growing
GROWING
TOGETHER WHEAT GROWERS AND NORTH CENTRAL FARMERS ELEVATOR
INTRODUCING
CentraGro Cooperative
What do you get when you combine North Central Farmers Elevator and Wheat Growers? CentraGro Cooperative! This is the name of the proposed unified cooperative in which the Unification Agreement was approved by both Boards of Directors. The Unification Agreement will now go to members to vote.
“We’re joining together for strength, shared benefits and to create economic opportunity,” said North Central Farmers Elevator Board President Rick Osterday. The new name literally brings together Centra from North Central Farmers Elevator and Gro from Wheat Growers. It also speaks to the central location of the cooperative and its commitment to growing to serve member-owners today and tomorrow.
“It’s about our location and the legacy of the cooperative system. And it’s about helping farmers grow for generations to come,” said Hal Clemensen, Wheat Growers Board President. To learn more about CentraGro Cooperative, please visit growingtogether.coop.
2
IN HIS OWN WORDS:
As we look to the future of the newly formed cooperative, one of the questions that keeps coming up is how will we measure the success of the new co-op. The first thing that comes to mind would be the savings generated by merging the two co-ops. But really that is only part of the equation that the board and management are looking for. We need to focus on retaining the current customer base of both co-ops, reaching out to customers that currently don’t do business with either co-op, or are doing less business with either co-op than they had in the past, and growing relations with new customers. Another way of measuring success would be employee retention. Building on the strength of the current employee group to attract additional top-notch employees is vital to the success of the co-op. Also, forming and strengthening relationships with business partners that share the same philosophy as the new co-op is also part of the equation of being successful. We need to stay competitive in an ever-changing environment and maintain a strong financial balance sheet for the future of the cooperative. We envision that there will be substantial internal growth that will come to the new co-op. By expanding the energy/petroleum division, aerial application and precision ag to a much larger geographical area, the internal growth will benefit each owner of the new co-op. Later you will read more details on what these services will bring to you.
Mike Nickolas is the General Manager of North Central Farmers Elevator. If the unification is approved, he will become CEO of the new cooperative.
In addition to the internal growth opportunity, we also believe there is a greater opportunity for significant growth on the fringe areas of the new co-op, especially where the existing two co-ops do not compete head to head. Dollars that have been invested in facilities where the two companies compete with each other will now be available for investments and expansions in other areas of the current combined trade territory. While there are no plans of trade territory expansion at this time, we do believe that the new co-op will be watched very closely by other co-ops as to the success of it. The potential for footprint expansion due to the success of the new co-op would be very likely in the future. Growth through relationships will also exist whether it is with other co-ops or within the private industry. The strength of the footprint of the new co-op will allow for the possibility of future supply agreements or marketing arrangements with larger suppliers that could take this new co-op to another level. The ability to source larger quantities of ag inputs or to sell larger volumes of grain will allow for greater return to our member-owners. As you, our member-owners, process the information about the Unification Agreement, you’ll see in even greater detail the synergies and opportunities that the combination of North Central and Wheat Growers can deliver. Both Boards of Directors and management teams have spent the last several months working on the Unification Agreement that brings together the best of both co-ops. I encourage you all to read this newsletter highlighting the key points of the unification. You will also receive a copy of the entire Unification Agreement the week of May 26. Voter Information Meetings have been scheduled, and we invite you to attend a meeting that is nearest to you so we can answer any remaining questions you may have. North Central and Wheat Growers have competed well against each other for many years. And that competition has made us both better and stronger. Now it’s time to bring these two great companies together and go forward with a brand new co-op.
3
As a member-owner of North Central Farmers Elevator or Wheat Growers, you will automatically be included in the voting process. Here’s how it works: • You will receive a voting packet containing: – Mail ballot and envelope for mailing ballot
UNIFICATION VOTE TIMELINE May 27
– Voting instructions and procedures – Unification Agreement, including Articles and Bylaws – Notice of special meeting of members – Schedule of voter information meetings • You will then have the opportunity to attend an informational meeting in your area where you can ask questions and also turn in your ballot. • Mailed ballots must be received by 5:00 p.m. on June 17, 2015.
Unification Agreement, voting process and procedures and ballots mailed to current member-owners. June 1–June 10 Informational meetings for member-owners at locations throughout the trade area. June 17 Ballots due by 5:00 pm at Eide Bailly. June 18
• Independent auditor, Eide Bailly, will receive, verify and count all ballots. • Vote results will be announced at the special meeting of members on June 18.
