RALSTON, IOWA, U.S. — The boards of directors at two of Iowa’s leading farmer-owned cooperatives signed a letter of intent to study the membership benefits of a unification on Aug. 17. The boards of Farmers Cooperative Company (FC), of Ames, Iowa, U.S., and West Central Cooperative of Ralston, Iowa, U.S., have unanimously approved the first step toward a potential unification of the two companies.
“This letter of intent allows us to further explore equity, governance, organizational structure, asset investment and other member-focused efficiencies,” said Sue Tronchetti, a Paton, Iowa, U.S., farmer and chairperson of the West Central board.
Both FC and West Central are profitable companies with strong balance sheets.
“In our first series of discussions, we have identified several opportunities that we believe will benefit our members today and for decades to come,” said John Scott, an Odebolt, Iowa, U.S., farmer and president of the FC board of directors.
“Our early discussions highlight opportunities to improve productivity by sharing resources to better deploy assets like application equipment, rail access and truck logistics,” said FC chief executive officer (CEO), Jim Chism. “Being more effective in our execution would reduce costs and allow us to better serve customers.”
Each organization has unique strengths, said West Central president and CEO, Milan Kucerak.
“For example, FC has access to every major rail line in Iowa and West Central has built-in soybean demand for 20 million bushels annually at our SoyPlus manufacturing plant.”
Kucerak said combined the cooperatives could strategically channel capital to target larger, more substantial investments.
In coming weeks, the companies will host a series of employee and member meetings and conduct due diligence. Then, the boards will determine whether to take the unification proposal to a membership vote. Should the process move to a membership vote, both FC members and West Central members would vote.
Board chairs Scott and Tronchetti urged members to participate in member meetings during the due diligence phase to share feedback and concerns with management and the board.