DONNA, Texas (ValleyCentral) — Sorghum growers in the Rio Grande Valley might struggle to find storage for their grain after a Donna-based grain storage facility filed for protection from bankruptcy earlier this year.
“It’s gonna severely disrupt the grain harvest in the Rio Grande Valley,” said Webb Wallace, executive director for Cotton and Grain Producers of the Lower RGV.
The Texas Department of Agriculture suspended the license of Garcia Grains after an audit found $20 million in grain was missing from its inventory compared to the grain the company had on its records. Wallace says that is equivalent to 40,000 acres of sorghum.
“In the Valley, there’s only a small handful of grain buyers and storage facilities, Garcia Grain has been a major player, and with the closure of those facilities, there are fewer unloading points, and there’s less storage available,” Wallace said.
Harvesting season is just a few months away and if elevators are shut down, it would make it very difficult for farmers to find proper storage for the grain, which could cost them thousands of dollars.
The closure impacts four of the company’s locations in the RGV; Progreso, Santa Rosa, Donna, and Edcouch. Farmers who have sold grain to the trading company are struggling to get their funds back.
“There are farmers that have sold grain to Garcia Grain and have not collected. They are now unsecured creditors and the bankruptcy and unsecured creditor is at the end of the line to get paid. They may or may not ever get their money on that grain or may get pennies on the dollar for all we know,” Wallace said.
The shutdown of the grain elevators raises concerns with local growers who depend on these storage facilities to hold their crops.
“Where they’re gonna go with the grain, they may have to ship it up north to more elevators. You know a couple of hours north and you know it costs money to have their trucks on the road. It could lead to a more expensive harvest which in a year with no rain and crop not looking so promising because right now, that could really hurt a lot of farmers,” said Jacob Pekar, a local farmer.
Garcia Grain is responsible for a large portion of storage in the Rio Grande Valley. The lack of grain elevators would create more traffic for trucks to deliver their grain.
“It’s gonna cause backups, if there’s only a few places to take it. When everyone was harvesting grain at the same time there was gonna be a lot of trucks backed up waiting to deliver that grain to the available, available elevators. If we don’t have the storage like we did the previous years and we make a good crop harvest is going to be pretty tough,” Pekar said.
Officials with Garcia Grain Trading Inc. are expected back in court on Thursday. Company officials would not comment.