QUESTIONS ABOUT THE PROPOSED UNIFICATION? Visit growingtogether.coop today! 4
Special meetings of the members at 1:00 p.m. for Wheat Growers and 2:00 p.m. for North Central Farmers Elevator at the Dakota Event Center in Aberdeen. North Central Farmers Elevator and Wheat Growers Boards of Directors meet to review and announce results.
INFORMATIONAL MEETINGS Make plans now to attend the informational meeting nearest you to learn about the Unification Agreement, which includes the Articles of Incorporation and Bylaws and details on the new cooperative. Board members, management team members, Eide Bailly and legal representation will be present at all meetings to answer your questions.
EVERY VOTE
COUNTS!
You may also cast your ballots at these meetings. Only Eide Bailly representatives will be allowed to accept your ballot at the meetings.
MEETING SCHEDULE DATE LOCATION TIME
VENUE
June 1
Huron
9:00 – 10:30 AM
Huron Event Center
June 1
Highmore
1:00 – 2:30 PM
Hyde Co Memorial Auditorium
June 2
Ipswich
9:00 – 10:30 AM
NCFE Corporate Office
June 2
Aberdeen
1:00 – 2:30 PM
Dakota Event Center
June 2
Warner
3:30 – 5:00 PM
Warner Town Hall
June 3
Mellette
10:00 – 11:30 AM
Northwestern High School
June 3
Redfield
1:00 – 2:30 PM
4-H Building
June 4
Bowdle
9:00 – 10:30 AM
Bowdle Community Center
June 4
Faulkton
1:00 – 2:30 PM
Faulkton Community Center
June 5
Chamberlain
10:00 – 11:30 AM
Al’s Oasis
June 5
Willow Lake
3:00 – 4:30 PM
WG Willow Lake Office
June 8
Oakes
10:00 – 11:30 AM
WG Oakes Board Room
June 8
Bristol
2:00 – 3:30 PM
WG Bristol Shop
June 9
Hague
8:00 – 9:30 AM
AmVets Hall
June 9
Herreid
10:30 AM – 12:00 PM
Herreid School Gym
June 9
McLaughlin
1:30 – 3:00 PM (MST)
McLaughlin City Auditorium
June 10
Eldridge
10:00 – 11:30 AM
WG Eldridge Office
We realize it’s a busy time of year, but we encourage you to attend a meeting. These meetings will provide you information that will help you make your decision about the unification.
5
STRONGER TOGETHER With North Central Farmers Elevator and Wheat Growers joining forces as the proposed CentraGro Cooperative, all member-owners will be able to take advantage of additional services, including: • Expanded Precision Ag Services
Precision Ag Specialists work with member-owners to pinpoint the right technology, equipment and field data for your needs and production expectations. We work hard to make sure you get the tools and answers you need to make the most out of every acre.
Services include: – Geo-referenced soil sampling – Yield monitors – Planting and application systems – Mapping software and map printing service – Lightbars – AutoSteer systems
• MZB Precision Farming System
MZB is a high-level proprietary precision farming system. It creates up to 12 management zones based on a combination of Veris EC information, RTK elevation readings and satellite imagery. The geo-referenced crop mapping provides exact nutrient requirements.
• Petroleum
Petroleum and energy specialists’ commitment to personalized customer service helping member-owners make precisely the right energy decisions, instead of just making incidental petroleum choices. NCFE technicians specialize in advanced uptime repair work and service care, ensuring less downtime of vehicles and equipment.
Services include: – Fuel delivery system – Bulk gas, diesel and oil delivery – Bulk Diesel Exhaust Fluid (DEF) – Bulk oil tanks – Cardtrol pumps
6
• Aerial Application Member-owners can choose aerial application through NCFE’s partnership with the following LLCs: – NCFE AIR, LLC – NCFE Custom Air, LLC – NCFE Huron Air, LLC – NCFE Hilltop Air, LLC Based out of Highmore, Harrold, Huron and Clark, the skilled pilot-applicators are available across the trade territory. Taking to the skies is a great compliment to the ground services to better serve customers.
GROWING TOGETHER: PROOF THAT IT WORKS In September of 2000, three organizations embarked on a joint venture to form a new company in Huron. Dakotaland Feeds was started by Wheat Growers, North Central Farmers Elevator and Land O’Lakes. The company operates five mills, manufacturing and/or distributing minerals, pelleted feeds, liquid feeds and ethanol co-products. Here’s what General Manager Jarvis Haugeberg has to say about working with both North Central Farmers Elevator and Wheat Growers.
