Iowa farmers caught in Benson Hill bankruptcy can get help through grain indemnity fund
Donnelle Eller- Following Benson Hill's bankruptcy filing, the Iowa Department of Agriculture is urging farmers who might have experienced losses to file claims for reimbursement.
- The ag tech and seed company, which filed for Chapter 11 bankruptcy on March 20, had a state grain dealer license.
- Farmers have 120 days to file a claim with the Iowa Grain Depositors and Sellers Indemnity Fund, which can cover up to 90% of losses, with a maximum of $300,000 per claim.
As St. Louis-based Benson Hill files for bankruptcy, the Iowa Department of Agriculture is encouraging Iowa farmers who experience losses tied to the ag tech and seed company, which holds a state grain dealer license, to file claims for reimbursement through a state indemnity fund.
The Iowa Department of Agriculture on Wednesday notified farmers that the company had filed for Chapter 11 bankruptcy March 20 in Delaware. They may have 120 days to file a claim to help cover any losses.
The company, which plans to sell its assets, said it had received court approval to obtain up to $11 million in financing to continue operations during the bankruptcy. Altogether, nine Benson Hill companies filed for bankruptcy protection this month, reporting $100 million to $500 million in both assets and liabilities.
Benson Hill said Wednesday it has a seed field services operation in Bondurant that employs seven people. The company said it continues to operate and "all existing contracts and service agreements remain in place."
Benson Hill sold a soybean processing plant in Creston in southwest Iowa about a year ago to Omaha, Nebraska-based White River Soy Processing for $72 million. The company said it was continuing its plan to transition to an “asset-light business model backed by world-class soybean germplasm and competitively advantaged technology.”
White River Soy Processing also purchased a Benson Hill soybean crush facility in Seymour, Indiana, in 2023 for $36 million.
The Iowa ag department said farmers who have not been paid for grain sold to a Benson Hill operation before March 20 may file a claim with the Iowa Grain Depositors and Sellers Indemnity Fund. Created by the Iowa Legislature in 1986 during the Farm Crisis to provide financial protection to farmers, the fund will pay 90% of a loss on grain up to a maximum of $300,000 per claim.
Last year, the department notified Iowa farmers that they would need to continue paying a quarter of a penny on each bushel of grain sold to help replenish the fund, which protects them when elevators and other grain buyers file for bankruptcy. Filings in 2021 and 2022 by Pipeline Foods LLC of Fridley, Minnesota, Global Processing Inc. of Kanawha and B&B Farm Store of Jesup had dropped the fund's balance to about $312,000. The fee kicks in when the fund falls below a $3 million minimum.
If farmers have questions, they may contact the Iowa Department of Agriculture Grain Warehouse Bureau at 515-281-5987. For more information on Benson Hill's bankruptcy, go to cases.stretto.com/bensonhill.
This story has been updated to add new information.
Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com.