Southern States Cooperative at 100: A Story a Century in the Making

Editor’s note: The role of the ag retailer and trusted advisor to farmers across the U.S. is constantly changing — never more so than in the last three years. As the dust is seemingly settling — new market dynamics are here to stay, and many tried and true practices are gone for good. As the linchpin between grower-customer and the suppliers of sophisticated tools they use, ag retailers in the U.S. are essential to pushing crop production to the next level. In recognizing 40 years of the CropLife 100 ag retail ranking program, our editors will engage with numerous CropLife 100 ag retailers at the National, Co-op, and Independent levels and unearth opportunities and concerns in today’s modern agricultural market. We will also feature numerous stories throughout the year focusing on ag retailers that are celebrating milestones, exploring how they have managed to survive and thrive where others have not. This month, we look back at the 100-year history of Southern States Cooperative

From the company’s central office building on West Broad Street in Richmond, VA, Southern States Cooperative General Manager and CEO Steve Becraft considers the organization’s path to 2023, and smiles.

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“Our cooperative has an incredible story to tell, from its early days to today,” Becraft says.

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Here at CropLife® magazine, we couldn’t agree more. So here is the story of Southern States, from its humble beginnings to the 100-year mark. With luck, this article might also serve as a preview of what the next 100 years might look like for the cooperative.

When CropLife asked long-time Southern States employees to describe the company in one word, several descriptors were bandied about. This included dedicated, family, and diverse. But according to Geralyn Gravatt, Senior Vice President, Human Resources, and a company employee for 42 years, the one word that comes to her mind to best describe Southern States is “respected.”

“This company has a long-standing history of being respected within the ag industry,” Gravatt says. “Much of the success Southern States has had over the years is a result of the respect our employees have earned from our customers. Southern States has passionate and dedicated employees who put forth their best effort and inspire one another to serve our customers well.”

In his mind, says Jim Ebert, Senior Product Line Leader, Crop Protection Products, part of this earned respect goes back to how Southern States has evolved its outlets over the decades. “In the early days, you had a lot of farm stores out there that were like general stores,” Ebert says. “They would service everything, from feed to farm supplies to petroleum, hardware, and more. But when I look at our locations now, they are much more specialized to meet the needs of their market. We still service a lot of different markets, but we have a much higher percentage of stores that are strictly agronomy locations, that are strictly turf locations, that are strictly energy locations versus the general store concept.”

Fulfilling a Need 100 Years Ago

In truth, long-time observers of Southern States shouldn’t be that surprised by this specialization approach taken by the company with regards to the ag market. The cooperative can trace its beginnings to this desire to fulfill an unmet need for growers.

Back in 1923, growers in Virginia were desperate for access to a reliable supply of high quality, disease-resistant clover and alfalfa seed that could grow in the region’s soils and climate. So, 150 growers from across the Commonwealth banded together to form a new organization to provide this kind of seed. Calling the new entity Virginia Seed Service (VSS), the members pledged $11,000 in start-up capital and hired a Virginia Tech Extension Agronomist, W.G. Wysor, as the cooperative’s first General Manager.



Over the next decade. VSS continued to expand the kinds of products it offered grower-customers. By the middle of the 1920s, it began distributing feed and fertilizer in addition to seed. Other farm supplies and petroleum were added to the cooperative’s line-ups by the end of the decade. By 1933, with VSS now doing business not only in its home state of Virginia but also on a limited basis in nearby North Carolina, the company formally adopted the Southern States name. Over the next few decades, Southern States Cooperative added facilities in additional states such as Maryland, Delaware, West Virginia, and Kentucky. Supplies for home and garden were also being offered to customers and manufacturing plants for feed and fertilizer came online during this time.

During the late 1990s, Southern States kept expanding its operations into new ventures. In 1998, the company added livestock marketing stations and other facilities in Kentucky, Michigan, Ohio, and Indiana in a merger with Michigan Livestock Exchange. Later that same year, Southern States purchased the wholesale and retail farm supply system of GoldKist, Inc., adding states in the Southeast to its operating and service territory. In 2000, the cooperative brought expansion in sales and service area as it assumed the marketing and distribution of farm and home supplies for Agway in 12 Northeastern states.

For the next 20 years, Southern States operated as both a wholesale and retail supply cooperative serving more than 1,200 retail outlets across 21 states. And this, according to Becraft, this presented a whole new set of challenges for the company as it neared its 100th birthday.

Being a Survivor

As the decade of the 2010s was coming to an end, Becraft says, it was clear that Southern States had grown a bit unwieldly as a company. Doing business in so many different markets led to Southern States being “a mile wide and an inch deep, trying to do everything for everybody” with regards to its organizational focus, he says.

