Kanza Cooperative

After 100 years in business, a merger proves to be beneficial for all parties
Written by: 
Tom Faunce
Produced by: 
Dana Merk-Wynne

Serving the Kansas agricultural market for more than 100 years, Kanza Cooperative is the result of a series of mergers between deeply rooted Kansas-associated cooperatives. Established in 1915, the co-op adopted the name Kanza in 2002 and is currently a full-service agricultural co-op serving multiple counties in Kansas.

A member-owned association, Kanza manages 17 grain-handling locations throughout central Kansas. In addition to its dedicated grain department, Kanza also provides feed, seed, fertilizer and fuel services with a professional staff and quality facilities. “Our goal is to offer a complete solution of ag services for today’s producer while keeping a focus on future agricultural opportunities,” says Bruce Krehbiel, CEO of Kanza. “We do just about as much business in fuel as we do in agronomy products.”

Kanza Cooperative

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.”

A marriage of two like-minded companies

As of January 2016, Kanza has increased its volume by approximately 50 percent due to a merger with Andale Farmer’s Co-op in Wichita, Kansas. This extends Kanza’s reach to four counties. “They celebrated their 75th anniversary and then merged with us as we celebrated our 100th,” says Krehbiel. “It has been a great experience. There are so many great people on both sides.”

According to Krehbiel, the blend of talent from both co-ops occurred with perfect timing. With the CEO of Andale retiring, the company was interested in seeking out new opportunities. As local agricultural economies are shrinking in the U.S., all those involved in the industry are benefiting from consolidation. For Kanza, the merger with Andale presented obvious advantages as all of its wheat is moved to flour mills in Wichita, while all of their corn comes back to Kanza’s location in Pratt, Kansas. “This allows us to lower our costs and extend the savings to our customers,” Krehbiel explains.

Krehbiel began discussing the merger with Andale in March 2015. On December 10, when the time for a vote arrived, 88 percent of Andale members voted in favor of the merger. The next day, Kanza’s stockholders provided their input and voted unanimously to accept. 20 days later, the merger went into effect. “It took some amazing people to put the whole thing together in 20 days,” says Krehbiel. “We did a lot of preplanning before the vote so we could hit the ground running when it went through.”

When considering expansion, Kanza does not just merge with or acquire any firm that comes along. The company looks at specific farming areas, cooperative facilities and volumes that fit Kanza’s business plan. “It’s all about having a solid foundation,” shares Krehbiel. “You need to have good controls on the backside as well as making sure the inventory systems are appropriate and communication is strong with customers.”

A wealth of experience

Starting in the agriculture industry at the age of 12, Krehbiel brings a lifetime of experience to Kanza. Krehbiel joined Kanza in 1986 after working for a co-op in Lawrence, Kansas. Before that, he worked for an accounting firm auditing co-ops, which provided him with experience in the business and financial aspects of co-op operation. “I’ve been doing this for 50 years altogether,” he explains. “I know that once you get to a certain size, a cooperative has to run like any other business.”

As a child, Krehbiel’s family often relocated as his father was a traveling co-op manager. “We were in a different place every five years,” he recalls. “I wanted to settle in one region with my family. I have raised five kids and two of them work for me now.”

While Kanza is planning to digest the recent merger for the time being, the company is expanding as far as storage space. Kanza is building facilities in both eastern and western regions of the state. “We’re growing bigger and more crops these days,” says Krehbiel. “We produce about the same amount every year but with the fluctuation of process and currency values it can be difficult to export crops at times.”

The Kanza team continues to apply leading experience and professionalism to benefit the cooperative’s member base and programs, allowing Kanza Cooperative to thrive throughout the U.S. agricultural market.

Strategic Partnership(s): 
INTL-FC Stone
Martindell, Swearer, Shaffer, Ridenour
Syngenta
Winfield Soultions/Land O' Lakes