South Dakota Wheat Growers, Aberdeen, S.D., announced on Jan. 2 that it has purchased a 40,000 st dry fertilizer plant in Kimball, S.D., that was previously owned by Gavilon Fertilizer LLC. The Kimball plant includes access to a 110-car unit loop-track, plus high-speed automated fertilizer loadout and storage capabilities.
The Kimball acquisition comes just one month before Wheat Growers joins forces with North Central Farmers Elevator (NCFE) in Ipswich, S.D., to form Agtegra Cooperative. Gavilon Grain LLC, which is based in Omaha, Neb., will continue to own and operate the adjacent 2.2-million-bushel grain elevator in Kimball.
“The Kimball fertilizer plant has three times the storage capacity as our newest plant in Kennebec,” said John Husk, Wheat Growers chief operating officer. “With this added storage volume and efficient loading capabilities, we can provide our customers seamless delivery of cost-effective product for their operations.”
Husk said growing fertilizer demand along the I-90 corridor has forced Wheat Growers to truck in large volumes of fertilizer from other locations farther away. “Those are clear indications that another modernized plant has great potential in this region,” he said. “This new Kimball plant will be a significant addition to how we serve our customers’ fertilizer supply needs.”
The Kimball plant is Wheat Growers’ largest dry fertilizer plant. The co-op currently has six hub fertilizer plants located in Bath, Huron, Kennebec, McLaughlin, Wolsey, and Oakes. Prior to the Kimball acquisition, the Wolsey warehouse was Wheat Growers’ largest at 31,200 st of dry fertilizer storage capacity.
“Today we add a key asset to our farmer-owned cooperative that will allow us to continue to deliver on our mission to better serve our member-owners for generations to come,” said Wheat Growers CEO Chris Pearson. “As we anticipate becoming a new cooperative on Feb. 1, the addition of this state-of-the-art fertilizer plant allows us to very efficiently provide fertilizer to our farmers. It also opens the door to new opportunities in our South Region by significantly increasing our storage capacity and expanding product availability to producers along the I-90 corridor. This will be key for our producers in that region.”
Wheat Growers and NCFE announced on Jan. 3 that they had settled on Agtegra Cooperative as the name of their combined company. Members of both co-ops approved the merger in a September vote (GM Sept. 29, 2017), just two months after the boards of directors announced that they were considering unification. The two co-ops first attempted a merger in 2015 (GM March 9, 2015), but that proposal was rejected by NCFE members (GM June 22, 2015).
The boards claimed last summer that the decision to pursue a merger again was driven by a number of “market changes and pressures,” including lower commodity prices, a downturn in the agriculture economy, and a drought that is impacting the trade areas of both co-ops (GM Aug. 11, 2017.
Agtegra Cooperative will be headquartered in Aberdeen, with some 900 employees in North and South Dakota serving more than 60 communities and approximately 7,850 member-owners and 22,600 equity holders. In addition to offering grain and agronomy services, the co-op will offer its members aerial application services, fuel, animal feed, and precision ag hardware and software products and services.
Pearson will become CEO of Agtegra on Feb. 1, with Husk serving as COO. Other members of the co-op’s leadership team will include Mike Nickolas, executive vice president and COO, Grain Division; Tracy Linbo, senior vice president of Agronomy, Communications & Marketing; Blake Bomesberger, Chief Financial Officer; Joe Zikmund, senior vice president, Finance; and Judy Stulken, senior vice president, Organizational and Member Development.
“Merging two strong cooperatives into one gives us the ability to expand the services and capabilities we offer our member-owners,” Pearson said. “Our purchase of the Kimball fertilizer plant from Gavilon announced yesterday, and our plans to expand the North Central aerial application service across our entire trade area, are two great examples of the high-quality products, services, and efficiencies that we can provide our members from this new cooperative.”