The other day, another in what has become a long line of news items hit my email inbox. Recently, two Iowa-based cooperatives – NEW Cooperative and MaxYield Cooperative – announced that after conducing a study to see if merging made sense, their respective board of directors would formally put a merger proposal to a vote with their members. If approved, the new cooperative would likely begin operation before the end of 2021.
As I said, this consolidation among ag retailers news no longer seems uncommon. Indeed, during the past few years, dozens of ag retailers – many members of our magazine’s annual CropLife 100 rankings – have decided that the best way to remain a successful business in the 2020s is to improve their industry footprints by adding members, employees, outlets, and territory. Looking at some hard numbers, USDA Rural Development estimates that there were almost 3,000 cooperatives doing business in the U.S. back in 1990. By the end of 2020, this number had shrunk to just over 750.
And for many ag retailers, this approach has led to success. In fact, farmer-owned Landus Cooperative recently celebrated its five-year anniversary. Since Farmers Cooperative and West Central merged in 2016 to form Landus, the company has had many achievements, including multiple facility updates, launch of company-branded soybean seed AcreEdge, and the implementation of a customer portal/mobile app.
According to Matt Carstens, President/CEO, the last 12 months have been witness to an unprecedented pace of advancement at Landus. “This past year has presented many challenges for our employees and farmer-owners from a global pandemic to extreme weather events like the drought and derecho of the 2020 growing season,” said Carstens. “Through it all we managed to achieve our first year of profitability, evolve the way we go to market, and establish the building blocks for future innovations.”
Given what we’ve already seen in 2021, ag retail market watchers should probably expect many more such consolidation announcements to appear before the end of the year as well.