ProAg gains rail access with Hoffman merger
A merger with the Hoffman Cooperative Grain Association will provide the ProAg Farmers Cooperative its first facility with rail access.
Danny Pinske and Mark Jaskowiak said the merger is a win-win for all involved.
Pinske, who is the manager of the Hoffman grain elevator, said roughly six months ago, the two entities started looking at their numbers to see if the merger would be beneficial.
Jaskowiak, the general manager of ProAg, said the Hoffman elevator needed to get more bushels of grain and that ProAg had the inventory.
"We are excited about this and the Hoffman elevator will be a great addition for ProAg," Jaskowiak said. "It is going to help our customers out."
On Jan. 1, 2018, ProAg will officially acquire the grain elevator in Hoffman, making it the co-op's 10th location and first in Grant County. The other locations are Douglas, Otter Tail and Todd counties.
In order for the merger to happen, Pinske said the current members of the Hoffman cooperative had to vote and that 88.4 percent voted in favor of the merger.
"It was a pretty strong majority vote," he said, noting that one important factor that the members needed to know was that the merger was not a buyout.
"That is really important to know; that this is not a buyout," stressed Pinske. "This will put us in the position to be a market leader and more than double our amount of grain. There are mutual benefits for both sides. They need to get rid of it (their grain) and we need more of it. It truly is a win-win for all involved."
Jaskowiak said that currently, ProAg is a truck-only market and that the Hoffman elevator has a 110-car unit train loading facility on the Canadian Pacific rail. The Hoffman facility can store approximately 2.8 million bushels. With the large yields the past couple of years and the large volume of grain coming into the facilities, Jaskowiak said it was necessary to access the railroad.
After the acquisition, the Hoffman elevator should be able to handle double the amount of grain because it will be able to fill a 110-car unit train twice per month instead of just once.
What this means for the nearly 1,500 members of the co-op, Jaskowiak said, is that the grain prices should improve and that it would free up room at the other ProAg facilities because grain will be trucked to the Hoffman elevator before being shipped by rail.
"We will be able to move grain out of the Brandon and Parkers Prairie locations more quickly instead of letting it sit while we wait for a better market," said Jaskowiak. "The whole process will flow better and be more efficient."
Pinske said some of the details are still in the process of being worked out, but that he is happy about the merger and as of Jan. 1, everything will be worked out.
The major products and services handled by the cooperative include bulk fertilizer blending and application, crop protection products and application, seed sales, bulk and bag feed manufacturing, sales and delivery, grain storage/marketing, milk marketing, propane and bulk fuel delivery.
A look back
Jan. 1, 1998: ProAg Farmers Cooperative was formed through a merger of two long-established cooperatives — the Miltona Creamery Association, organized in 1919, and Urbank Cooperative Creamery Association, organized in 1929. The merger formed a large cooperative to meet the needs of its members in a rapidly changing crop and livestock farming environment. It included offices in Alexandria, Brandon, Garfield, Henning, Parkers Prairie and Urbank.
Jan. 1, 2013: ProAg merged with Central Ag Services, which brought locations in Clarissa and Eagle Bend. This merger allowed Pro-Ag to continue to grow and serve the needs of its members.
Jan. 1, 2015: ProAg merged with the Farmers Co-op Feed Store in Browerville. Browerville was the co-op's ninth location.
As of Jan. 1 2018: ProAg will have 10 facilities — Alexandria, Brandon, Browerville, Clarissa, Eagle Bend, Garfield, Henning, Hoffman, Parkers Prairie and Urbank. Pro-Ag has several divisions, including agronomy, feed, grain, milk, petroleum, seed and the Country Store.
What is a cooperative?
A cooperative is a business owned, collectively, by its members who share the benefits. The co-op's purpose is to provide its customers with a product, marketing assistance and services. While cooperatives have much in common with other businesses, there are some differences. Profits, which in the industry are known as savings or money left over each year after the costs of business needs are met, are returned to the customer. At least 20 percent of these savings are returned in cash and the balance returned in stock certificates. Stock certificates are cashed in later, depending upon the co-op's policies and available funds. Cooperatives operate on a one-member, one-vote policy. ProAg is governed by a nine-member board.