CHS Inc. and Hamilton Farm Bureau (HFB), a cooperative headquartered in Hamilton, Mich., have signed a letter of understanding to explore a formal business partnership. If approved, the two companies will join forces to enhance agricultural services to producers and consumers within the western Michigan trade territory now served by HFB.
A proposed business agreement is currently being discussed at HFB member meetings and will be voted on by its 170 Class A stockholders in April. Bob Fenton, HFB president and CEO, told Green Markets the results of that vote will be in by 5 p.m. EST on April 29.
Fenton said all the feedback he’s received so far from shareholders regarding the merger is favorable. “Combining our resources with those of CHS offers Michigan farmers all the purchasing and marketing advantages of a global company,” he said. “Our farmers will become owners of one of the most successful agribusinesses in North America. It will be exciting to see the CHS profits generated in Michigan returned to Michigan farmers to enhance their farm operations.”
Fenton noted that although CHS is “very prominent” west of the Mississippi, the proposed merger with HFB would mark the first time CHS has an established retail presence east of the Mississippi.
“The business opportunity is a strategic move for both companies,” said John McEnroe, senior vice president, CHS Country Operations division. “And it aligns well with the CHS commitment to return value to member-owners.”
With $140 million in annual sales and 127 employees, HFB has been in business for some 80 years providing products and services to agricultural producers, consumers, and builders in Michigan. HFB operates agronomy facilities in Traverse City and Hamilton, Mich., providing seed, custom fertility, crop protection, and application services to growers in western Michigan. HFB’s farmer customers include growers of crops ranging from cherries and blueberries to corn and wheat. The cooperative currently offers brands such as Pioneer, DeKalb, Novarties, Sygenta, and Croplan Genetics.
HFB also operates an energy division with locations at Traverse City and Hamilton; a commercial egg production business headquartered in Hamilton; and a lumber products business with locations at Hamilton, Zeeland, Holland, and Comstock Park, Mich.
Fenton told Green Markets that the HFB name and logo will continue in western Michigan if the merger with CHS is approved. “CHS is very big on keeping local brands in place,” he said, noting that the current product offerings at HFB locations will “if anything be enhanced” by the merger.
The HFB announcement is the latest from CHS involving recent new ventures. Earlier this month, the company reported that it plans to build a large grain loading elevator in North Dakota in partnership with Farmers Union Elevator Co. in New Salem, N.D. It also has expansion plans to accommodate 110-car trains at its Lakota facility in North Dakota, which operates under Lake Region Grain.
CHS also recently announced that it is investing $26 million in enhancements to strengthen its refined fuels supply infrastructure in the Northern Plains region. These enhancements will include storage capacity expansions and loading system upgrades at its terminals over the next three years.
Earlier this year, CHS reported that Farmers Elevator-Eastern Montana Operations, a division of CHS, will build a new hub fertilizer plant east of Wolf Point, Mont., with groundbreaking planned for early Spring 2011 and construction expected to last 10 months (GM Jan. 31, 2010). The company also reported recently that its division operating as Bingham Cooperative has reached an agreement with Land View Inc. to acquire its retail agronomy operations in American Falls, Idaho (GM Jan. 17, 2010).
CHS is a diversified energy, grains, and foods company head
