The farmer’s co-op: an old idea – not left behind by time

Earlier this week I visited the head office of CHS Inc. in Minneapolis, which is the big agribusiness cooperative that used to be known as Cenex Harvest States.

It’s a major grain handler in the northern plains, has grain and input operations across the U.S., operates oil marketing, refining and distribution facilities, processes, manufactures and processes foods for the retail food trade, and exports grains and food products around the world. It also operates in Brazil, Europe, Singapore and elsewhere. It’s a farmer-owned and controlled company that has gone from humble roots as a bunch of small cooperatives to becoming a significant player in today’s North American grain and farm supply business.

In summary: it’s what Saskatchewan Wheat Pool tried (and failed) to become in the 1990s and 2000s.

I was struck by how much CHS felt like Sask Pool in the good old days, when it seemed a vital, growing, farmer-based organization. It had a very comforting, down to earth feel about it, combined with a feeling that it was an organization that knew what would work with farmers, what would work in today’s business and energy industries, and how to connect those two to keep both the farmer-owners and the business happy.

I’ll have stories about CHS in next week’s paper, and I’m running off to the World Pork Expo here in Des Moines in a few minutes, so I won’t write much here today about the practical grain elevator and logistics stuff I talked about with people there, but just thought I would note how nice it was to get back to that good old Sask Pool feel again – something I’d almost forgotten.

I’m not pro-coop or anti-coop, or pro-private or anti-private, or pro-publicly-traded or anti-publicly-traded, but grain elevator cooperatives were a massive part of prairie agriculture until just a few years ago, and their loss was a huge blow to thousands of farmers who had placed big hopes in the cooperative venture and saw it as key to farmer influence, control and maybe most importantly – service to farmers – on the prairies.

It was sad when the pools disappeared (most people would agree it was their own faults through some very poor decisions and some bad luck) and maybe we’ve all come to assume they had their day and were left behind by the march of history.

But down in Minneapolis I saw living evidence that that old structure, that old idea, that old style of working for farmers while actively moving into new areas of the agriculture and farm economy isn’t necessarily a mere memory or a relic of history.

 

About the author

Ed White — Ed White has specialized in markets coverage since 2001 and has achieved the Derivatives Market Specialist (DMS) designation with the Canadian Securities Institute.

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