Ag Partners LLC

A hybrid helping producers prosper in the Midwest
Written by: 
Molly Shaw
Produced by: 
Elizabeth Towne

Based in Albert City, Ag Partners LLC operates 16 facilities throughout Iowa dedicated to grain, agronomy, feed and petroleum services in support of some 2,500 customers. Serving such a large customer base means continuous upgrades in facilities and equipment to keep pace with customer needs, something Ag Partners prides itself on and has been doing for 18 years.

Ag Partners is the product of a unique ownership structure; amid a sea of cooperatives in northwestern Iowa, the company is neither a cooperative nor a private company. In 1997 global agriculture conglomerate Cargill joined the progressive Albert City Elevator (Alceco), a cooperative, creating joint venture Ag Partners.

The best of both ag-worlds

“We were the first LLC joint venture that Cargill did with a cooperative in 1997,” says Scott Lovin, vice president of feed for Ag Partners. “Because of the very different structures there were people who said it would never last, after the first five years it would be over, but here we are 18 years later.”

The partnership between Cargill and Alceco offers local producers a combination of both extensive financial and logistical assets with the traditional cooperative ability to share in profits and impact business decisions. “It’s like having the best of both worlds with members from Cargill and Alceco on our board,” explains Lovin. “Ag Partners has the balance of the farmer-owned co-op and Cargill, one of the largest global influencers in Ag; I think this sets us apart in the world we live in today.”

“In the 50-50 partnership, there’s the business knowhow of Cargill but the voice of ‘is it good for the farmer who owns 120 acres,’” says Lovin.

While this joint venture has been going strong for 18 years, Alceco has been serving Iowa producers for more than a century. “In 2008, Alceco merged with Midwest Farmers Co-op,” recounts Lovin. “This brought another 10 locations into our mix; now there are 16 in total.”

From bottom to top

Lovin has witnessed the transformation of Ag Partners firsthand, having been in the industry for more than 28 years. “I was raised on a farm working with my father doing farrow to finish in hogs and we were always around livestock,” he reminisces. “When I graduated from high school in 1980 I went on to a carpentry trade school and worked for a roofing company.”

Yet, Lovin was drawn back to the farm and his roots in Albert City. “At that point, in 1983, there was an elevator opening in town and I went to work in the feed department, doing bagging, pelleting, mixing and driving truck – the full gamut,” he recalls. “In 1986 a devastating fire destroyed the feed mill and I took a position with another local feed dealer 10 miles away.”

Lovin was eventually recruited back to Alceco where he worked in animal health, purchasing and sales until the former vice president of feed retired. “I worked my way up from the production floor to management and eventually vice president,” says Lovin. “What better way is there to learn a business?”

Going strong in various sectors

Today, Ag Partners addresses many facets of the business – retail agronomy, feed, energy – but Lovin says the largest sector is grain. Between Albert City, Matlock, Sutherland, North and South Sheldon and nine other locations, Ag Partners has 36 million bushels of licensed grain space and an additional 11 million bushels of temporary space for storage.

“We also have five shuttle loaders on the rail side, giving us access to several major lines,” says Lovin. “Through rail access we sell not only to the eastern Iowa markets, but also to other western states, export ports and Mexico.”

But this business has slowed in recent years as petroleum and ethanol dominate rail lines. “Shipping by rail is how we built a legacy – at one time we were shipping 50 to 100 trains a year, now it’s more like 20 to 40,” estimates Lovin. “Ethanol and petroleum are larger revenue generators for rail lines than corn.”

Fortunately, when one side of the business slows, Ag Partners has multiple divisions to keep chugging forward. “In the last 10 years we’ve become more agronomy driven, but feed is continuing to emerge as a strong earning contributor,” says Lovin. “In January 2015 we opened a brand new feed mill with capacity of over 800,000 ton annually. This mill is twice the size of the original.”

Lovin adds that the Ellsworth feed mill is one of the largest capital investments in the history of Ag Partners. With 1,800 tons of storage, the new mill has the capacity to create up to 100 tons of pellets per hour and can mix a semi-load of feed in less than eight minutes. “This is record-breaking for us,” says Lovin.

By continually investing in facilities and equipment, Ag Partners LLC in turn invests in the prosperity of its customers and the hybrid-ag company looks forward to a strong year in 2015.

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