State agriculture authorities shut down a Pine Bluff rice mill over the weekend because of a grain shortage and a complaint over nonpayment but allowed it to reopen Tuesday after a financial deal was worked out between the company and a customer.
An auditor with the state Plant Board, a division of the state Department of Agriculture, posted the "cease and desist" notice Friday on the property of Southwind Milling Co., which opened last year in the Port of Pine Bluff's industrial district on the Arkansas River. The notice said the company had violated the Arkansas Public Grain Warehouse Law "for having a rice shortage" -- or lacking the rice to cover a pending contract.
"The mill is having financial difficulties, and we are guiding operations until the mill is back on solid ground," Adriane Barnes, a spokesman for the Agriculture Department, said early Tuesday morning. "There are rumors floating around about farmers being owed money, but we cannot provide any [details] of that right now."
By about noon Tuesday, Barnes said, the cease-and-desist order had been lifted.
"They [Southwind] visited with the warehouse they were obligated to and reached an agreement." She said the Plant Board will visit the mill again next week. No other actions are pending, she said.
The situation brought to mind the failure two years ago of Turner Merchandising Inc. in Brinkley, which was shut down in August 2014 when inspectors with the U.S. Department of Agriculture found no grain in storage bins that were certified as being full.
Turner Merchandising filed for bankruptcy two months later, listing liabilities of $24.8 million and assets of $13.8 million. Along with the federal bankruptcy proceedings for Turner and the personal bankruptcy of one of its top officials, civil lawsuits have been filed in two state courts.
No criminal charges have been filed, and no law enforcement agency has confirmed any ongoing investigation of Turner Grain.
The collapse of Turner Grain resulted in the Plant Board being given authority it's never had over grain dealers and merchandisers that, before Act 601 of 2015, didn't have to be registered with or licensed by the state.
Grain warehouses and mills, such as Southwind, have been required to be registered and licensed for decades. Southwind is properly registered, according to Plant Board records.
"While the link between the Turner legislation and Southwind isn't concrete, I wouldn't doubt that the Turner problem has made state officials have a better focus and a quicker reaction to any problem that appears to arise with any grain dealer, merchandiser or warehouser," Ben Noble, a rice industry consultant, said.
Emil Scheiderer, who was identified in the Plant Board's letter as the mill's operator, said Tuesday that Southwind's problem isn't comparable to Turner's.
"No, sir," he said. "This is not anything like that."
At Southwind, he said, "there are a couple of farmers who have not been paid, or been fully paid, for grain under the terms of their contracts, but they are working through that situation." He declined to say how many farmers are involved or how much money is at stake.
Scheiderer stepped down a week ago from his position as a grain merchandiser at Southwind "because of a better opportunity" and said the move was unrelated to the troubles that surfaced over the weekend.
On Tuesday morning, before the state lifted its order, Scheiderer said Southwind would get the problem straightened out soon. "That company has the fiscal assets and accounts receivable coming in," he said. "They'll come to an agreement and reopen."
Plant Board auditor Mike Churchwell ordered the mill to not take or move any grain, though a handwritten note at the bottom of the letter listed two exceptions: It could receive deliveries from Riceland Foods in Dumas and from a warehouse in Dumas operated by Bruce Oakley Inc., a commodities trader and distributor based in North Little Rock.
Barnes, the Agriculture Department spokesman, said those exceptions were made because the grain involved had already been paid for.
Southwind is owned by Optimum Agriculture of Miami. Its website said it manages 22,400 acres of farmland at six sites in Arkansas and Mississippi. The company said it was formed in 2010 by "multi-generational farming families in Latin America." Telephone calls to Southwind's planning director at the mill's office on McEntire Road in Pine Bluff were not returned.
When it first announced its plans to go to the Pine Bluff port, Southwind said it would invest some $25 million in its Pine Bluff operations and hire up to 40 people. It also was to receive a variety of local and state tax breaks and loans.
A Section on 09/07/2016