Grain are encumbered by a secured creditor.” The PUC is limiting its further action to disbursing the $400K bond to producers left hanging. The PUC docket includes letters of intent from 36 producers seeking a piece of the bond.