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United Farmers Cooperative’s (UFC) member/owners have votd to approve a merger with NEW Cooperative, Inc. (NEW) of Fort Dodge.
Farmers United Coop has a location in both Mount Ayr and Diagonal.
All UFC locations and services will join with NEW Cooperative effective Sept. 1.
To approve the merger, Iowa law requires at least 50 percent (plus one) of UFC’s Class A membership to vote, with at least two-thirds of those casting ballots voting in favor of the merger.
Voting ceased on Friday, June 2 with the ballot count occurring Monday.
The Class A member vote comes after extensive meetings between both cooperatives’ boards of directors and leadership staff. Following a merger study of both organizations, UFC’s Board of Directors approved recommending a merger with NEW to UFC’s membership and putting the merger to the Class A membership for a vote.
“NEW Cooperative’s cash dividends are historically more than double ours, they are only six years back on their deferred equity, and their service and facilities are second to none in Iowa. A lot of this is accomplished from efficiencies in size and buying power,” states UFC Board President, Will Larson of Diagonal. “Although we may seem like a large company, compared to the multi-national companies we are competing against, we are not. In order for us to continue to keep these large private companies from taking control of our industry, I think we need to join together with other farmers and merge co-ops.”
Formed in 1973, NEW Cooperative, Inc. is a farmer-owned grain, agronomy, energy and feed cooperative headquartered in Fort Dodge.
As a leading agriculture retailer, NEW (acronym for Northeast Webster) Cooperative is focused on being an innovative and efficient provider of today’s agriculture markets and services to 8,000 members throughout their 60 locations in Iowa.
United Farmers Cooperative, established in 2016, is a full-service, farmer-owned cooperative, serving agricultural producers and businesses across Southwest/South Central Iowa and Northwest Missouri.
UFC provides it’s 3,600 members with agronomy, energy, retail feed, commercial feed, lumber and hardware, automotive, and rural retail services and products at 28 locations.
“This opportunity provides for our combined 275 million bushels to be marketed on Iowa’s major rail lines, barge loading at the Port of Blencoe, over 30 ethanol plants and soy crush facilities, and through a combined internal consumption of over 60 million bushels of corn through our feed manufacturing efforts, bringing back to the member the best value for the grain you deliver,” said Dan Dix, General Manager of NEW Cooperative.
UFC’s General Manager, John Pruss, said the unification was necessary to meet the production needs of Southern Iowa’s farmers and rural economy, especially for the future.
“As UFC continues to review its long-term capital needs budget, we believe that an accelerated budget is necessary to best serve our members. To accomplish this, UFC needs to increase its profitability in a very competitive market by leveraging our position in the marketplace. This requires more tools than we currently have. In the grain market, one railroad is better than no railroad, seven railroads is better than one. When it comes to input market access, volumes and relationships are extremely valuable for purchasing products.”
“When we explored the opportunity of growing with another cooperative partner, NEW rose to the top of the list,” Pruss said. “Both companies are very similar in our sales and income portfolio. We are both committed to the employees of our companies, adding value back to their members, and to looking to the future.”
UFC’s voting members learned more about NEW Cooperative’s history, structure, and business model at a series of member meetings held across UFC’s territory.
NEW’s Board of Directors will expand to a total of 15, with the addition of two directors and one associate board member to be appointed by the UFC Board.