COFCO-Growmark Deal Grain Terminals

OMAHA (DTN) -- China's largest state-owned food processor and grain dealer has reached a deal to take full ownership of a transloading grain facility on the Mississippi River across from St. Louis, Missouri.

COFCO International Ltd. and Illinois-based Growmark Inc. announced the deal on Thursday in which Growmark will sell its minority stake to COFCO in a grain-loading facility in Cahokia, Illinois. The facility has access to all seven Class I railroads and can accept four unit trains at a time. It is considered a "high-speed rail and truck-to-barge facility," the companies stated.

COFCO is shorthand for the China Oil and FoodStuffs Corp., a Chinese state-owned entity and one of the largest food-processing companies in the world.

"We plan to continue investing in our U.S. business, and we intend to pursue additional opportunities focused on supporting our U.S. Gulf and Pacific Northwest export strategy," said Zhijun (Jerry) Shi, chief operating officer G&O for COFCO International in North America.

In return, Growmark will purchase COFCO's ownership in the Chicago grain warehouse facility known as the "B-House." The B-House is located on the Calumet River near downtown Chicago. "This facility has a capacity of 11.5 million bushels, provides unparalleled flexibility to move grain through rail, truck, barge, and laker vessels, and facilitates imports and exports via the Great Lakes," the companies stated.

"Growmark is a farmer-owned cooperative. That means the farmers growing the grain that gets traded through B-House will now get to participate in the returns generated from this link of the supply chain. We are excited to add B-House to our portfolio of cooperatively owned grain assets." said Growmark Vice President of Grain and Strategic Relationships Matt Lurkins.

COFCO and Growmark have partnered at the Cahokia facility since 2017. At the time, the companies stated the facility could receive 180,000 bushels of corn per hour and load to river barges at the same time at a rate of 60,000 bushels an hour. The deal offered Growmark an opportunity to sell more grain into China.

Politics, however, have changed since COFCO expanded its U.S. footprint in the mid-2010s through purchases of other international grain-trading companies.

In 2023, another Chinese firm, Fufeng Group, saw its efforts to build a corn mill plant in Grand Forks, North Dakota, rejected after Air Force officials raised concerns that the facility would be within 12 miles of an Air Force base. Fifteen states last year passed bills that banned or limited people from certain countries -- mainly China, Russia, Iran and North Korea -- from buying land in their state. More bills were introduced in 2024, including at least one in Illinois, though the state legislature there did not pass it.

The U.S. House Agriculture Committee in March also held a hearing in which lawmakers highlighted the need to reduce China's agricultural footprint in the U.S. During the hearing, South Dakota Gov. Kristi Noem, a Republican, called for increasing efforts to restrict the ability of China and other foreign adversaries to buy U.S. agricultural land.

China, however, also bought $29 billion in U.S. agricultural products in 2023 and has purchased $9.8 billion in goods from Jan. 1 through April, according to the Foreign Agricultural Service.

A spokeswoman for Growmark told DTN the company is not granting any interviews or answering any statements until after the deal closes on June 27.

The sale of the Cahokia facility also will likely need approval of the Committee on Foreign Investment in the United States (CFIUS), which reviews transaction involving foreign investments. The 2024 funding bill in Congress added the USDA secretary to take part in CFIUS reviews on agricultural transactions.

Chris Clayton can be reached at chris.clayton@dtn.com

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