Farmers Cooperative: Investing in Success
Farmers Cooperative began March 28, 1903, when a group of 115 farmers joined together in Nebraska to form the Dorchester Farmers Cooperative Grain and Livestock Association. The farmers’ goal was to leverage collective resources for the greater good of the group. Nearly 110 years and many mergers and acquisitions later, the cooperative’s mission remains the same as it serves nearly 9,000 cooperative owners at 48 locations in Nebraska and northeast Kansas.
Farmers Cooperative equips modern-day clients with the most cost-effective and high-quality products and services available, ensuring successful competition in a global marketplace. Behind the scenes, Farmers Cooperative works to stay ahead of the competition by investing in the tools and techniques needed to better manage risk and ensure the maximum return on each owner’s investment.
“Our mission is and has always been to be a full-service cooperative owned and run by farmers, for the farmers,” asserts Ron Velder, general manager at Farmers Cooperative. The cooperative maintains headquarters and a 110-car rail shipping facility in Dorchester, Neb., supported by rail facilities in Plymouth, Jansen and Exeter, Neb., and one 110-car rail shipping facility in Hanover, Kan. The cooperative provides all four major support areas for the region’s producers, including a fully equipped agronomy department, a comprehensive grain marketing and risk management department, a feed department and an energy department that also sells tires, batteries and accessories for both commercial and agricultural equipment.
Farmers Cooperative pursues growth through diversification and maintaining a strong financial standing for the good of each member-owner. “We are trying to hit a lot of singles and doubles, not home runs,” explains Velder.
In fact, the cooperative existed almost 100 years before merging with another cooperative, which ultimately took place in 1994. Velder attests that the cooperative basically doubled in size as a result, but the strong community ties of each organization ensured the new organization retain the close and personalized level of customer service that members expect from a locally owned cooperative.
“Since then we have had quite a few mergers and acquisitions, with one of the biggest game-changing mergers in 2002,” adds Velder. This merger not only increased the cooperative’s geographical footprint, but it extended the cooperative’s grain marketing reach internationally with the addition of Union Pacific railway shipping. Farmers Cooperative currently operates three 100-car UP shuttle shipping facilities and one 110-car Burlington Northern Santa Fe (BNSF) railway shuttle facility to access export markets in the Pacific Northwest, the Gulf, Canada and Mexico.
The cooperative handles roughly 75 million bushels of grain annually and maintains state licensing to handle approximately 48 million bushels of corn, wheat, sorghum and soybeans, as well as specialty grains. Farmers Cooperative has invested in a quality grain marketing team to provide producers with multiple grain contracting options and risk management strategies. Customized 24-hour DTN grain market bids, personal contact and daily emailed market commentary keep the client base informed and ahead of the curve.
At the same time, Farmers Cooperative looks to attract and retain the most talented agronomy professionals in the industry to offer state-of the-art crop input and application services to maximize growers’ yields. The cooperative provides variable rate fertility services, custom application and precision agronomy hardware sales and service. A full line up of corn, soybean, wheat, sorghum, alfalfa and sunflower seeds is also supplied directly to customers through bulk seed plants in Milford, Princeton, Plymouth, Odell, Milligan and Fairbury. According to Velder, this is all to maximize profitability of a producer’s personalized crop production program.
“The agronomy department changes and grows every year,” he explains. “GPS-guided grid and zone soil sampling and custom ground and aerial application gets more popular every year and we’re always working to ensure that we can stay a step ahead of the farmer and provide them with exactly the services they need.”
Weather Adjustments and Local Investments
More recently, the cooperative focused its efforts on helping farmers overcome the challenges of an unusually dry year in 2012. The year brought record irrigation energy demand and the resulting increase in spider mite populations, which can wreak havoc on crops. The cooperative’s energy and agronomy department scaled up fuel delivery and aerial spider mite treatment programs, keeping customers informed through the cooperative’s regular agronomy and energy communications. Farmers Cooperative’s livestock nutrition team is also helping cow/calf producers face the many challenges of 2012’s drought-ravaged, forage-short year.
Meanwhile, Farmers Cooperative continued pursuing expansion and improvements across all of its grain storage facilities. According to Velder, the cooperative made improvements to nearly every single location over the past 10 years. In 2012 alone Farmers Cooperative tackled improvements at six locations.
“We added roughly 3 million bushels of grain storage in 2012 and increased our total storage by 15 million bushels within the last 10 years,” states Velder. “Our biggest concerns in the next few years will continue to be regulatory compliance, risk management and retention of talented employees, but we’re all in this together.”
Even so, Farmers Cooperative managed to make the most of the 2011 fiscal year, returning a whopping $10 million to shareholders and investing in its owners’ future success through capital improvements. These investments will carry on through 2012 and beyond, ensuring Farmers Cooperative and the Great Plains agricultural community it serves both remain successful.