Three Midwest cooperatives, headquartered in Iowa, Nebraska, and South Dakota, announced on May 11 that they have formed a new company to improve fertilizer sourcing options for their members.
Central Valley Ag Cooperative (CVA) in O’Neill, Neb., South Dakota Wheat Growers (SDWG) in Aberdeen, S.D., and Farmers Cooperative Co. (FC) in Ames, Iowa, have formed a new company called Consolidated Sourcing Solutions (CSS) to provide a partnership in fertilizer sourcing. Doug Dersheid, CVA president and CEO, said the formation of CSS will enable the three cooperatives to better manage their fertilizer needs and maximize efficiencies.
“The immediate and long-term benefits of CSS will include logistical support and risk management, better international market intelligence, and the ability to build global sourcing relationships to better position us and our suppliers in the Midwest fertilizer market,” said Roger Koppen, FC president and CEO. “This new entity is about partnership; the partnership of these three successful companies to better serve our customers, as well as partnership with vendors that desire to position fertilizer products in the Midwest market.”
CSS is in the process of hiring its president, who will report to a board of directors comprised of one member selected from each of the three founding companies, as well as a board member or members selected at large. The board will provide strategic direction and guidance to CSS.
Chris Pearson, senior vice president of FC, told Green Markets that the partnering co-ops are still deciding on additional staff for the new venture, with an announcement expected in the near term. CSS intends to be operational in June 2010 and will operate out of a yet-to-be-announced location.
“Because each of the founding cooperatives has similar size, cultures, and service to grower fundamentals, the partnership came together to form CSS, which will add immediate value to the sourcing of fertilizer for our respective companies,” said Dale Locken, CEO of SDWG. “The combined fertilizer synergies of this partnership will be significant.”
CVA is a member-owned farmers’ cooperative with more than 40 locations in north central and northeastern Nebraska. It provides agronomy, energy, feed and grain products, and services to some 10,000 producers in the area. CVA was formed in September 2003 and has more than 360 full-time employees.
CVA’s agronomy services, which include fertilizer, chemicals, seed, custom application, precision technology, and scouting, are provided out of 28 locations, with annual sales of $165 million. For the 2009 growing season, CVA said it custom-applied some 1.6 million acres, sold 300,000 tons of fertilizer, and invoiced more than $22 million in seed and $31 million in crop protection products and services.
DWG is a farmer-owned grain and agronomy cooperative in the heart of the James River Valley of South and North Dakotas. The co-op has more than 5,000 producer members in an area of the Dakotas stretching from Interstate 94 down to Interstate 90, and from the Missouri River to Interstate 29.
Operating out of nearly 40 locations, SDWG offers a range of agronomy services out of roughly half of those sites, including precision agronomy, variable rate technology, crop scouting, custom and double-shot applications, bulk fertilizer delivery, and strip-till services. The co-op’s slate of fertilizer products includes anhydrous ammonia, liquid and dry fertilizers, and micro nutrients, and its crop protection offerings cover fumigants, herbicides, insecticides, and seed inoculants.
FC is the largest farmer-owned local agriculture cooperative in Iowa, serving more than 5,200 members in a trade territory of roughly 3 million acres. With an employee count in excess of 450, FC operates out of more than 50 locations in Iowa and is structured into four main departments – agronomy, feed, grain, and seed. FC’s Agronomy Department operates out of some 39 locations across central Iowa with more than 40 field sales agronomists, and is one of the largest agronomy divisions in the state.
Pearson told Green Markets that CSS will “provide a unique set of opportunities” to “aggressive vendors that want to position product in this market.” He highlighted as well that CSS will be looking globally for these fertilizer vendors. “We’re certainly willing to do that if that’s where the market goes,” he said.