Grain elevators operators dragged down by MF Global woes,by Mark Steil, Minnesota Public Radio
Worthington, Minn. — Some Minnesota grain elevators have found themselves dragged by the bankruptcy of MF Global. The two are linked by grain futures contracts.
MF Global filed bankruptcy on Oct. 31 after the financial trading company lost a large amount of money in the European debt crisis. MF Global handles futures contracts for many Minnesota grain elevators, which were unaware they too would soon be affected.
The good news is that more than 80 percent of the money the elevators had tied up in the bankruptcy has been recovered, said Bob Zelenka, executive director of the Minnesota Grain and Feed Association. But there's a question of whether the remainder will be returned to grain elevator managers.
The elevators typically worked through a third party agent, which then did business with the bankrupt company, Zelenka said.
"They worked with MF Global, in terms of that process of investing in the futures market," Zelenka said. "With the demise of MF Global, that obviously left some elevators who worked directly or indirectly with them really with a lot of money unaccounted for, unfortunately."
Zelenka has spoken with Minnesota Sen. Al Franken who's pushing for a quick resolution of the matter. Franken said with millions of dollars still at stake, losing it could put some elevators out of business.
"A prolonged delay would have dire consequences for Minnesota's grain and feed industry," Franken wrote in a letter Wednesday to the chairs of two federal securities commissions: the chair of the Commodity Futures Commission and a trustee of MF Global.
"Further, a large loss of equity for grain elevators would have cascading effects on rural Minnesota's economy, affecting everyone from large cooperatives to small farmers."