“As General Manager, I have had a unique vantage point to not only observe the cultures of these two successful local co-ops but to pull from the strengths of both organizations. It seems obvious to me that the proposed merger of these co-ops has the potential to combine the best of both successful organizations on a much larger scale for the good of the members and allow the combined co-op to use that strength to be more competitive for the future. When Dakotaland Feeds was formed there were folks that said the company could not survive with both Wheat Growers and North Central Farmers Elevator as corporate owners. I am happy to say we have not only survived, but we have thrived.” JARVIS HAUGEBERG, GENERAL MANAGER DAKOTALAND FEEDS
7
SAVINGS THROUGH SYNERGY
WILL BE USED FOR:
SAVINGS ON: Purchasing Logistics Energy Insurance
44 Million Dollars CentraGro Cooperative, by unifying Wheat Growers and North Central Farmers Elevator, will achieve an estimated $44,429,000 in savings during the next four years alone!
Increased cash patronage payments Additional agronomy and grain services Improved equipment and facilities New technologies
A projected savings of $44 million over the next four years. These savings will be used to pay $13.6 million in cash patronage and provide additional expertise, services and facility upgrades. We will send your cash patronage check to you within 90 days of closing.
8
10
Ways Unification Helps Everyone
The proposed unification of North Central Farmers Elevator and Wheat Growers offers many advantages to member-owners. However, employees and communities also stand to gain from the unification.
FOR MEMBER-OWNERS
FOR EMPLOYEES 5. Continuing opportunities for top talent 6. Additional employees will be needed; both companies have over 60 full-time job openings 7. Larger size and scale present greater opportunities to advance, multiple career paths and competitive HR programs
1. Increased financial synergies and savings 2. Provide new products, services and additional expertise
FOR COMMUNITIES
3. Strong balance sheet to compete with national and multinational agronomy and grain companies in our territory
8. Operations at all present locations will continue
4. The organization remains locally farmer-owned and farmer-governed
9. Unified cooperative will continue to invest in maintaining and upgrading facilities and expanding opportunities in communities 10. Both cooperatives have a history of supporting communities (FFA, 4-H, schools, local fire departments, community programs, etc.)
To learn more about how the proposed unification benefits everyone, see growingtogether.coop.
GOOD NEWS FOR EMPLOYEES Just as the proposed unification will help member-owners, it will also benefit employees.
“One of our biggest challenges in the
No positions will be eliminated; in fact, there are over 60 full-time job openings between the two companies. Employees will not need to reapply for their jobs, wages will not be reduced and benefits will be enhanced.
past, currently and for the future, is
The new larger, customer-focused cooperative will offer increased career opportunities. Employees will be encouraged to achieve their highest potential through career development, which could include learning new tasks or becoming more skilled in a specialized area.
able to have the size and scale to offer
attracting and retaining top talent at all levels. By bringing North Central and Wheat Growers together, we’ll be greater advancement opportunities for all employees, with multiple career paths and competitive human resources programs.” MIKE NICKOLAS GENERAL MANAGER, NCFE
9
THE TALK OF THE TERRITORY
All around the region, people are talking about the potential unification of North Central Farmers Elevator and Wheat Growers. “It’s exciting that people are taking the time to learn about our plans, ask questions and form opinions,” said Hal Clemensen, Wheat Growers Board President.
MEMBER-OWNERS
EMPLOYEES
COMMUNITY
I not only speak as a past director and president of Wheat Growers, but more importantly as a member-owner of a strong, locally owned cooperative, of which I am proud. I am sure the member-owners of North Central Farmers Elevator feel the same way. All of us are concerned, as equity holders, that our two organizations remain financially strong as well as providing the best of goods and services to our member-owners. And I know from experience, we have the best people and employees with these two organizations in providing those services. We cannot overemphasize the importance of having a locally owned and governed co-op where the profits stay local to support my co-op, my town, and community that is so important to me. That to me is community.
Dale Locken, senior leadership, and our Board have been passionate over the years in emphasizing our Mission Statement, Core Values and Vision of Wheat Growers to the employees. Unifying North Central and Wheat Growers meets those objectives plain and simple. Wheat Growers is a farmer-owned local co-op. I have worked for a large, independent and a regional co-op, and I understand the distinctive differences between them and a locally owned farmer co-op with a local farmer Board. These are two locally owned farmer co-ops that fit together. This adds value by pooling the best people, services and resources together to better serve our customers and pay dividends. I am proud to work for a local co-op with such high ethics and values; I believe these same standards are shared by North Central, and the unification is a good thing.
