In a bid to serve the local agricultural community,
The Andersons, Inc.
) has opened its grain elevator near the towns of Anselmo and
Broken Bow in Custer County. The elevator with both train and truck
loading capabilities has a capacity of 3.8 bushels.
The newly constructed elevator is the first-of-its-kind in Nebraska
and also the largest elevator in Custer County. It will benefit the
farmers of Custer County by increasing the efficiency as well as
speed of grain export.
The Andersons planned to begin the construction of the grain
elevator in Nebraska in October 2011. The company has opened the
new elevator now for the 2012 harvest.
The decision to construct the grain elevator in Nebraska goes well
with The Andersons' strategy to serve the western regions of its
traditional eastern market. Accordingly, the company has expanded
its operations in Nebraska to nine more locations, either through
acquisitions or merchandising agreements.
The new elevator will benefit The Andersons by fortifying its
position in Nebraska. Moreover, with this new addition, the
company's capacity has now been increased to 113 million bushels in
the regions of Indiana, Michigan, Ohio and Nebraska.
The Andersons generates the majority of its revenues from the Grain
and Ethanol Group. The group accounted for nearly 67.4% of its
total revenues during the second quarter of 2012. Therefore, the
company remains committed to upgrading the business and
strengthening its market position in the face of growing
However, the prevailing drought conditions in the U.S. may
negatively affect the performance of the segment. Moreover, it is
expected that wheat production will drop year over year in the
second half of 2012. Therefore, lower wheat storage is likely to be
headwinds for grain margins.
The Andersons retains a short-term Zacks #4 Rank (Sell). We have a
long-term Neutral recommendation on the stock.
ANDERSONS INC (ANDE): Free Stock Analysis
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