ADM sues Shepherd's Grain for contract cancellation

REARDAN – A dispute between a local grain cooperative and a national grain miller is under litigation in U.S. District Court, with the grain miller claiming the cooperative wrongfully terminated a contract between the two.

Archer Daniels Midland, also known as ADM, claims that the grain cooperative Columbia Plateau Producers wrongfully cancelled a processing contract on claims the miller failed to deliver services as promised. ADM has milling locations in Spokane and Cheney. ADM claims that after a 14 year contract, Columbia Plateau, that markets under the name Shepherd’s Grain, cancelled the contract in order to work with a competitor, Grain Craft Inc.

“Shepherd’s Grain’s decision and communications with ADM customers comes at precisely the time of year most likely to disrupt ADM’s customer relationships and maximize the possibility of diverting ADM customers to Grain Craft,” the lawsuit filed on Sept. 23 and shared with The Times by th ecapital Press claims.

The Shepherd’s Grain cooperative specializes in “no till, direct seed farming” and the methods allow for “better soil which makes richer grain, which produces flour that bakes better and tastes better”, according to the cooperative’s website.

ADM notes that they began working with Shepherd’s Grain long before sustainable wheat products became popular with consumers and that ADM has helped the grain cooperative grow their business by up to 20 percent, as well as expanding from six to forty farmers.

While the entities had a contract that was set to run through 2022, ADM notes that Shepherd’s Grain, but the grain cooperative cancelled the contract in August, claiming a breach of contract.

“Shepherd’s Grain claimed ADM was unable to support increased production of Shepherd’s Grain production. This is untrue,” ADM said in the suit. “The elimination of Shepherd’s Grain wheat, without an immediate substitute, may lead to job reductions in Spokane and Cheney of ADM mill employees.”

In response to the cancellation announcement from Shepherd’s Grain, ADM asked U.S. District Court judge Thomas Rice to stop the cancellation so the matter could be litigated.

However, Shepherd’s Grain said ADM failed to be equipped to produce the cooperative’s pizza flour, made labeling errors in product and delayed distributor contracts. At the Spokane plant, the cooperative noted the location was only at 90 percent capacity for packaging the coop’s 5 pound bags of flour and will top out capacity by the end of the year.

“With no plan presented by ADM to accommodate Columbia Plateau’s product growth in the market areas for this size bag of flour, the company had no capacity to increase production,” Columbia Plateau’s response noted.

U.S. District judge Thomas Rice sided with Shepherd’s Grain and denied ADM’s request to stop the contract cancellation, finding that ADM was not intitled to the extraordinary relief they requested.

Both the lawyers for ADM and Shepherd’s Grain declined to comment on the case.