Farmers Elevator & Exchange unveils $3.5 million
Farmers Elevator & Exchange unveils $3.5 million investment for the future By Forrest Gossett Salt River Journal Editor Posted Mar 7, 2018 at 2:30 PM Marlin McCormick, general manager of Farmers Elevator & Exchange for the last 15 years, said that making the investment was necessary to keep the co-op competitive in the swine feeding marketplace. In the 99 years that it has been in business, the Farmers Elevator & Exchange in Monroe City has reshaped it business to stay ahead of the markets it serves. The moves have worked, as the market value of the co-op has increased $3 million 15 years ago to more than $12.5 million. Growth has come from change. For instance, the co-op, which sold $1.3 million of grain, fertilizer, coal, seed, feed, flour, eggs and cream and in 1958 has evolved into a business that generated $17 million in revenues from three core businesses: feed, grain and agronomy. 1
But with all the success, two years ago, the co-op’s management team and board of directors confronted a market that was demanding changes in the feed business. Swine producers wanted more efficient mixes of feed, something that existing technology did not allow Farmers Elevator and Exchange to perform. “For years, feed was not precise. With the mixes you may underfeed 50-pound animals and overfeed a 300-pound animal,” said Ron Dean, the co-op’s longtime livestock specialist. “We needed to respond.” Marlin McCormick, general manager of Farmers Elevator & Exchange for the last 15 years, said that making the investment was necessary to keep the co-op competitive in the swine feeding marketplace. “We would not have gone out of business, but we would shrink,” he said. On Saturday, the 30 employees of the co-op showed off their response market demand – a $3.5 million expansion in invests heavily in technology to meet the needs of swine producers and help position for the future. “This is an investment in our community and the 30 families who look to us for a living,” McCormick said. “There is a view by some that rural America is just shrinking away...we are proof that not true.” With the new investment in machinery and technology, Farmers Elevator & Exchange can provide precise measurements of food and nutrients for each phase of swine development. The investment produces a significant cost-savings for producers — as much a $1 per animal taken to market. “One dollar may not sound like much, but when you are processing thousands of animals, it is significant,” Dean said. Dean spearheaded a team to plan and recommend the expansion to the co-op’s board of directors. After approval of the board, it was time to get financing. McCormick took the business plan for the expansion to the co-op’s bank, Hannibal National Bank, to discuss financing and how the Farmers Exchange & Elevator planned to meet producer needs. Jeff Albos, an HNB vice president who runs the bank’s Perry location, said that the plan was clearly carefully reviewed. “We have a good business relationship with Farmers, and anytime a customer wants to double debt load for an expansion, you conduct good review,” he said. “It made sense.” HNB and the co-op then reached out to the U.S. Department of Agriculture’s Rural Development Program. Steve Gerrish, a rural development specialist based in Moberly, led the USDA review. 2
The result was a USDA loan guarantee for 80 percent of the $3.5 million loan with a 15-year note. “This is really about rural economic development,” Gerrish said, “and this project makes sense.” McCormick said that once construction started last year, the co-op worked to hire area contactors to perform the work. “We hired for almost all our needs within Missouri,” he said. “That was important.” McCormick believes that the expansion can help the company continue a 15-year growth track that has witnessed the co-op move from milling delivering 35,000 tons of bulk feed to milling and delivering over 74,000 tons of livestock feed in 2017 With the expansion, the co-op can process 31 tons of rolled corn per hour. Moreover, the expansion continues a move to improve the skills of employees as jobs have increasingly moved from primarily manual labor to a job that requires technological skills, although there is still some manual labor. Dean said that employees are quickly adapting to the new technology. “There is a learning curve, but they are doing well,” he said. As he talked with visitors on Saturday, McCormick said the investment has positioned Farmers Elevator & Exchange to many years to come. “This investment will allow this nearly 100-year-old cooperative to continue to support farmers who want to produce safe food and compete in the world market today,” he said.
3
But with all the success, two years ago, the co-op’s management team and board of directors confronted a market that was demanding changes in the feed business. Swine producers wanted more efficient mixes of feed, something that existing technology did not allow Farmers Elevator and Exchange to perform. “For years, feed was not precise. With the mixes you may underfeed 50-pound animals and overfeed a 300-pound animal,” said Ron Dean, the co-op’s longtime livestock specialist. “We needed to respond.” Marlin McCormick, general manager of Farmers Elevator & Exchange for the last 15 years, said that making the investment was necessary to keep the co-op competitive in the swine feeding marketplace. “We would not have gone out of business, but we would shrink,” he said. On Saturday, the 30 employees of the co-op showed off their response market demand – a $3.5 million expansion in invests heavily in technology to meet the needs of swine producers and help position for the future. “This is an investment in our community and the 30 families who look to us for a living,” McCormick said. “There is a view by some that rural America is just shrinking away...we are proof that not true.” With the new investment in machinery and technology, Farmers Elevator & Exchange can provide precise measurements of food and nutrients for each phase of swine development. The investment produces a significant cost-savings for producers — as much a $1 per animal taken to market. “One dollar may not sound like much, but when you are processing thousands of animals, it is significant,” Dean said. Dean spearheaded a team to plan and recommend the expansion to the co-op’s board of directors. After approval of the board, it was time to get financing. McCormick took the business plan for the expansion to the co-op’s bank, Hannibal National Bank, to discuss financing and how the Farmers Exchange & Elevator planned to meet producer needs. Jeff Albos, an HNB vice president who runs the bank’s Perry location, said that the plan was clearly carefully reviewed. “We have a good business relationship with Farmers, and anytime a customer wants to double debt load for an expansion, you conduct good review,” he said. “It made sense.” HNB and the co-op then reached out to the U.S. Department of Agriculture’s Rural Development Program. Steve Gerrish, a rural development specialist based in Moberly, led the USDA review. 2
The result was a USDA loan guarantee for 80 percent of the $3.5 million loan with a 15-year note. “This is really about rural economic development,” Gerrish said, “and this project makes sense.” McCormick said that once construction started last year, the co-op worked to hire area contactors to perform the work. “We hired for almost all our needs within Missouri,” he said. “That was important.” McCormick believes that the expansion can help the company continue a 15-year growth track that has witnessed the co-op move from milling delivering 35,000 tons of bulk feed to milling and delivering over 74,000 tons of livestock feed in 2017 With the expansion, the co-op can process 31 tons of rolled corn per hour. Moreover, the expansion continues a move to improve the skills of employees as jobs have increasingly moved from primarily manual labor to a job that requires technological skills, although there is still some manual labor. Dean said that employees are quickly adapting to the new technology. “There is a learning curve, but they are doing well,” he said. As he talked with visitors on Saturday, McCormick said the investment has positioned Farmers Elevator & Exchange to many years to come. “This investment will allow this nearly 100-year-old cooperative to continue to support farmers who want to produce safe food and compete in the world market today,” he said.
3
