by Todd Neeley DTN Staff Reporter
OMAHA (DTN) — The members of two large farmer cooperatives headquartered in South Dakota voted against unification Thursday, just three months after the cooperatives signed letters of intent to merge.
“The two cooperatives will continue serving their respective members as separate entities,” North Central Farmers Elevator said in a news release Thursday.
“South Dakota law requires that a majority of eligible members of each cooperative vote in favor of a unification agreement before the unification can go into effect. The final vote, as certified by auditing firm Eide Bailly, fell short,” the release stated.
A spokesperson for North Central Farmers Elevator did not immediately respond to DTN's request for additional details.
The merger would have combined more than 30 Wheat Growers locations with 24 North Central locations. The new cooperative would have been named CentraGro, covering a territory stretching from central North Dakota to southern South Dakota. The dominant coverage area would have been the central strip of South Dakota running east and west of Highway 281.
South Dakota Wheat Growers Association is ranked as the 11th-largest cooperative by USDA based on 2013 revenues of $2.1 billion. North Central Farmers Elevator is ranked as the 40th-largest cooperative in the country with about $906 million in revenue in 2013. Based on those 2013 figures, the combined cooperative would have been somewhere in the top eight largest cooperatives in the country.
As of Thursday afternoon, no further information about the vote was made available to the media. According to the North Central Farmers Elevator website, the cooperative held a member meeting in Aberdeen, South Dakota, on Thursday.
In a story posted May 20, DTN quoted Stephen Briggs, senior vice president of agronomy and corporate marketing for Wheat Growers, as saying critics of the proposed merger were not considering the growing competition the cooperatives face from various grain companies in both North and South Dakota. Briggs pointed to facilities owned by Cargill, ADM, Gavilon, as well as the Japanese firm Mitsui and Co., which have all more aggressively built elevators and locations in recent years.
Briggs said there are 174 competitors in the trade area selling seed, fertilizer and chemicals.
The merger was estimated to save $44.4 million for farmers in four years, he said, just by avoiding duplication.
Read more about the proposed merger here: http://tinyurl.com/…
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