PIERCE, Neb. (AP) — The failure of a northeast Nebraska grain elevator earlier this year is expected to cost area farmers more than $4 million.
Officials with the state Public Service Commission said this week they expect to raise $4.7 million from selling the grain Pierce Elevator Inc. held when it closed. The business also had $880,000 in bonds that will help pay claims.
But 231 farmers have filed claims worth $9.7 million against the company. The amount of compensation farmers receive will vary based on their situation.
Pierce Elevator Inc. operated grain elevators in Pierce, Foster and Randolph. It was storing 660,000 bushels of corn and 130 bushels of soybeans when it closed in March.
John Fecht, who oversees the commission's Grain Warehouse Division, said farmers who can prove they were storing grain at the elevator will get most, if not all, their money back.
But farmers who sold $4.2 million in grain through the elevator and didn't get paid will be lucky to receive 10 cents on every dollar they are owed.
"This is a little bit difficult for people to understand," Fecht said at a hearing Tuesday. "We've tried to warn you that it's not going to be a healthy recovery."
The Public Service Commission will decide in late August or early December how much each farmer will be paid on claims.
In the past, regulators have discussed proposing an insurance fund that would help cover more of farmers' losses when grain elevators fail.
But farmers and grain dealers weren't thrilled with the idea that would have required them to pay millions into a fund to help cover losses, so it didn't move forward.
One of the last sizeable grain elevator bankruptcies in the state happened in 2008, when Alvo Grain and Feed filed for bankruptcy protection. In that case, farmers who sold their grain through the elevator but weren't paid received 12.4 cents for every dollar of $2.4 million in losses they claimed. An additional $1 million in claims was denied altogether.