TEGMA Newsletter
October 2012
In This Issue
2012 Fall Symposium
Speaker Summaries
Panel Discussion
CME to acquire KCBT
Gavilon New Headquarters
Aflatoxin Blending
UP Advances Trackwork
Thank You Sponsors
Save The Date
Recent Transactions
Genesee & Wyoming Acquire RailAmerica
On October 1, Genesee & Wyoming Inc. (GWI) announced it completed the  RailAmerica Inc. acquisition and entered into a new five-year credit facility comprising a $1.87 billion term loan and $425 million in revolving credit.

After the deal closed, control of RailAmerica was placed into a voting trust, which will remain in effect until the Surface Transportation Board (STB) issues a final decision on GWI's application to control the short-line holding company, GWI officials said in a prepared statement. The board could render a decision sometime in the fourth quarter or in first-quarter 2013, they said.

GWI financed the $1.37 billion cash purchase price for RailAmerica's shares, the refinancing of $1.23 billion of GWI's and RailAmerica's total outstanding debt prior to the acquisition, and transaction- and financing-related expenses with about $1.85 billion of debt from the new five-year credit facility, $460 million in cash from recent public offerings of common stock and tangible equity units, and $350 million through a private issuance of preferred stock to The Carlyle Group.

In July, GWI announced it reached an agreement to acquire RailAmerica for $27.50 per share in cash. The purchase of RailAmerica's 45 regionals and short lines in the United States and Canada boosts GWI's railroad holdings to 108 in North America and 111 worldwide.
TEGMA Welcomes
New Member

TEGMA is pleased to welcome a new member since the our last newsletter.


Riverland Ag Corp

Level 3 Active Member

Jeremy Hjelm, Joe Fiereck, and Craig Reiners


Riverland Ag is an agricultural grain storage and supply chain management business that was started in 2006. It has purchased and operates 15 grain storage facilities, which are located in Minnesota, North Dakota, Wisconsin, Wyoming and New York, and in Ontario, Canada, with a total aggregate storage capacity of approximately 55 million bushels.  Ceres Global Ag Corp. ("Ceres") owns 100% of Riverland Ag Corp. ("Riverland Ag"). 




TEGMA Leadership




Todd McQueen

The Scoular Company 


First Vice Chairman

Mark Huston

Louis Dreyfus Commodities 


Second Vice Chairman

Brian Mehrmann

Gavilon Grain 



Board of Directors


Greg Edelblute

Cereal Food Processors


Roger Fray

West Central Cooperative


Pete Goetzmann

ADM Grain Company


Barbara Haertling

BNSF Railway


Paul Hammes

Union Pacific


J.L. (Joey) Meibergen III

W.B. Johnston Grain Co.


Tom Meyer

Kansas Grain Inspection Service


Ryan Pellett

JD Heiskell 





Bob Petersen


Director of Member Services 

Erica Venancio


Director of Communications

Abigail Hiles



Contact Info


TEGMA Office

P.O. Box 26426

Kansas City, MO 64196


Tel: (816) 569-4020

Fax: (816) 221-8189


Issue: Q3
October 18, 2012
Successful 2012 Fall Transportation Symposium
TEGMA's Annual Fall Transportation Symposium, Fall2012Logoheld at the beautiful Four Seasons at Los Colinas in Dallas, Texas, September 13 & 14, became one of the most highly attended Fall Symposiums in recent history. With over 100 members and guests from the National Grain Car Council, TEGMA was pleased with the turnout and with the continued positive relationship with the National Grain Car Council. 

The NGCC opened the meeting with their Council session, attracting many TEGMA members as well. Thursday evening, TEGMA and the NGCC hosted a joint reception where members from both organizations mingled and networked. TEGMA then kicked off its general session to end the meeting with four speakers and a panel discussion concerning crop and harvest conditions on Friday morning.
Symposium Speakers Sound Off

TEGMA offered a full program Friday morning, September 14, including four industry speakers and our ever popular industry panel. 