They apparently saw value in it, and if it makes them stronger, it makes Aberdeen stronger. When you talk to people, you find that people can’t say enough good things about both of those cooperatives. I think this is a good thing for the Aberdeen area.
JAKE BOOMSMA, MEMBER-OWNER
Both these co-ops, as well as the proposed unified co-op, are now and will be completely farmer-owned and farmer-governed. All the profits made by the co-op comes back to the member-owners in three ways: expanded facilities and services, member financial returns through patronage and equity, or building the financial strength of the co-op. I attended an informational meeting, heard the facts and the thinking behind the unification, and I support it. DARRELL DAVIS, MEMBER-OWNER
10
DARIAN BROWNING, LOCATION MANAGER, WHEAT GROWERS REDFIELD
The unification is about keeping the co-ops locally owned for today’s farmers and the next generations to continue their family’s farming legacy. It is also about keeping the decisions local for the co-op and staying relevant in today’s marketplace. For the employees, it will allow for more training in our specialized areas allowing us to better serve you, our member-owners. WALT KAISER, MANAGER, NCFE WARNER
MIKE LEVSEN, ABERDEEN MAYOR
I had the privilege to work for the cooperative system for 35 years. I lived and breathed the joy of working for the people I served. I worked for great, smart-thinking, successful farmers that were elected to serve on the board of directors that always made decisions for the good of all and for the long term. They knew what would be best for the future of their children and grandchildren. KEITH HAINY, ABERDEEN, PAST GENERAL MANAGER, NCFE
QUESTIONS ABOUT
COMPETITION If North Central Farmers Elevator and Wheat Growers unify, will the new cooperative reduce competition? That’s what some member-owners are asking. “Actually, the new, unified cooperative would still be quite small compared to multinational companies in our trade area,” said NCFE Board President Rick Osterday. “Companies like Cargill, ADM and CHS are all 20 to 60 times the size of the proposed new co-op,” he said. Osterday emphasized that CentraGro Cooperative will still be locally governed with the Board elected by fellow farmers who live and farm in the trade area.
“All decisions made by the Board will be based on local knowledge and expertise,” said Osterday. “And all profits generated by the cooperative stay in this area to build or upgrade facilities or will be returned to our owners in the form of patronage.” As the marketplace changes, suppliers prefer to deal with larger customers, Osterday explained. “As a larger cooperative, we will have improved relationships with suppliers, in terms of product availability, quantity and price.” “Unification will not reduce the competition we experience now, but it will make us stronger. The competition will remain and continue to challenge us to be our best,” said Osterday.
STACKING UP AGAINST THE COMPETITION CARGILL
$135 BILLION
Wayzata, Minnesota
ADM
$81 BILLION
Decatur, Illinois
Marubeni/Helena/GaviLOn COLUMBIA GRAIN
$59 BILLION
Tokyo, Japan
Mitsui/UNITED GRAIN
$58 BILLION
Tokyo, Japan
CHS
$43 BILLION
Inver Grove Heights, Minnesota
Agrium/CPS
$16 BILLION
Calgary, Alberta
Wheat Growers & North Central Farmers Elevator
$2 BILLION
The new, locally-owned, unified cooperative will still be many times smaller than the multinational companies and other large competitors in the area. 11
908 Lamont Street South Aberdeen, SD 57401
Wheat Growers
North Central Farmers Elevator
PROPOSED UNIFIED COOPERATIVE
Eldridge
Strasburg
Berlin
TRADE
Hague Oakes
Frederick
83
Pollock
Herreid
McLaughlin
Leola
Hecla Columbia
Java
Langford
Roscoe Ipswich Craven
Andover
Aberdeen Bath & Bowdle Sun Terminal Grebner Mansfield Warner Onaka Northville Wecota Cresbard Lebanon Faulkton
Redfield Carpenter
Tulare
Pierre
Harrold
Willow Lake
Miller St. Lawrence
Wessington Springs Kennebec Reliance
Bristol
Mellette
Rockham
Highmore
TERRITORY
Wolsey
Yale
Huron Alpena
Woonsocket
Chamberlain Kimball Stickney
growingtogether.coop
TOGETHER WHEAT GROWERS AND NORTH CENTRAL FARMERS ELEVATOR
INTRODUCING
CentraGro Cooperative
What do you get when you combine North Central Farmers Elevator and Wheat Growers? CentraGro Cooperative! This is the name of the proposed unified cooperative in which the Unification Agreement was approved by both Boards of Directors. The Unification Agreement will now go to members to vote.
