kingsley prepares for fca merger vote prepares for fca merger vote spring 2016 inside: “first in...
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There’s a saying, “Life is change. Growth is optional. Choose wisely.” When I think of the many changes and wise choices that have helped First Cooperative Association (FCA) grow in the last few years, I know we’re not yet done.
In 2015, your cooperative acquired the grain and agronomy businesses of Sands of Iowa in Marcus. We’re now preparing for the next opportunity—Farmers Cooperative Elevator in Kingsley. This one-location cooperative is a $50-million company with a very strong balance sheet. They focus on grain and agronomy and have limited feed services, along with a cardtrol and c-store.
After several months of discussions and analysis, the directors of both cooperatives have agreed to combine the companies. Kingsley’s members are now preparing to vote in late March. We recently mailed our members a letter explaining the de-tails. Kingsley will need to have 50% of its members vote, and a two-thirds majority is needed to approve the unification.
While FCA members will not vote, FCA will be the controlling entity in this
unification—should the Kingsley members approve the merger. The proposed effective date of the unification is July 1, 2016.
What does this mean for FCA?This proposed merger will benefit both the Kingsley members and FCA members. Just like you need economies of scale in your farming operation to remain competitive, a cooperative needs to be a certain size to maximize efficiencies. Unifying with Kingsley will create value for you through improved savings, expanded services and facilities, and accelerated equity payout.
We’ll be able to expand our bulk delivery of liquid propane (LP) and refined fuel by providing these services to folks in the Kingsley area. As we work with more
gallons, bushels and tons in all divisions, we’ll be able to run your cooperative more cost effectively and efficiently.
We will offer all existing Kingsley co-op employees positions within FCA. As we grow in the Kingsley area, we’ll need all the current team members, plus more. Be-coming a larger cooperative will also make it easier for FCA to provide the compensa-tion, benefits packages and modern equip-ment that helps your cooperative attract and retain the best talent.
Kingsley Prepares for FCA Merger Vote
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“ F I R S T I N M A R K E T I N G , S E RV I C E , A N D S U P P L I E S T O I M P R O V E M E M B E R S ’ P R O F I TA B I L I TY.”
Ida Grove Offers Feed Store and More
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Be Ready to SellPage 4
Johnson's Ag Roots Run Deep
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Distract ions Abound, Stay Focused
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MANAGER’S CORNERBy Jim Carlson
General Manager
F I R S T C O O P E R AT I V EA S S O C I AT I O N
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©2016 First Cooperative Association. All Rights Reserved. Published in partnership with VistaComm® (www.VistaComm.com).
FCA and Kingsley aren’t the only ag cooperatives in merger negotiations. It’s a trend occurring across Iowa and beyond. There are projections that Iowa will be down to 20 agricultural cooperatives in the next 10 years.
Time will tell whether that proves true, but one thing is certain. FCA will continue to look for ways to remain a strong cooperative that can meet tomor-row’s challenges in agriculture while improving our members’ profitability. We appreciate your support and will keep you updated as the proposed merger with Kingsley moves forward. ◗
Kingsley PreparesContinued from page 1
Ida Grove Offers a Feed Store and More
It may seem like an unassuming place, but FCA's feed store in Ida Grove is a hub of the local ag community. It’s also a valuable resource for livestock producers throughout the area, just as it has been for nearly 60 years.
“I like agriculture because it’s always changing, and there’s always something new,” said Rand Whitney, an Ida Grove native who manages the location and carries on a family tradition started by his father, Clay. “You have to adapt to stay competitive.”
The Ida Grove feed location reflects decades of innovation and adaptation, including:
1958 Clay Whitney and Wilbur Hauschlidt opened the Ida Grove Chick & Feed Store. The two men promoted Purina feed, worked with the Sac City Hatchery, and sold 60,000 to 70,000 chicks per year.
1968 Not only did the business change its name to H & W Feed Headquarters, but Whitney and Hauschlidt also began focus-ing on cattle and hog feed. In this era, the
While you’re thinking about plant-ing, I’m thinking about all the things you can take care of now to make your spring work go off without a hitch. This includes ev-erything to do with fuel to filters.
Remember that FCA has a complete line of equipment to meet all these energy needs, plus we carry diesel exhaust fluid (DEF). Count on us for container sizes from 2.5 gallons to 55-gallon drums or totes capable of
handling 330 gallons. We also carry a variety of pumping equip-ment to meet your needs.
In addition, we offer a wide selection of filters. It’s important to make sure you’re using the correct filter for the job, espe-cially in today’s world of low-micron filtering of fuel.
Since you like to have options, we work with multiple vendors to supply a variety of storage tanks and pumping equipment for diesel and refined fuels. I’m ready to help you customize a system to meet your needs.
