SD: Local panel approves $12.4M loan application to SD Rail Board for High Plains rail work

The Davison Regional Rail Authority signed off unanimously on Tuesday for a $12.4 million loan application to the South Dakota Department of Transportation's Railroad Trust Fund.

The application allows High Plains Processing to pursue low-interest funding from the state to help pay for the company's rail infrastructure investment costs.

The South Dakota State Rail Board already awarded a $12.6 million low-interest loan in November 2024. At that time, High Plains leadership indicated they would potentially ask for another loan to cover the remaining rail costs, which are estimated at about $25 million.

The High Plains Processing facility south of Mitchell opened earlier this fall at an estimated overall cost of $500 million. The facility includes a nearly 7-mile rail loop that connects to the main BNSF rail line, and the rail loop includes 22 industrial turnouts and two mainline turnouts.

The facility, a joint venture associated with South Dakota Soybean Processors, has a capacity to handle 35 million bushels of soybeans annually, supporting 85 full-time jobs and generating $5.5 million in annual payroll.

"This project has already proven to be a tremendous win for South Dakota farmers and our regional economy," said Mike Lauritsen, secretary/treasurer of the Davison Regional Rail Authority and Mitchell Area Development Corporation CEO, in a statement. "With crop prices down across the country, this facility is providing local growers with a reliable market that pays 20 to 25 cents more per bushel than the current market rate. That makes a real difference for family farms across the region."

A press release said the rail investments allows for efficient shipment of processed soy meal and oil products, much of which is exported internationally, while keeping thousands of truckloads off regional highways each year.

"This will ease congestion, reduce wear and tear on State Highway 37 and county roads, and improve overall transportation safety for area residents and agricultural haulers alike," the press release said.

"The Rail Authority was established to invest in projects that strengthen South Dakota's economic backbone," Davison Regional Rail Authority Chairman Randy Reider said in a statement. "High Plains Processing is a perfect example of that mission in action. The rail improvements are already fueling economic activity, creating jobs, and giving local producers better access to global markets."

"Rail access has been transformative for our operations. At times, we're handling more than 300 truckloads of soybeans daily, and the rail system now allows us to move products more efficiently and competitively," said High Plains Processing and South Dakota Soybean Processors CEO Tom Kersting. "The impact for growers has been immediate: higher prices, lower transportation costs, and more stability in uncertain times."

The facility is operating at 60% capacity, Kersting said.

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