Chris Standlee, Executive Vice President, Abengoa Bioenergy, was the Symposium's first speaker of the day. Standlee offered a description of Abengoa as a whole and their commitment to sustainability as a main priority of the company. Abengoa is composed of three areas dedicated to renewable fuels: engineering and construction, concession-type infrastructures, and industrial production of biofuels. Standlee then discussed Abengoa's commitment to cellulosic ethanol as the next generation of the renewable fuel era. In 2011, Abengoa began production of a cellulosic ethanol plant in Hugoton, KS, which hopes to be completed by 2013 and not only be a boost to the local economy but a major producer of celluosic ethanol for Abengoa. Standlee firmly believes it is the future of the ethanol industry.


John Lanigan, Executive Vice President and Chief Marketing Officer, BNSF Railway, spoke candidly to meeting attendees during his Friday morning presentation. Lanigan gave an update on how things are progressing within the BNSF for agriculture and how that movement relates to the crude and sand markets. Lanigan commented positively on the fact that there have been no transportation issues since the flooding of last year. In fact, the BNSF has seen a growth in domestic intermodal shipments, which Lanigan credits to the lack of qualified long haul truck drivers. Lanigan also discussed falling coal prices and the outlook that they are not likely to come back any time soon. 


Dr. Bernard Weinstein, Associate Director of the Maguire Institute, Southern Methodist University, offered a non-industry perspective about a topic on every American's mind: the economy.  Dr. Weinstein's light hearted approach to the nation's most serious concern covered all facets of the now rebounding economy: unemployment, personal consumption spending, retail sales, and payroll increases. Dr. Weinstein also discussed the increase in home sales. After a steady decline in new home sales over the past 6 years, 2012 home sales seem to be trending up, probably due to home pricing finally stabilizing. After speaking in broad strokes, Dr. Weinstein then turned to grain, and the uncommonly high prices for soybeans and corn now in the marketplace. Dr. Weinstein then begged the question: "Where do we go from here?" With more and more graduates entering the workforce with high debt and no jobs, the outlook isn't necessarily positive, and Weinstein believes it is an uphill battle.


Roger Wynkoop, President, Trinity Industries, closed out our morning speaker block with an outlook on rail and barge transportation for the coming year. Trinity Rail is a multifaceted business offering railcar manufacturing, railcar leasing, and railcar services, all under the Trinity umbrella. Wynkoop then broke down the current outlook for the different car markets. Inquiries are slowing, as the industry absorbs major new builds of tank cars for crude oil and covered hoppers for oil/gas hydraulic manufacturing. Unfortunately, due to slowed production, cars used for grain are now off the radar for manufacturing and leasing companies such as Trinity. Focus has now shifted to petroleum products, and it doesn't look to change any time soon. 

Panel Discussion - Harvest Conditions 2012

A distinguished panel provided exclusive information regarding current activities in their geographic area.  The discussion led by Bob Petersen included:

    Will Bramblett, The Scoular Company
    Roger Fray, West Central Cooperative
    Greg Konsor, Gavilon Grain
    Billy Shortal, Central States Enterprises

This year's grain production was a concern to most TEGMA attendees coming off the record drought in summer 2012. Although, the drought didn't affect all corn crops, panelist Greg Konsor informed attendees. With rain in the north, corn production has quadrupled in states like North Dakota. However, the question is when will the farmer want to sell such a desired crop. Panelist Will Bramblett predicted that feeding wheat to production animals will happen due to the loss in corn production in the Midwest. However, aflatoxin seemed to be on the mind of each panelist, with the entire group describing how their areas are now affected by the high levels found in recent harvests. Barges are now requiring testing before acceptance and the USDA is now accepting aflatoxin ridden corn to be blended for animal feed.

CME to acquire Kansas City Board of Trade


CME Group and the Kansas City Board of Trade (KCBT) have reported definitive terms in which CME Group will acquire KCBT for $126 million in cash.