“We’re joining together for strength, shared benefits and to create economic opportunity,” said North Central Farmers Elevator Board President Rick Osterday. The new name literally brings together Centra from North Central Farmers Elevator and Gro from Wheat Growers. It also speaks to the central location of the cooperative and its commitment to growing to serve member-owners today and tomorrow.
“It’s about our location and the legacy of the cooperative system. And it’s about helping farmers grow for generations to come,” said Hal Clemensen, Wheat Growers Board President. To learn more about CentraGro Cooperative, please visit growingtogether.coop.
2
IN HIS OWN WORDS:
As we look to the future of the newly formed cooperative, one of the questions that keeps coming up is how will we measure the success of the new co-op. The first thing that comes to mind would be the savings generated by merging the two co-ops. But really that is only part of the equation that the board and management are looking for. We need to focus on retaining the current customer base of both co-ops, reaching out to customers that currently don’t do business with either co-op, or are doing less business with either co-op than they had in the past, and growing relations with new customers. Another way of measuring success would be employee retention. Building on the strength of the current employee group to attract additional top-notch employees is vital to the success of the co-op. Also, forming and strengthening relationships with business partners that share the same philosophy as the new co-op is also part of the equation of being successful. We need to stay competitive in an ever-changing environment and maintain a strong financial balance sheet for the future of the cooperative. We envision that there will be substantial internal growth that will come to the new co-op. By expanding the energy/petroleum division, aerial application and precision ag to a much larger geographical area, the internal growth will benefit each owner of the new co-op. Later you will read more details on what these services will bring to you.
Mike Nickolas is the General Manager of North Central Farmers Elevator. If the unification is approved, he will become CEO of the new cooperative.
In addition to the internal growth opportunity, we also believe there is a greater opportunity for significant growth on the fringe areas of the new co-op, especially where the existing two co-ops do not compete head to head. Dollars that have been invested in facilities where the two companies compete with each other will now be available for investments and expansions in other areas of the current combined trade territory. While there are no plans of trade territory expansion at this time, we do believe that the new co-op will be watched very closely by other co-ops as to the success of it. The potential for footprint expansion due to the success of the new co-op would be very likely in the future. Growth through relationships will also exist whether it is with other co-ops or within the private industry. The strength of the footprint of the new co-op will allow for the possibility of future supply agreements or marketing arrangements with larger suppliers that could take this new co-op to another level. The ability to source larger quantities of ag inputs or to sell larger volumes of grain will allow for greater return to our member-owners. As you, our member-owners, process the information about the Unification Agreement, you’ll see in even greater detail the synergies and opportunities that the combination of North Central and Wheat Growers can deliver. Both Boards of Directors and management teams have spent the last several months working on the Unification Agreement that brings together the best of both co-ops. I encourage you all to read this newsletter highlighting the key points of the unification. You will also receive a copy of the entire Unification Agreement the week of May 26. Voter Information Meetings have been scheduled, and we invite you to attend a meeting that is nearest to you so we can answer any remaining questions you may have. North Central and Wheat Growers have competed well against each other for many years. And that competition has made us both better and stronger. Now it’s time to bring these two great companies together and go forward with a brand new co-op.
3
As a member-owner of North Central Farmers Elevator or Wheat Growers, you will automatically be included in the voting process. Here’s how it works: • You will receive a voting packet containing: – Mail ballot and envelope for mailing ballot
UNIFICATION VOTE TIMELINE May 27
– Voting instructions and procedures – Unification Agreement, including Articles and Bylaws – Notice of special meeting of members – Schedule of voter information meetings • You will then have the opportunity to attend an informational meeting in your area where you can ask questions and also turn in your ballot. • Mailed ballots must be received by 5:00 p.m. on June 17, 2015.
Unification Agreement, voting process and procedures and ballots mailed to current member-owners. June 1–June 10 Informational meetings for member-owners at locations throughout the trade area. June 17 Ballots due by 5:00 pm at Eide Bailly. June 18
• Independent auditor, Eide Bailly, will receive, verify and count all ballots. • Vote results will be announced at the special meeting of members on June 18.