If you have any questions related to fuel, filters, lubricants or any other energy needs, call me at 712-229-2880. I look for-ward to working with you. ◗
Spring Ahead to Evaluate Your Fuel Needs
By Marty Lau
Certified Energy Specialist
Top photo: The feed store in Ida Grove used to partner with the Sac City Hatchery. Wilbur Hauschlidt (center) is shown here, with a bag of Purina feed to his right.
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Ida Grove Offers a Feed Store and More
company shipped more than 7,500 tons of Purina feed per year.
1985 The name of the business changed again, this time to Feed Headquarters. Hubbard Feeds was added to the product line-up. Clay Whitney’s sons, Rand and Rory, took over ownership of the business.
1995 Feed Headquarters joined with the Holstein Cooperative Elevator, with all feed milling handled at Holstein. “We were a small retail business until 1995,” said Whitney, who noted that Ida Grove location had about eight employees at this time and hauled its own feed. “As the livestock industry changed, we were long on feed and short on grain, while Holstein was short on feed and long on grain, so working together made sense."
2000 The business merged with Galva Holstein Ag LLC and closed its grain handling operation.
2012 The feed division in Ida Grove merged with FCA. Rand Whitney continued to manage this location.
Feed store stays busy all day While much has changed through the years, some things stay pretty much the same at the feed store in Ida Grove. Soon after the store opens at 7 a.m., the first round of the morning coffee crowd arrives, followed
by a second group around 8:30 a.m. Sometimes 15-20 farmers gather at the long tables between the warehouse and office.
“The morning coffee crowd is the kind of place where you can learn just about anything, but you can’t teach anyone anything,” noted a Farm News article from a few years back that described the group.
After the coffee guys head home, Whitney stays busy throughout the day—especially in the late afternoon when the last group of customers stops by before the store closes at 5 p.m. Whitney not only handles all the day-to-day tasks at the feed store, but he helps FCA connect pork producers with those who want to rent swine facilities.
While the feed store is essentially a one-man shop, Karen Baumann handles the bookkeeping. Whitney also appreciates the many loyal customers who support the business, whether they purchase feed or fill up with E85 at the cardtrol just east of the office.
“I enjoy working with producers,” Whitney said. “It has been good to be part of FCA these last few years.”
To contact Whitney at FCA’s Ida Grove location, call 888-856-1377 or 712-364-3191. ◗
Rand Whitney (shown above), who manages the feed store in Ida Grove, carries on a family legacy that dates back to 1958. He enjoys helping livestock producers find the right solutions for their operations.
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If three is a crowd, that is certainly true as three big factors hinder the grain market:
1. There are no production problems in the world. South America had a good crop this winter and so did many other grain-growing regions of the world in the past year.
2. The world grain supply is more than adequate. There’s a lot of corn, beans and wheat available. We found out we can overproduce any time the price is right. With the huge supply of grain on hand, end users can’t consume enough.
3. The world economy is holding us back. Europe’s economy isn’t stellar, and neither is the Asian economy. China’s economy has slowed down a lot, plus China has excessive amounts of corn and is
totally out of the market. Also, their “concerns” about GMOs last year were obviously a charade, since a Chinese company (ChemChina) recently bought Syngenta.
Speaking of things that come in threes, we’ve had three good crops in a row. It would be unusual to have a fourth, but it’s possible—much will depend on El Niño. It appears that El Niño is ending, but climatolo-gists don’t agree on how fast this is occurring.
Depending on what happens next with El Niño—whether it transitions into a La Niña or simply fades away—our area could face hot, dry conditions starting in June, or we might not have any of these challenges. We’ll have to wait and see. One thing that seems rather clear is we’ll likely have a cold, wet spring, which is generally not good for crops.
With corn prices in the doldrums, it’s also clear more crop acres are shifting into Conservation Reserve Pro-gram (CRP) acres. We don’t know how much this will
Be Ready to Sell Between Now and June
HEDGER’S HEADLINES By Randy Dunn
Grain Manager
It’s Time to Hold Off
How much did you spend the last time you filled your fuel tank? With crude oil prices at a 12-year low, it makes you wonder how much lower prices can go.
There are ample supplies of crude oil due to elevat-ed production in Saudi Arabia, record production in Russia and abundant supplies in the United States. America has nearly doubled its domestic crude oil output since 2008, turning long-standing global sup-ply/demand assumptions upside down.
Abundant supplies have led to one of the largest crude oil declines in history. From 2014-2016, the price plunged 75 percent, compared to a 68-percent de-cline in 2008-2009—the second biggest drop in recent history. As of press time, there’s not much that might change the global fundamentals. Currently, there are
half a billion barrels of crude oil in storage, plus there’s plenty of gasoline and diesel fuel stowed away.
Is $20-per-barrel crude possible? Oil ministers from Russia, Saudi Arabia and Venezuela met in mid-February and agreed to freeze oil production at January 2016 levels if other major oil-producing countries agree to do the same. While this drove the market up briefly, the market dropped just as quickly. Overall, the reaction was, “So what?”
