The rapid pace of consolidation continues at the regional cooperative level, with members voting recently to support two separate mergers in Iowa.
Farmers’ Cooperative Elevator Company (FCEC) of Kingsley, Iowa, voted on March 31 to merge with First Cooperative Association (FCA) of Cherokee, Iowa. The merger, which was supported by 77 percent of FCEC’s voting members, will take effect July 1 under the First Cooperative Association name.
“First Co-op is very pleased to add the members, assets, and employees of Farmers’ Co-op Kingsley into First Co-op’s overall operation and to continue the expansion and growth in the Kingsley area,” said Jim Carlson, general manager of FCA.
The combined company will have 165 employees and will operate in 21 communities in eight counties in northwestern Iowa, with projected annual sales of $400 million. Carlson will continue as general manager of the combined co-op, and two FCEC board members will join the FCA board as a result of the merger.
The voting results were announced on April 4, with both co-ops noting that the results were the culmination of “months of study and negotiation.” FCEC operates just one location at Kingsley, and all employees will be retained.
“We are very pleased with the total number of members that voted and that nearly eight out of every ten members agreed with the board’s decision to pursue unification with First Co-op,” said FCEC general manager Chris Pedersen.
FCA was formed in 1997 from the unification of four co-ops – Farmers Cooperative Assoc. in Marathon, Agland Co-op in Alta, Farmers Cooperative in Aurelia, and Farmers Cooperative in Cleghorn. The company currently operates agronomy, grain, energy, and feed divisions from 20 locations in northwestern Iowa, with 152 full-time employees and more than 40 part-time employees.
FCA’s agronomy operation offers precision ag services, corn and soybean seed, and custom application of anhydrous ammonia, liquid and dry fertilizer, ag lime, and crop protection chemicals.
In another recent merger vote, members of Farmers Cooperative Co. (FCC) in Afton, Iowa, agreed to combine with United Farmers Mercantile Cooperative (UFMC) in Red Oak, Iowa. The merger will take effect Sept. 1 under the United Farmers Cooperative name, with more than 200 employees and projected annual sales of $300 million.
Member votes were tallied on March 18, with 79 percent of voting FCC members and 85 percent of UFMC members supporting the merger. John Pruss, current general manager of UFMC, will serve as general manager of the combined company, with Jim Schendt, current general manager of FCC, serving as assistant manager. The new board of directors will be evenly represented by FCC and UFMC members.
In an earlier letter to FCC members, Schendt said the co-ops had identified $1.5 million in potential savings and/or margin enhancements that the merger would generate through better asset utilization and increased efficiencies and volumes related to agronomy, grain arbitrage, and expense cutting. Schendt assured members that the merger would not result in cuts to staff, however. “Employees from both cooperatives will be retained,” he said. “A potential unification will create more opportunities for them, as well as future employees.”
FCC operates from Iowa locations at Afton, Arispe, Creston, Diagonal, Indianola, Macksburg, Mount Ayr, Osceola, and Shenandoah, and one facility in Elwood, Kan. The company’s agronomy locations are at Afton, Macksburg, Mount Ayr, and Osceoloa, and include a new 5,200-ton dry fertilizer facility at Mt. Ayr that went into operation the second week of November 2015. FCC also sells anhydrous ammonia, UAN, liquid starters and foliar nutrient products, and a range of micronutrient and specialty fertilizers.
UFMC operates grain, agronomy, feed, energy, and retail divisions from Iowa locations at Red Oak, Villisca, Stanton, Corning, Farragut, Shenandoah, and Essex. The company’s agronomy business offers seed, fertilizer, crop protection products, custom application, and precision ag services from locations at Red Oak, Villisca, Farragut, Shenandoah, and Essex. UFMC also has convenience stores in Red Oak and Corning, a NAPA store and tire/service center in Villisca, and a full-service Country Store and lumberyard in Red Oak.