QUESTIONS ABOUT THE PROPOSED UNIFICATION? Visit growingtogether.coop today! 4
Special meetings of the members at 1:00 p.m. for Wheat Growers and 2:00 p.m. for North Central Farmers Elevator at the Dakota Event Center in Aberdeen. North Central Farmers Elevator and Wheat Growers Boards of Directors meet to review and announce results.
INFORMATIONAL MEETINGS Make plans now to attend the informational meeting nearest you to learn about the Unification Agreement, which includes the Articles of Incorporation and Bylaws and details on the new cooperative. Board members, management team members, Eide Bailly and legal representation will be present at all meetings to answer your questions.
EVERY VOTE
COUNTS!
You may also cast your ballots at these meetings. Only Eide Bailly representatives will be allowed to accept your ballot at the meetings.
MEETING SCHEDULE DATE LOCATION TIME
VENUE
June 1
Huron
9:00 – 10:30 AM
Huron Event Center
June 1
Highmore
1:00 – 2:30 PM
Hyde Co Memorial Auditorium
June 2
Ipswich
9:00 – 10:30 AM
NCFE Corporate Office
June 2
Aberdeen
1:00 – 2:30 PM
Dakota Event Center
June 2
Warner
3:30 – 5:00 PM
Warner Town Hall
June 3
Mellette
10:00 – 11:30 AM
Northwestern High School
June 3
Redfield
1:00 – 2:30 PM
4-H Building
June 4
Bowdle
9:00 – 10:30 AM
Bowdle Community Center
June 4
Faulkton
1:00 – 2:30 PM
Faulkton Community Center
June 5
Chamberlain
10:00 – 11:30 AM
Al’s Oasis
June 5
Willow Lake
3:00 – 4:30 PM
WG Willow Lake Office
June 8
Oakes
10:00 – 11:30 AM
WG Oakes Board Room
June 8
Bristol
2:00 – 3:30 PM
WG Bristol Shop
June 9
Hague
8:00 – 9:30 AM
AmVets Hall
June 9
Herreid
10:30 AM – 12:00 PM
Herreid School Gym
June 9
McLaughlin
1:30 – 3:00 PM (MST)
McLaughlin City Auditorium
June 10
Eldridge
10:00 – 11:30 AM
WG Eldridge Office
We realize it’s a busy time of year, but we encourage you to attend a meeting. These meetings will provide you information that will help you make your decision about the unification.
5
STRONGER TOGETHER With North Central Farmers Elevator and Wheat Growers joining forces as the proposed CentraGro Cooperative, all member-owners will be able to take advantage of additional services, including: • Expanded Precision Ag Services
Precision Ag Specialists work with member-owners to pinpoint the right technology, equipment and field data for your needs and production expectations. We work hard to make sure you get the tools and answers you need to make the most out of every acre.
Services include: – Geo-referenced soil sampling – Yield monitors – Planting and application systems – Mapping software and map printing service – Lightbars – AutoSteer systems
• MZB Precision Farming System
MZB is a high-level proprietary precision farming system. It creates up to 12 management zones based on a combination of Veris EC information, RTK elevation readings and satellite imagery. The geo-referenced crop mapping provides exact nutrient requirements.
• Petroleum
Petroleum and energy specialists’ commitment to personalized customer service helping member-owners make precisely the right energy decisions, instead of just making incidental petroleum choices. NCFE technicians specialize in advanced uptime repair work and service care, ensuring less downtime of vehicles and equipment.
Services include: – Fuel delivery system – Bulk gas, diesel and oil delivery – Bulk Diesel Exhaust Fluid (DEF) – Bulk oil tanks – Cardtrol pumps
6
• Aerial Application Member-owners can choose aerial application through NCFE’s partnership with the following LLCs: – NCFE AIR, LLC – NCFE Custom Air, LLC – NCFE Huron Air, LLC – NCFE Hilltop Air, LLC Based out of Highmore, Harrold, Huron and Clark, the skilled pilot-applicators are available across the trade territory. Taking to the skies is a great compliment to the ground services to better serve customers.
GROWING TOGETHER: PROOF THAT IT WORKS In September of 2000, three organizations embarked on a joint venture to form a new company in Huron. Dakotaland Feeds was started by Wheat Growers, North Central Farmers Elevator and Land O’Lakes. The company operates five mills, manufacturing and/or distributing minerals, pelleted feeds, liquid feeds and ethanol co-products. Here’s what General Manager Jarvis Haugeberg has to say about working with both North Central Farmers Elevator and Wheat Growers.