CME is the largest derivatives exchange in the world, with an important portfolio of agricultural futures and options, including futures and options in soft red winter wheat, and KCBT is the leading futures market for hard red winter wheat, which is bread wheat.

The agreement calls for CME Group to name a committee of KCBT market participants to advise on hard red winter wheat contract conditions and terms for at least three years and to operate the historic KCBT trading floor for at least six months, according to the announcement, which was made Oct. 17.


The KCBT board of directors unanimously approved the sale of the exchange, which requires approval by KCBT shareholders and regulatory review. The acquisition is expected to be completed by the end of this year, the announcement said.


KCBT, founded in 1856, is located in Kansas City, Mo.


CME Group, headquartered in Chicago, Ill., operates the CBOT, Chicago Mercantile Exchange and New York Mercantile Exchange. It provides trading opportunities for all major asset classes, including agricultural commodities, energy, metals, real estate, weather and a number of financial instruments. In agriculture, it trades corn, soybeans, wheat, cattle, hogs and soft commodities such as cocoa.


Source: Rod Smith, Feedstuffs

Gavilon Breaks Ground on New Headquarters

Opus Development Corporation and The Gavilon Group, LLC announced Sept. 28 the groundbreaking of a new 127,000-square-foot world headquarters office in downtown Omaha, Neb.


Gavilon "We are extremely pleased to deliver a build-to-suit facility that will enable Gavilon to continue increasing their efficiency and effectiveness in the global commodity markets," said Marshall Burton, senior vice president and general manager of Opus Development Corporation.


"The Opus organization has a nearly 30-year history in Omaha and we're inspired to work on another facility that contributes to the vibrant business community in this city."


The Class A office building will accommodate Gavilon's Omaha-based employees and support the company's future growth.


To read more, CLICK HERE.

US FDA Approves Relaxed Aflatoxin Handling Rules
The U.S. Food and Drug Administration has approved a request from Indiana to let grain handlers in the No. 5 corn state blend corn contaminated with aflatoxin, a naturally occurring toxic substance, with other grain to make animal feed.

The Indiana State Department of Agriculture announced the approval on Thursday, saying the move would give farmers more flexibility in feeding livestock at a time of limited feed supplies.

Iowa, Illinois and Nebraska, the top three U.S. corn states, have already received similar authority from the FDA to blend off corn with aflatoxin.

To read more, CLICK HERE.
Union Pacific Advances Trackwork in Two States, Appoints New Head of National Customer Center
Union Pacific Railroad announced it's spending about $19 million to upgrade track in Kansas and Wyoming.

UP logo To be completed by year's end, a $10 million project calls for improving a 134 mile stretch between Rawlins and Green River, Wyo. The work involves replacing more than 75,000 ties and about two miles of rail in curves, spreading 34,600 tons of ballast and renewing surfaces at 11 grade crossings. 

To be completed by mid-December, a more than $9 million project targets work on a line between Menoken and Junction City, Kan. Crews will replace 68,000 ties, spread 29,600 tons of ballast and renew surfaces at 114 crossings. 

Both projects are part of UP's $3.6 billion capital spending budget for 2012.

Meanwhile, UP also announced it named Jason Hess vice president-national customer service center to succeed Beth Whited, who was promoted to VP and general manager of chemicals.

Most recently assistant VP of agricultural products, Hess has held various positions during his 18-year UP career.

Source: Progressive Railroading
TEGMA would like to thank the following sponsors for their generosity and support of the TEGMA 2012 Fall Transportation Symposium:

BNSF logo   NIK   LD

UP logo    

We may have just left Texas, but don't forget to mark your calendars for the 2013 Annual Meeting in Scottsdale, AZ!

This year TEGMA will hold its Annual Meeting at the spectacular Montelucia Resort and Spa. For reservations, CLICK HERE, or call 1 (877) 627-3010. 

Registration information will be released soon. TEGMA looks forward to another successful meeting!