LANDUS: A merger of equals

Nation’s seventh-largest grain company

-Submitted photo

Farnhamville is home to the nation’s largest farmer-owned cooperative research plot. The Farnhamville research plot is an outdoor agronomic proving ground where Landus Cooperative’s field sales agronomists, applicators and precision team members conduct crop production demonstrations. This site is critical in demonstrating and evaluating specific, real-time crop production inputs to determine their potential return per acre on the farms of Landus Cooperative members/customers.

-Submitted photo Farnhamville is home to the nation’s largest farmer-owned cooperative research plot. The Farnhamville research plot is an outdoor agronomic proving ground where Landus Cooperative’s field sales agronomists, applicators and precision team members conduct crop production demonstrations. This site is critical in demonstrating and evaluating specific, real-time crop production inputs to determine their potential return per acre on the farms of Landus Cooperative members/customers.

AMES — Two well-known cooperatives officially became one on April 1, 2016.

West Central Cooperative and Farmers Cooperative Company merged last spring after a majority vote was met by both cooperatives’ memberships to form LANDUS Cooperative, making it the seventh-largest grain company in North America based on storage capacity.

Milan Kucerak, chief executive officer for LANDUS Cooperative, said although most cooperatives seem to have mergers done by an acquisition of a weaker cooperative, that was not the case with this particular merger.

“It was truly a merger of equals, which is unique,” said Kucerak.

The merger of West Central and FC was done with both companies having strong balance sheets, storage and capital and each company brought strengths and benefits to each other.

-Submitted graphic
A graphic shows what a new expansion will look like.

-Submitted graphic A graphic shows what a new expansion will look like.

By strategically placing capital, Kucerak said they have been successful combining forces of what each cooperative possessed.

Kucerak added in order to achieve the high approval rate from the membership’s votes, it was a significant hurdle, which included holding several membership informational meetings to help show their members all of the benefits involved with the merger.

Competitive advantage

A large benefit to the merger, Kucerak said is now LANDUS Cooperative is on all seven major rail lines.

“That gives us a real competitive advantage,” he said.

-Submitted photo

A LANDUS Cooperative member reviews the cooperative’s financials at its inaugural annual meeting in December. That annual report stated, “In merging two equal, yet financially-underperforming cooperatives, LANDUS Cooperative’s year-end results were unsurprising. While our profits were below goal we made great strides toward achieving the financial synergies outlined in our merger campaign process, in our first year as a new entity.”

-Submitted photo A LANDUS Cooperative member reviews the cooperative’s financials at its inaugural annual meeting in December. That annual report stated, “In merging two equal, yet financially-underperforming cooperatives, LANDUS Cooperative’s year-end results were unsurprising. While our profits were below goal we made great strides toward achieving the financial synergies outlined in our merger campaign process, in our first year as a new entity.”

Relationships with major suppliers has also been in the works this year, Kucerak said, which has been made possible due to the merger, making them a large enough cooperative to where LANDUS Cooperative is attractive enough for those relationships to happen.

“This will help us get the most for our customers and our business,” he said. “With our larger size, I am surprised by the relevance we have made on the market.”

There have been a lot of positives that has come with building LANDUS Cooperative, Kucerak said, and one of those being the merging of the board of directors, members and employees.

“The boards merged very well,” he said. “They are functioning and getting along very well.

“Both employees and members want us to succeed and I am pleasantly surprised for as well as it is going.”

Kucerak said there were some changes in management, but LANDUS Cooperative is featuring some strong leadership and the rest of the staff has risen to the challenge.

As smoothly as the transition has gone, Kucerak said it has come with decisions that were hard to make.

Hard changes

Kucerak said they had to make the decision to close some of the smaller locations throughout the large area that LANDUS Cooperative covers — Callender and Lohrville, which were formerly FC.

“We looked at it as an efficiency issue and we can still service those customers in those areas,” said Kucerak. “It was a hard decision, but it was done strategically.

“We did not take this lightly.”

These locations have stronger, larger sites within five or six miles, Kucerak said, guaranteeing service for Callender and Lohrville customers.

Coming this summer, Kucerak said the billing for all of the agronomy, grain and feed systems should be combined and, in addition to system upgrades, all locations have been looked over and will start upgrades and repairs as needed, as well to meet any safety compliance issues and to achieve overall top efficiency.

“We are looking at what makes sense to us and where to expand,” said Kucerak. “Looking at those markets where do we upgrade and what will best service our membership base.”

LANDUS Cooperative’s strategic planning team does a complete return on investment analysis and those findings are presented to the board of directors each month. This helps to ensure the proper decision is made that it has the cooperative’s best interests in mind.

Currently, Kucerak said LANDUS Cooperative has several smaller projects going on including an expansion of the anhydrous ammonia storage capacity at their Bradford location and new mass flow meters will be installed in Farnhamville and Yetter. These meters, he said, will allow for a more precise and faster load of chemicals and should allow for an additional 750 acres a day of application.

“We are trying to be as efficient as we can to better serve our members,” he said.

Kucerak said he is always ready to listen to members.

“Milan makes himself available to his membership,” said Alicia Huen, director of communications for LANDUS Cooperative. “He feels it is very important they reach out to him and rest of the management team.”

Kucerak said he can be reached at (515) 370 4298 and by providing his personal cell phone number he feels that is a way to help make LANDUS succeed.

“I have received a lot of positive calls, and some negative, but I welcome all of that feedback,” he said. “We have to have that support, interest and opportunities, and that excites me, so call if you have ideas, I care and it shows me our membership cares.”

Expansion complete

A large expansion to the company’s SoyPlus manufacturing plant was complete last fall, which increased the plant’s capacity by an additional 50 percent.

SoyPlus is one of the products made in the Dairy Nutrition Plus family of products manufactured by LANDUS. This expansion created 11 new full-time jobs; will crush 20 million bushels of soybeans annually; produce 575,000 tons of SoyPlus and feed 1 million dairy cows for a year.

One of LANDUS Cooperative’s specialties is their grain market advisory team. The team, led by Tom Guinan, vice president of producer grain marketing for the cooperative, is made up of 12 grain marketing advisors that are spread throughout the company’s location.

“Tom has a great understanding of the market and we have been seeing some success stories from our members using the help from the grain market advisory team,” said Kucerak.

“We have a dozen grain contacts available and our grain marketing advisors are there to help work through selling options with our growers,” said Huen.

Kucerak said the grain marketing advisor positions, is a “specialty position,” much like an agronomist.

“We have agronomists to help you grow the crop and this team to help you sell it,” said Kucerak.

Another benefit to the co-op’s membership is the Farnhamville research plot.

The 184-acre test plot is believed to be the largest single-area plot of research by grain cooperatives in the country. In addition to that, the company has research being conducted on nearly 90 plots spread throughout 25 counties in the state.

Kucerak said the results of these plots are published and available free to producers.

LANDUS is comprised of 65 customer locations in 26 counties; employs nearly 700 employees both full-time and part-time,and is supported by more than 7,000 members.

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