Keeping It Local

Merger Creates a Stronger Coop

Merging coops has become part of the changing ag economy landscape. No longer are cooperatives defined by geographical borders, instead, they look to become part of the global marketplace that is sure to keep expanding as populations increase. For Paul Amsbaugh, chairman of the board of Bottineau Farmer’s Elevator and Kelly Thorenson, chairman of the board of Souris River Grain, the merger of their two coops was more than just a name change.

“Neither coop was large enough to survive on its own. We both had good, strong balance sheets; but I also think we both realized that we had to do something so that we could remain locally owned,” Paul says. “with commodity prices down and the farm economy being sluggish, everyone looks for the highest price at the end gate,” continues Paul who is in his fourth year as chairman of the BFE board. “Of course the coop still pays dividends at the end of the year, but when times are tight everyone looks for the highest price.”

Paul is a third generation farmer, and his family started doing business with Bottineau Farmer’s Elevator in 1934. Coops were then, and are today, the backbone of the community. But now these coops find themselves competing with out-of- state, or even out-of-country companies. “Our competition is our cell phone with grain quotes coming from a variety of sources. We looked at competition and it is in our backyard,” continues Paul “the merger means we had access to two different rail sources and more competitive shipping costs.”

It isn’t hard to look around and see the capital improvements that both coops continued to make in area communities. “We put two million dollars into the Westhope facility and built several bins in Souris because the farmers in that area needed the extra capacity. We built the new fertilizer plant in Bottineau and then added the two new bins and a dryer. We understand that the heart and soul of a small town is the farm economy, so we do what it takes to keep it strong.” says Paul. He is quick to point out that in a normal merger one company comes in with a strong balance sheet, while the other company is in a weaker position. “But that isn’t true here,” says Paul, “It would be true to say that competition forced the merger, but we did it to remain strong and competitive. Our coop has continued to grow and return equity to the farmers- the ones who own the company. We have paid out dividends. We hope to be able to continue to do that.”

Merger Means More Resources for Members

For Souris River Grain, the merger means a collaboration of resources. “We felt pretty small, even after the merger of Russell and Kramer to form Souris River Grain,” says Kelly Thorenson, Chairman of the SRC board. Kelly is a fourth generation farmer. “I can remember that my Dad was on the board of directors of the coop, and I am pretty sure that my grandfather was, too.” When talking about the merger, Kelly is quick to assure members that we will still both be local coops, and we will continue to be controlled by their members.” As Paul pointed out, the merger gives common access to two rail lines, and along with that the ability to have several facilities in case they are needed during harvest. Burlington Northern is more flexible, but CP Rail is cheaper, so the two coops are now able to negotiate for better and hopefully cheaper, rail service. “We used to get full in Russell, and be at the mercy of the railroads as to when cars would arrive. Now we will be able to shift grain, which will make us more competitive. We need to be more efficient to compete with new and existing competition” says Kelly. Even though the merger will almost double the number of patrons in the new coop, Border Ag & Energy, “We are still smaller than the competition, but combining balance sheets gives us the ability to do bigger projects, and serve our members even better,” Kelly continues.

A Look Ahead

Both Paul and Kelly say that their patrons are excited about the merger. Members are not expected to see much difference in how the coops are operated and continue to be part of the communities they serve.

There is also a possibility of another large loading facility being built near Lansford. “CHS is talking about the Greenfield site just east of Lansford. For us, it doesn’t make sense for them to build just a few miles from our terminal in Lansford,” says Paul.

Border Ag & Energy

Come September 1, Border Ag & Energy will become a vibrant, well-managed coop, ready to serve it’s members well, and adapt to the ever-changing global marketplace. “Our coops mirror each other,” according to Paul. “We had 85 percent acceptance of the merger,” adds Kelly. It all adds up to a strong local cooperative.