Nebraska Grain Company Investigated

LINCOLN, Neb. (DTN) -- Roberts Seed Inc. in Axtell, Nebraska, has been ordered to cease all operations as a grain dealer and warehouse, after the Nebraska Public Service Commission announced on Thursday that it has opened an investigation into the company in south-central Nebraska.

The PSC said in a news release that it recently received information that the company had purchased grain from a farmer, although Roberts Seed is not currently licensed as a dealer or warehouse.

"An Oct. 20 inspection by the PSC grain department found that the company is purchasing various amounts of commodities from Nebraska producers and is also storing commodities at its facility in Axtell without proper license," the PSC said on Thursday.

When asked how a company like Roberts Seed can operate for years without a grain dealer or warehouse license, the Nebraska PSC responded in a statement.

"The PSC grain department inspects licensed grain dealers and warehouses on an annual basis," a spokesman for the PSC said. "Roberts Seed has not obtained a grain dealer or grain warehouse license. Until recently, the PSC has received no complaints related to Roberts Seed since 2018 and has had no reason to suspect the company was operating in violation of statute. Companies such as Roberts Seed can operate in a capacity that does not require a license, such as washing and cleaning commodities or buying and selling commodities for seed. It is when companies operate in a capacity where they buy, sell and store the commodities representing the producer/seller that they are required to be licensed as grain dealers and/or grain warehouses."

The PSC is investigating Roberts Seed Inc. for performing actions as a grain dealer in the state of Nebraska without a valid grain dealer license issued by the commission.

That is a violation of Nebraska Revised Statue 75-903 and 291 Nebraska Administrative Code 8-003.01. The PSC said the company also is in violation of Nebraska Revised Statute 88-527 and 291 Nebraska Administrative Code 08-002.01 in not having a warehouse license.

In 2018, Roberts Seed was fined by the commission and was prohibited from engaging in grain dealer activities without obtaining a grain dealer license.

According to records from the PSC, Roberts Seed applied for a grain dealer license on April 21, 2017, but "failed to submit" a required surety bond, a contract with the required warning-to-seller language, along with year-end financial statements independently reviewed by a certified public accountant.

The commission said the application was left pending for a whole year, as Roberts Seed did not respond to PSC staff seeking more information on the application.

Then, on May 15, 2018, the commission made a finding that it should issue a cease-and-desist order.

In a Nov. 19, 2018, order, the commission said it found Roberts Seed did business without a license 25 separate times, warranting a $10,000 penalty.

The company was then allowed to make monthly payments for six months, at $1,667 a month.

Roberts Seed notified the PSC on May 4, 2018, that it was unable to meet the financial requirements for a grain dealer license and was in the process of Chapter 11 bankruptcy. According to a search of court records by DTN, however, there were no bankruptcy filings by Roberts Seed or its owners, Joe and Leisha Roberts, in all of 2016, 2017 and 2018.

The company touts itself as a "leader" in processing, packaging and shipping organic grain.

The company did not respond to DTN's request for comment.

The PSC said in a news release that it will be filing a formal complaint against Roberts Seed. Once the company receives the complaint, it will be required to show why civil penalties should not be assessed for operating as both a grain dealer and a grain warehouse without proper license.

"It is imperative that our producers/sellers who are in the thick of harvest season are aware that this company does not hold a license to conduct grain dealer or grain warehouse activity in the state of Nebraska," PSC Chairman Tim Schram said on Thursday.

Commission Vice-Chairman Kevin Stocker said, "This company's apparent blatant disregard for state law leaves us with no option but to order them to immediately cease and desist all activity."

Todd Neeley can be reached at todd.neeley@dtn.com

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