A joint venture called TEMCO between Cargill and CHS will add a terminal in Houston, creating a new exit ramp for its heartland-grown grain headed to global markets through the Gulf of Mexico.
Previously, TEMCO held three terminal facilities, all in the Pacific Northwest. The two Minnesota agribusiness companies announced Friday that bringing a Houston grain terminal, currently owned solely by Cargill, under TEMCO enables the venture to grow collaboratively.
"Export facilities are extremely expensive to buy or build, they're expensive to operate, and it's critical that you're efficient in doing that to bring the most value back to our farmer products and global customers," John Griffith, a senior vice president with CHS, told the Star Tribune.
The move comes after a year of dramatic and even unprecedented uncertainty — at least in the modern era — for CHS and Cargill. CHS is the nation's largest farmer cooperative, and Cargill is the biggest shipper of grain in the world.
The year began with Russia's invasion of Ukraine, which stranded ocean vessels carrying grain on the Black Sea in ports, as land mines filled coastal waters. The year ended with domestic distress, as low waters on the Mississippi River, particularly south of St. Louis, led to gnarled traffic, with grain-ferrying barges at a standstill.
Company representatives in an interview on Thursday did not attribute any one market motive to the decision to expand TEMCO but noted that the additional port should allow the venture greater flexibility in meeting customers' demands.
"The agribusiness [companies] are working incredibly hard to have a resilient system," said Sheryl Wallace, Cargill's president of North American Grain.
Prior to Friday's announcement, a spokesman for CHS noted that TEMCO, a 24-year-old venture between the two agribusiness giants, now ships grain to Asian markets — including China, Japan and South Korea — out of the Pacific Northwest, with ports in Portland and Kalama and Tacoma, Wash.
Port Houston is the seventh-largest container port in the nation, while the adjacent Houston Ship Channel Complex is the top-ranked U.S. port, notching 193.8 million short tons in 2021.
In November, Cargill announced a 23% jump in revenue to $165 billion in the fiscal year ending in May. CHS saw a year-over-year increase of 24%, with revenue rising to $47.8 billion.
