Some big changes may be happening in the near future for long-time area business Farmers Coop Elevator. Finding itself in between general managers, the board of directors announced in May that it would begin investigating the option of a possible merger with a neighboring cooperative. Six cooperatives were looked at and met with.
This past summer, after two joint meetings between the seven member Farmers Coop Elevator board and the 10 member Farmers Win Cooperative board, the decision to proceed with the preliminary steps of a merger was made. A letter detailing the potential merger was mailed to members August 17.
Last month, a feasibility study, facilitated by Iowa Institute for Cooperatives, began reviewing both companies to determine whether or not a merger would be beneficial. It’s expected to be complete later this month.
“Providing the study looks like we’ll want to go forward, and I think it will, we’ll begin holding customer meetings in the trade territories of Rushford, Houston, Caledonia, and Spring Grove,” said Trent Sprecker, General Manager for Farmers Win Coop.
The cooperative is eyeing a four part approach through the study; improving operating efficiencies, extending product service options and risk management tools for members, improving access to capital for future investments, and providing opportunities for growth and advancement of employees.
Headquartered in Fredericksburg, Iowa, the cooperative serves 14 locations in northeast Iowa and southeast Minnesota through grain, agronomy, feed, and fuel/propane divisions. Likewise, Farmers Coop Elevator offers member services in agronomy, feed, and grain.
The 96-year-old Farmers Coop Elevator is no stranger to mergers and expansion, having grown to its current operation through a number of periods during its history. The company had its roots as the Rushford Elevator Company, which began in 1903, prior to reorganization as a cooperative in 1921. Sixty years later, the cooperative kicked off a 20-year period of acquisition and growth leading to the addition of Lundberg Feed and Grain in Houston in 1981, Tri-County Elevator in Rushford in 1984, Houston-Money Creek Cooperative in 1999, Spring Grove in 2001, and Caledonia in 2003.
“We are optimistic that the merger study shows that by combining the two companies it enhances the ability to gain buying power and increase efficiencies to benefit our member/customers,” said Brad Darling, Board President for Farmers Win Cooperative. “The chance to grow and continue to improve the feed, agronomy, grain and energy departments of the combined coop is an exciting opportunity.”
“This is a good opportunity for both cooperatives,” added Sprecker. “We bring a strong agronomy side. We’re strong on that. They have a strong feed department. This would combine forces.”
“This merger study makes a lot of sense for our memberships. We share many things with Farmers Win Cooperative already — members, geography, and transportation paths,” said Steve Oian, Board President for Farmers Coop Elevator. “What is more exciting is the shared dedication to service, employee development, and cooperative growth each of our boards prioritize. This merger has the potential to set our memberships up for long term, sustainable success.”
Should the cooperatives get favorable news from the feasibility study, member meetings would begin in November. A vote would happen in December if all looks good. Because of the structure of the merger, while Farmers Coop Elevator needs a quorum of members and a 2/3 majority of votes to pass the merger, Farmers Win Cooperative needs only a majority vote from its board of directors. If the vote passes, the cooperatives would officially merge February 1, 2018.