“Using an agricultural analogy, we were like a 10,000-acre farmer with a 500-acre balance sheet,” Becraft says. “For example, we would tie up 80% to 90% of our working capital as a company building inventory for our wholesale business, where the margins tend to be so narrow, at the expense of helping position our retail businesses to compete.”

For those who oversaw Southern States, it was clear that if the cooperative was going to return to profitability it needed to go back to its roots as a retailer focused on its members and customers. So, Southern States implemented a plan to exit the wholesale business. In 2017, the cooperative sold its feed manufacturing business to Cargill Animal Nutrition, along with its retail agronomy outlets in Georgia and Alabama to CPS (now Nutrien). In 2020, GROWMARK acquired the Southern States wholesale energy and wholesale agronomy businesses, along with seven retail locations in Delaware and Eastern Maryland.

“It was a challenge unwinding all those other businesses, but it needed to be done,” Becraft says. “Over the past three years, we divested all our wholesale businesses and we’re now focused on delivering ‘that last mile’ to the growers. I think that’s really unlocked the value of the cooperative.”

And the numbers back up this assertion. According to Becraft, Southern States in 2022 had record earnings from operations, being $9.5 million ahead of its projected budget. Better still, he says the company is on pace for another strong sales year in 2023, as it celebrates 100 years in business. “It’s been over 20 years since this company has put two profitable years together back-to-back,” Becraft says.

When he was asked the one word that best describes Southern States in 2023, Becraft points to current events for his inspiration.

“Survivor,” he says. “We’ve gone through radical changes in our business structure, business model, and scale over the past two years. Our previous CEO, Jeff Stroburg, acknowledged that we had lost our way a bit, and stressed that Southern States needed to return to its roots as a retail-farmer cooperative. Now, we have a narrower focus and are half the size we were three years ago. But we are making money and with a sustainable growth plan and a bright future.”

A Helping Partner

Besides right-sizing the company, Southern States sought out some help from a fellow Cooperative: GROWMARK. Following the Bloomington, IL-based cooperative’s acquisition of Southern States’ wholesale energy and agronomy businesses, the two companies have built a strong relationship. In fact, during 2020, Southern States formally became a member of the GROWMARK Cooperative System. According to Becraft, this partnership has allowed Southern States to operate as its own independent company while utilizing GROWMARK member products and services.

“GROWMARK was willing to invest in Southern States, providing us with a line of credit and access to all of its member services,” Becraft says. “They also provided us with a fresh set of eyes to drive change as we aligned our business to a retail-only model.”

Part of this change for the future involves the use of technology. At the most basic level, says Keith Reid, Agronomy Operations Lead, technology improvements have already represented some of the biggest changes at Southern States over the years.

“Technology has improved so much since I joined the company 34 years ago and Southern States has taken advantage of it,” Reid says. “It used to take weeks to close out the books for a given month and now it is done in eight days. We have stronger decision-making tools and data available at the push of a button than we ever had 30 years ago.”

And according to Becraft, embracing even more technology will be one way Southern States positions itself to keep growing in the years ahead. “Technology has always been an important tool for our company, and we will get more efficient. Labor or staffing is a challenge for us and many other agricultural companies and farms embracing new technologies will improve our operational efficiency and that will be a partial solution to the industry’s staffing challenges.”

However, even as Southern States embarks on these new paths towards the future, the ultimate goal for the company ties directly back to its founding 100 years ago, Becraft says. “To be a good, successful retailer, it’s all about having great people and building up a solid foundation of trust with the farmers,” he says. “I think Southern States clearing the field of all those other businesses and distractions and becoming an organization focused on the customers is paying off and will continue to do so.”

In the near-term, Southern States and its employees are gearing up to celebrate the company’s 100th anniversary in style. In January, the company celebrated with employees by feasting on an anniversary cake (along with some special guests from industry partner GROWMARK). Next up, Southern States will formally open a time capsule that was buried in 1978, when the company officially opened its central office building on West Broad Street.

“I’m excited to be part of a company that has made it to 100 years, when so few of them do so,” Cliff Hardin, Business Support Services, says. “When you consider how much the markets have changed over the past 100 years, Southern States is really something special!”

As for Becraft, his fervent wish is that the people who follow his tenure at Southern States look back on this time with the company and remember the changes the team implemented to assure its future.

When asked what he would like his legacy to be, he said “I want future generations to remember me as someone who had an impact on the company culture when it needed it,” he says. “Retail is a people business, and it is these people who have helped make Southern States what it is today. I hope to be remembered for helping develop a strong team, working together towards a future where Southern States continues to be a strong retail organization for the next 100 years.”

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