“As General Manager, I have had a unique vantage point to not only observe the cultures of these two successful local co-ops but to pull from the strengths of both organizations. It seems obvious to me that the proposed merger of these co-ops has the potential to combine the best of both successful organizations on a much larger scale for the good of the members and allow the combined co-op to use that strength to be more competitive for the future. When Dakotaland Feeds was formed there were folks that said the company could not survive with both Wheat Growers and North Central Farmers Elevator as corporate owners. I am happy to say we have not only survived, but we have thrived.” JARVIS HAUGEBERG, GENERAL MANAGER DAKOTALAND FEEDS
7
SAVINGS THROUGH SYNERGY
WILL BE USED FOR:
SAVINGS ON: Purchasing Logistics Energy Insurance
44 Million Dollars CentraGro Cooperative, by unifying Wheat Growers and North Central Farmers Elevator, will achieve an estimated $44,429,000 in savings during the next four years alone!
Increased cash patronage payments Additional agronomy and grain services Improved equipment and facilities New technologies
A projected savings of $44 million over the next four years. These savings will be used to pay $13.6 million in cash patronage and provide additional expertise, services and facility upgrades. We will send your cash patronage check to you within 90 days of closing.
8
10
Ways Unification Helps Everyone
The proposed unification of North Central Farmers Elevator and Wheat Growers offers many advantages to member-owners. However, employees and communities also stand to gain from the unification.
FOR MEMBER-OWNERS
FOR EMPLOYEES 5. Continuing opportunities for top talent 6. Additional employees will be needed; both companies have over 60 full-time job openings 7. Larger size and scale present greater opportunities to advance, multiple career paths and competitive HR programs
1. Increased financial synergies and savings 2. Provide new products, services and additional expertise
FOR COMMUNITIES
3. Strong balance sheet to compete with national and multinational agronomy and grain companies in our territory
8. Operations at all present locations will continue
4. The organization remains locally farmer-owned and farmer-governed
9. Unified cooperative will continue to invest in maintaining and upgrading facilities and expanding opportunities in communities 10. Both cooperatives have a history of supporting communities (FFA, 4-H, schools, local fire departments, community programs, etc.)
To learn more about how the proposed unification benefits everyone, see growingtogether.coop.
GOOD NEWS FOR EMPLOYEES Just as the proposed unification will help member-owners, it will also benefit employees.
“One of our biggest challenges in the
No positions will be eliminated; in fact, there are over 60 full-time job openings between the two companies. Employees will not need to reapply for their jobs, wages will not be reduced and benefits will be enhanced.
past, currently and for the future, is
The new larger, customer-focused cooperative will offer increased career opportunities. Employees will be encouraged to achieve their highest potential through career development, which could include learning new tasks or becoming more skilled in a specialized area.
able to have the size and scale to offer
attracting and retaining top talent at all levels. By bringing North Central and Wheat Growers together, we’ll be greater advancement opportunities for all employees, with multiple career paths and competitive human resources programs.” MIKE NICKOLAS GENERAL MANAGER, NCFE
9
THE TALK OF THE TERRITORY
All around the region, people are talking about the potential unification of North Central Farmers Elevator and Wheat Growers. “It’s exciting that people are taking the time to learn about our plans, ask questions and form opinions,” said Hal Clemensen, Wheat Growers Board President.
MEMBER-OWNERS
EMPLOYEES
COMMUNITY
I not only speak as a past director and president of Wheat Growers, but more importantly as a member-owner of a strong, locally owned cooperative, of which I am proud. I am sure the member-owners of North Central Farmers Elevator feel the same way. All of us are concerned, as equity holders, that our two organizations remain financially strong as well as providing the best of goods and services to our member-owners. And I know from experience, we have the best people and employees with these two organizations in providing those services. We cannot overemphasize the importance of having a locally owned and governed co-op where the profits stay local to support my co-op, my town, and community that is so important to me. That to me is community.
Dale Locken, senior leadership, and our Board have been passionate over the years in emphasizing our Mission Statement, Core Values and Vision of Wheat Growers to the employees. Unifying North Central and Wheat Growers meets those objectives plain and simple. Wheat Growers is a farmer-owned local co-op. I have worked for a large, independent and a regional co-op, and I understand the distinctive differences between them and a locally owned farmer co-op with a local farmer Board. These are two locally owned farmer co-ops that fit together. This adds value by pooling the best people, services and resources together to better serve our customers and pay dividends. I am proud to work for a local co-op with such high ethics and values; I believe these same standards are shared by North Central, and the unification is a good thing.
