First Cooperative Association (FCA), Cherokee, Iowa, recently announced that it has signed a purchase agreement to acquire the seed, crop protection, and commercial fertilizer business of Farm Nutrients LLC, and its agronomy center in Rembrandt, Iowa. Farm Nutrients is owned by Rembrandt Enterprises Inc., Spirit Lake, Iowa, which will retain the chicken litter management and spreading portion of the business.
FCA will be staffing the business, and is taking over the existing seed, crop protection, and commercial fertilizer contracts and application services. It is FCA’s goal to continue to service all crop protection and commercial fertilizer acres and to continue to treat and sell seed from this location. FCA said it is excited to expand with the new up-to-date facility.
FCA provides products, services, and expertise in agronomy, energy, grain, and feed through its 20 locations throughout northwest Iowa. It is ranked 65th in the 2020 listing of CropLife’s top 100 Largest Ag Retailers in the U.S. FCA said it is the oldest continuously active cooperative elevator in the nation. It traces its history back to Farmers Cooperative Elevator of Marcus, which was first incorporated on Dec. 12, 1887. FCA was formed in 1997 when four cooperatives unified, including the Farmers Cooperative Association based in Marathon, Agland Coop at Alta, Farmers Cooperative at Aurelia, and Farmers Cooperative in Cleghorn.
Farm Nutrients was founded in 2003 by Rembrandt Enterprises, which is ranked 83rd in CropLife’s top 100 Largest Ag Retailers in the U.S. in 2020, spreading chicken litter in Iowa, Colorado, and Nebraska.
In the meantime, FCA is in the midst of a unification study with another cooperative – Alceco of Albert City, Iowa (GM Dec. 18, 2020). Alceco, which stands for Albert City Elevator Cooperative, was formed in 1905 but grew over the decades through multiple expansions and acquisitions, including a merger in 2008 with Midwest Farmers Cooperative.
Alceco partnered with Cargill in 1997 to form Ag Partners LLC, a joint venture that provides grain, agronomy, feed, and petroleum products and services from 17 retail and wholesale locations in Iowa. Ag Partners now operates as a solely-owned subsidiary of Alceco after the company announced last summer that it had acquired full ownership from Cargill (GM July 31, 2020).
“In many cases, Alceco’s strengths are FCA’s weaknesses, and vice versa,” said FCA Board President Charles Specketer in FCA’s spring newsletter. “They have rail access, which we lack and we need. They are strong in feed, which provides a viable market for local grain. In fact, Alceco is the second largest feed company in Iowa.
“FCA brings a lot to the table, too,” he added. “We have the big agronomy center in Aurelia. We’re the largest supplier of soybeans to AGP in the area. We’re also strong in the energy business.”
Specketer noted that the FCA and Alceco trade areas overlap in certain areas and that the company’s serve the same sector, including agronomy, grain, feed and energy.
FCA General Manager Merle Lyons said FCA needs more fertilizer facilities in the Laurens, Marathon, and Webb areas, as well as the northwest part of its trade territory.
“Size does matter when it comes to gaining economies of scale, spreading out fixed costs, getting volume discounts on input purchases, and being able to afford the best talent and technology,” he said, noting that recruiting talent is one of the biggest challenges facing employers in rural Iowa, with shortages at all levels, including management. As for grain storage, Lyons said FCA has to do better than meet customer needs – it has to exceed them in order to be viable in the future.
In its spring newsletter, FCA said both of the cooperatives have much to offer the other. FCA noted its own agronomy center in Aurelia, but said it needs facilities in the Laurens, Marathon, and Webb area, and in the northwest part of its trade territory.
It also noted its strength in soybean supply and energy. Alceco offers rail loading facilities, and is the second largest feed supplier in Iowa. Both of these would offer FCA customers more market options for exports and feed. FCA also noted that it wants to make sure that it has the storage available to serve customers. It also said there is a significant labor shortage, including management.