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Kanza Coop: A Member-owned Agricultural Association Serving Growers in Kansas
Kanza Coop (Kanza) has been serving the agricultural market in Kansas for nearly 100 years; however, did not adopt the Kanza name until 2002 after a series of mergers between deeply rooted Kansas-associated cooperatives. Today Kanza is a full-service agricultural cooperative serving multiple counties in Kansas, specifically Pratt and Stafford.
“We cover the central region,” notes Bruce Krehbiel, president and CEO of Kanza. “We are near the aquifer, which makes our region very good land for irrigation. Our team is big on grain and agronomy, commodities and fuel. Those are the main components of our business.”
Krehbiel started out in agriculture at the age of 12, giving him the benefit of longtime experience. “I’ve been doing this for 47 years altogether,” he explains. “I know that once you get to a certain size, a cooperative has to run like any other business.”
Not only does his background serve him well, but Krehbiel has been with the business since 1986. “For seven years before this, I worked with a farmers’ cooperative in Lawrence,” Krehbiel says. “Before that I was auditing cooperatives for a CPA firm after graduating from college. My father was a traveling coop manager. We were in a different place every five years and I wanted to settle in one region with my family. I raised five kids in Pratt and two of them work for me now.”
Knowledge and familiarity steered Krehbiel well. “We got into this industry early and with a better understanding of risk management than surrounding cooperatives,” he details. “We’re ahead of the game on that. Once you’ve been involved in hedging fuels, agronomy products and specifically grain, you get farther up the learning curve than competitors. We still have that advantage. As far as how that translates, our competitors are coops that have grown as well. Everyone has become more efficient.”
Like many long-standing entities, Krehbiel notes it has been an adventure. “We have gone through a number of mergers, essentially duplicating what we do in each location,” he elaborates. “One of the biggest advantages in management is getting in young and staying for a long time. We have developed a clientele base, which is the same advantage that an independent has if you start young. Lots of businesses these days change management too much, but we offer continuity. Our members and customers know what to expect.”
At the same time, Krehbiel notes that change can be a good thing. “We cannot change our vision too much,” he explains. “We have great base reporting, accounting and an agronomy package that works. Of course, as times change, we have to listen to what our customers need in order to adapt our approach to these services. We keep our thumb on the trends. 10 years before the country went corn crazy, we already had elevators built. We’ve ramped up our fuel services and we were one of the early cooperatives to open convenience stores.”
Adapting to Customer Needs
Along the way, Kanza has added various new services and made changes to existing ones in order to better cater to its customer base. “We’ve gotten into the convenience stores, specialty feed and the pheasant business,” he details. It took a number of years and we had several guys raising the birds for us. In general, this was a non-member focused business, much like the convenience stores. These initiatives allowed us to patronize the cooperative with non-member earnings and we started gaining more pre-capital to spend.”
Two years ago, the business switched up its equity management program. “We switched away from age retirement and over to a revolving equity program,” Krehbiel explains. “We used to redeem members’ equity at age 72 in an age of patron redemption program. Now we are gradually phasing out the age of patron program in favor of the new revolving equity redemption program. The new program improves balance sheet management and has allowed the board to reward long time members by redeeming retained equity before their 72nd birthday.”
Most recently, the team decided to build up a cross-country trading firm. The firm takes expertise in trading of grain and byproducts, buying from other companies and selling to others. These connections have allowed Kanza to sell Kansas in-house products to other markets.
“We can do it 12 months per year,” Krehbiel adds. “We called it Sunflower Commodity Trading. It took us a while to find right people to get it started, but it has been running and profitable for over a year and a half now.”
Krehbiel and his team of more than 140 employees are dedicated to continued growth both for the business and its members; he is proud to note that his people have made Kanza a good place to work and shop.
“Over the next few years we want to continue to grow,” Krehbiel explains. “There are some merger and acquisition possibilities that we are looking into. We have the right people so we can build up our facilities as well as our programs.”
The team continues to apply leading experience and professionalism to benefit the cooperative’s member base and programs, allowing Kanza Coop to thrive throughout U.S. agricultural market.
For more information about Kanza Coop, please visit: www.kanzacoop.com.