South Dakotas $12.6M rail investment

By Scout Nelson

The South Dakota Railroad Board has approved $12.6 million to support the Davison Regional Rail Authority, enabling essential rail upgrades to service the state’s largest soybean processing facility. This funding aims to enhance infrastructure for the High Plains Processing plant, a $504 million project located two miles south of Mitchell.

The soybean plant, spearheaded by South Dakota Soybean Processors, is designed to address growing demands for soybean feed for livestock and soy-based biofuels. Breaking ground a year ago, the facility is expected to process 35 million bushels of soybeans annually, yielding 570,000 tons of seed meal and 300,000 tons of oil. It will also provide employment for 85 people.

Financing for the project includes $21 million from Davison County, offered through a tax increment financing plan, which the company will repay via increased property tax revenues. Additional contributions include $6.7 million from the Governor’s Office of Economic Development.

The newly approved rail funding will finance the construction of 6.2 miles of rail line, 22 industrial turnouts, and two mainline turnouts to facilitate efficient train movement. According to project plans, the upgraded rail system will handle 147 rail cars weekly, with unit trains consisting of 100 or more cars passing through monthly. This development will significantly reduce road traffic, removing an estimated 30,000 long-haul truck trips annually. However, localized truck traffic is expected to increase as farmers deliver crops to the facility.

The funding will come from the State Rail Trust Fund, marking a historic investment for the board. While the plant itself has several private backers, the rail infrastructure lacks private funding sources, highlighting the importance of public investment in this project. The loan, approved at a 2.95% interest rate, is the largest ever issued by the fund, surpassing the previous $7 million loan granted in 2007.

The project underscores South Dakota’s commitment to modernizing agricultural infrastructure and supporting sustainable economic growth in the region. With this investment, the state aims to bolster its agricultural supply chain while reducing road congestion and enhancing efficiency.

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