They apparently saw value in it, and if it makes them stronger, it makes Aberdeen stronger. When you talk to people, you find that people can’t say enough good things about both of those cooperatives. I think this is a good thing for the Aberdeen area.
JAKE BOOMSMA, MEMBER-OWNER
Both these co-ops, as well as the proposed unified co-op, are now and will be completely farmer-owned and farmer-governed. All the profits made by the co-op comes back to the member-owners in three ways: expanded facilities and services, member financial returns through patronage and equity, or building the financial strength of the co-op. I attended an informational meeting, heard the facts and the thinking behind the unification, and I support it. DARRELL DAVIS, MEMBER-OWNER
10
DARIAN BROWNING, LOCATION MANAGER, WHEAT GROWERS REDFIELD
The unification is about keeping the co-ops locally owned for today’s farmers and the next generations to continue their family’s farming legacy. It is also about keeping the decisions local for the co-op and staying relevant in today’s marketplace. For the employees, it will allow for more training in our specialized areas allowing us to better serve you, our member-owners. WALT KAISER, MANAGER, NCFE WARNER
MIKE LEVSEN, ABERDEEN MAYOR
I had the privilege to work for the cooperative system for 35 years. I lived and breathed the joy of working for the people I served. I worked for great, smart-thinking, successful farmers that were elected to serve on the board of directors that always made decisions for the good of all and for the long term. They knew what would be best for the future of their children and grandchildren. KEITH HAINY, ABERDEEN, PAST GENERAL MANAGER, NCFE
QUESTIONS ABOUT
COMPETITION If North Central Farmers Elevator and Wheat Growers unify, will the new cooperative reduce competition? That’s what some member-owners are asking. “Actually, the new, unified cooperative would still be quite small compared to multinational companies in our trade area,” said NCFE Board President Rick Osterday. “Companies like Cargill, ADM and CHS are all 20 to 60 times the size of the proposed new co-op,” he said. Osterday emphasized that CentraGro Cooperative will still be locally governed with the Board elected by fellow farmers who live and farm in the trade area.
“All decisions made by the Board will be based on local knowledge and expertise,” said Osterday. “And all profits generated by the cooperative stay in this area to build or upgrade facilities or will be returned to our owners in the form of patronage.” As the marketplace changes, suppliers prefer to deal with larger customers, Osterday explained. “As a larger cooperative, we will have improved relationships with suppliers, in terms of product availability, quantity and price.” “Unification will not reduce the competition we experience now, but it will make us stronger. The competition will remain and continue to challenge us to be our best,” said Osterday.
STACKING UP AGAINST THE COMPETITION CARGILL
$135 BILLION
Wayzata, Minnesota
ADM
$81 BILLION
Decatur, Illinois
Marubeni/Helena/GaviLOn COLUMBIA GRAIN
$59 BILLION
Tokyo, Japan
Mitsui/UNITED GRAIN
$58 BILLION
Tokyo, Japan
CHS
$43 BILLION
Inver Grove Heights, Minnesota
Agrium/CPS
$16 BILLION
Calgary, Alberta
Wheat Growers & North Central Farmers Elevator
$2 BILLION
The new, locally-owned, unified cooperative will still be many times smaller than the multinational companies and other large competitors in the area. 11
908 Lamont Street South Aberdeen, SD 57401
Wheat Growers
North Central Farmers Elevator
PROPOSED UNIFIED COOPERATIVE
Eldridge
Strasburg
Berlin
TRADE
Hague Oakes
Frederick
83
Pollock
Herreid
McLaughlin
Leola
Hecla Columbia
Java
Langford
Roscoe Ipswich Craven
Andover
Aberdeen Bath & Bowdle Sun Terminal Grebner Mansfield Warner Onaka Northville Wecota Cresbard Lebanon Faulkton
Redfield Carpenter
Tulare
Pierre
Harrold
Willow Lake
Miller St. Lawrence
Wessington Springs Kennebec Reliance
Bristol
Mellette
Rockham
Highmore
TERRITORY
Wolsey
Yale
Huron Alpena
Woonsocket
Chamberlain Kimball Stickney
growingtogether.coop
