Cooperative Model Relevant Today

In light of Cooperative Month, SD Farmers Union decided to check in and see how things are going for Agtegra, since the February 2018 unification of two legacy-rich, farmer-owned cooperatives – South Dakota Wheat Growers and North Central Farmers Elevator.

The cooperative model is proving itself during these tough times in agriculture, says Board President Hal Clemensen.

“There are definite savings that come from not duplicating services. Going into the merger, we knew the farming economy was tough. This was one reason we felt so strongly the merger had to happen,” Clemensen explains of the CEO Chris Pearson agrees, “As we think about the ability of our cooperative to deal with tariffs, use space wisely and serve farmers going into harvest, we are better able to serve as Agtegra than we would have been alone.”

To ensure better service through the massive undertaking of merging two cooperatives, the board and employee leadership put together 13 teams to strategically analyze and unify. “We really made a conscious effort to try and take the best of both cooperatives when we put Agtegra together,” Clemensen explains. “And, because we are a new cooperative, we are not tied to old ways that may not work for our patrons anymore. It’s refreshing to be able to make changes, like making basis more beneficial for producers because we are not locked into old ways of either cooperative.”

For example, Agtegra has improved market power, explains Mike Nickolas, Executive Vice President of Grain. “By pooling our bushels together and offering larger amounts to export facilities or domestic flour mills, we’re able to secure a little better price than we would have as separate cooperatives.”

Pearson adds that this spring’s fertilizer season also highlighted synergies. “If inventories got tight in one location or if there was a facility breakdown, we were able to shift over to a different facility and share equipment and people across all facilities to support our farmers. Throughout the growing season we’ve seen similar synergies and we expect these to increase over time.”

Only six months in, Clemensen says that although there are areas where Agtegra has room for improvement, he is excited for the future. “We are able to serve farmers more efficiently, building a better cooperative today and also maintaining a strong cooperative for future farmers, farmers’ kids and farmers’ grandkids.”

Pearson says Agtegra Cooperative is a good example of the value of the cooperative system.

“In my mind, it’s all about the expectations of our ownership – that is why the co-op system is strong today and should stay strong for generations to come. Farmers should own the retail system they do business with. Because of farmer ownership, cooperatives make decisions that over the long-term return benefits to farmers, not a quarterly earnings call or group of investors from New York City,” Pearson explains.

To learn more about Agtegra Cooperative, visit www.Agtegra.com.

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