Valley Agronomics LLC
As of the new year, Valley Agronomics LLC is realizing the truism that two is better than one.
In early November 2016, the agronomy division of Valley Wide Cooperative, a grower-owned cooperative in southern Idaho and Utah, announced it would be combining with Wilco-Winfield, a joint venture between Winfield Solutions LLC, a national distributor of seed and crop protection products, and Wilco, an agricultural supply cooperative located in the Willamette Valley in Oregon.
The new joint venture, under Valley Agronomics’ name, is a way for the two cooperatives to remain relevant in the ever-competitive agronomy sector.
“We’re looking to combine the resources of these two strong companies,” says Richard Lloyd, general manager of Valley Agronomics. “By utilizing our strengths, we can increase our level of expertise among our teams, expand in some geographies that we are not servicing today and help the growers we currently work with by absorbing some of their risks.”
Neighbors in ag
The idea of the joint venture is only a few years old, but Valley Wide Cooperative and Wilco have worked in parallel for over a decade, servicing neighboring regions in the Pacific Northwest through similar arrangements with Winfield, the agronomy division of Land O’Lakes, one of the largest agricultural cooperatives in the country.
Both of those arrangements stem back to 2006, when the cooperatives formed separate joint ventures with Winfield: Wilco formed Wilco-Winfield, the co-ops agronomy service; and Valley Wide Cooperative formed Valley Agronomics, its own agronomy division, which has a focus on precision agronomics, water and soil testing, and seed and grain handling.
In both cases, the logic of partnering with Winfield was to get better deals on all farming inputs, from seed to fertilizer, and also to whisk in a technology-oriented approach among growers. In the case of Valley Agronomics, the co-op was able to help growers of potatoes, sugar beets, onions and mint in southern Idaho and Utah employ variable rate crop protection, crop nutrient and seeding techniques.
“Now, instead of using one application mix for the entire field, we can variable rate sometimes six or seven products based on what that part of the field actually needs and by doing that we’re seeing growers raise better crops and they are being better stewards for the environment because they are not under or over applying,” Lloyd says.
In Oregon and Washington, Wilco-Winfield was able to bring similar techniques to hazelnut, hay and potato farmers.
By combing their resources in this new joint venture, Lloyd says Valley Agronomics and Wilco-Winfield will be able to bring more technology and savings to growers.
Because once Wilco, with its seven locations across Oregon and Washington, combines with Valley Agronomics’ 14 locations in Idaho and Utah, the new partnership can demand even better prices on all its seed and crop protection products, savings they can then pass on to their growers and customers.
“By being partners and co-owners of our joint venture, as we successfully secure customers and growers and provide them with value in the long term; we’ll all share in the profits,” says Lloyd
The joint venture will also allow Valley Agronomy to diversify because Wilco’s farmers add new crops to the cooperative, such as hazelnuts, making it more resilient in the face of crop failures.
Combining to thrive
According to Lloyd, in the agriculture sector, these benefits are just a few reasons why cooperatives form these kinds of partnerships.
For instance, he’s seen some publically traded companies look at mergers as a way of consolidating overhead by cutting costs and services.
“But I don’t believe that’s great for the farmer or the agriculture business overall,” he says. For him, that attitude means the companies and cooperatives are only addressing short-term concerns, such as the company’s quarterly report.
Valley Agronomics sees its joint venture as an opportunity to grow in size and relevance, “and compete with potentially more challenging circumstances and margins,” Lloyd says.
By expanding into more states, the cooperative envisions opening new offices and potentially hiring more staff as it attracts additional members, while at the same time giving a more personalized approach to its current growers.
“The driving factor of our businesses ventures has always been: we want to be the very best at what we do,” says Lloyd. “We have a very close relationship with our growers because we are grower-owned, and more importantly, grower focused. We want to do a great job as far as being able to provide valuable services to our customers.”