Cooperative Consolidation Continues
As I put this enewsletter column together, we’ve just put the finishing touches on our magazine’s annual CropLife 100 report. Now in its 32nd year, the CropLife 100 surveys the nation’s top ag retailers to find out how they collectively performed during the current year and “takes their pulse,” so to speak, when it comes to the outlook for the year ahead. In general, I’m happy to report most of the information gathered in the 2015 CropLife 100 was positive, with crop protection products and custom application both showing impressive gains. Look for more information on this report in the upcoming weeks.
But one aspect of the annual ranking of the top ag retailers is seeing how many of them disappear from one year to the next through the mergers and acquisitions route. This year was particularly quiet on that front, with only a pair of CropLife 100 retailers leaving the list in this manner.
However, the final few months of 2015 and early part of 2016 promise to see a new wave of consolidations – in particular, among some of the nation’s largest cooperatives. Although CropLife 100 members South Dakota Wheat Growers and North Central Farmers Elevator decided against joining forces in this way, other companies on the 2015 listing are apparently ready to take this step. Before 2016 is too old, it looks as if Cooperative Elevator Association will join forces with United Farmers Coop and Farmers Elevator Cooperative, all three of which are based in Iowa. Also moving towards consolidation are CropLife 100 members Farmers Cooperative (FC), Ames, IA, and West Central Cooperative (WCC), Ralston, IA, which should be known by December 18 when members votes are counted.
“By merging FC and WCC, members would truly have an ownership stake in every step of the value-added supply chain,” said WCC President/CEO Milan Kucerak in an official statement. “Whether it’s branded seed, faster grain assets, or value-added corn and soybean processing, a combined cooperative is better positioned to weather market volatility, directly access global markets, and offer more to its owners.”
According to USDA Rural Development, the number of cooperatives in the U.S. has been in steady decline since the early 1990s, dropping from 2,835 in 1990 to 997 in 2015. Within the next five years, predicted the group, this number could fall by another 150
Based upon the 2015 CropLife 100 numbers, we are already on our way to this mark . . .