As of press time, crude oil was back down below $29 a barrel. How low can it go? I remember when the “experts” said oil could never go below $20 or $15, but the price dipped to $10. This time around, if prices break $26, it’s likely they could drop to $20. Major banks are pre-dicting $20 barrels of crude in the weeks ahead.
PETROLEUM REPORTBy Jim Bieber
Energy Manager
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impact the markets, but it would appear we need to lose several million corn acres across the Corn Belt to make much of a dent in grain prices.
Keep an eye on some key price pointsCorn insurance remains an important part of grain mar-keting. With significantly lower averages for corn and soybeans this February, spring crop insurance prices are sure to decline. The average for February 2015 corn was $4.15 and $9.73 for soybeans. By mid-February this year, the market was 33 cents below December’s corn price and 82 cents below on beans.
We do have free price-later, so farmers have been moving some grain this winter, although they haven’t necessarily been selling it. In years like this, the best selling opportunities are likely to occur between now and the end of May.
If too many farmers hang onto grain, July and August could be ugly. Don’t be the last one to sell your grain. Since the cash corn price has hovered between $3.10
and $3.40 and soybeans have been around the $8 to $8.40 range, look to sell anywhere near the top of those figures.
If you have questions about grain marketing, contact me at 877-753-5400 to discuss practical strategies. Also, check out our grain updates at firstcoop.com. We appreciate your business. ◗
Much of the decline in crude oil pric-es has been tied to turmoil in the
stock market. This has been influ-enced by the major slowdown in
China’s economy. Other factors are also rocking the energy markets. In recent weeks, Congress approved lifting the ban on the export of crude oil from the United States. President Obama signed this as part of the omnibus spending bill. Crude oil exports have already been shipped to Europe and South America.
There’s also big news with the United States’ Strategic
Petroleum Reserve (SPR), which was created as a
counter-balance to Arab oil producers’ power after the
energy crisis of 1973-74. In late 2015, federal law-makers approved provisions to sell millions of barrels of crude oil from the SPR in the coming years. The proceeds will be deposited into the general fund of the U.S. Treasury. (Note—this comes at a time when China is increasing its petroleum reserve.)
What about spring contracting?With crude oil below $30 a barrel, it appears we’re in a flat to downward energy market. We also have plenty of propane, and it looks like propane prices will re-main flat.
I’m recommending you fill your current fuel stor-age, but don’t get overly aggressive about contracting spring fuel. Now’s the time to hold off and go hand-to-mouth as we see which direction the energy markets will go.
If you have any questions about any energy-related items, contact your local FCA energy specialist, or call me at 877-753-5400. We appreciate your business. ◗
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In 1876, Ulysses S. Grant was president, Alexander Graham Bell invented the telephone, and Mark Johnson’s ancestors settled the farm south of Marcus where he grew up. Not only is farming in Johnson’s blood, but he’s willing to share his knowledge and experience as the treasurer for FCA's board, where he’s starting his 13th year of service.
Q: How did you get started in farming? A: I grew up on a farm, but things changed after my dad, Robert, died when I was 10. There were six kids in my family, and I was the youngest. I can remember having to take on big responsibilities from a young age. I borrowed money when I was 16 so I could start raising hogs. I got big into farming in 1983 when I went from 160 acres to 550 acres. The Farm Crisis was underway when I was trying to start farming, so I learned to look for opportunities. Every time hog pric-es got low, I’d buy sows. I grew my operation and still love my job.
Q: What do you like about the cooperative
business model? A: While times change, the cooperative model is still as relevant as ever. The co-op is all about strength in numbers and helps buffer the forces that are less than favorable for the farmer. When you hear experts en-courage farmers to share equipment and work together to spread out their costs to remain competitive, that’s what the local co-op has done for generations.
Q: What do you like about FCA?A: How doesn’t FCA benefit my operation? I thoroughly use their agronomy services, including crop scouting.
Plus, we get most of our feed and fuel from the co-op. I also sell most of my beans and some of my corn to FCA. To me, the employees are the most important resource at FCA. Good help is vital to a full-service co-op. FCA’s turnover is very low compared to the industry average. A successful culture starts with top management. Jim Carlson is highly respected in the industry. When you go to an AGP meeting or CoBank meeting, people seek him out and ask for his input. I’m glad we have talented people throughout FCA who can help me grow my business.
Q: What do you appreciate about FCA’s board
members?A: We all love farming and understand the value of the co-op. While we don’t always agree, at the end of the day, we look out for what’s best for FCA’s members. I encourage people to run for FCA’s board because what you gain from the experience is a big return on the time you spend attending meetings. You become a better farm manager when you can rub shoulders with your fellow board members. They all have different areas of expertise, and you can learn from each of them. I also learn a lot from the FCA managers and ag industry lead-ers who speak at our annual board planning session.
Q: What are some of the biggest challenges
facing the co-op? A: The same question that affects a farmer also affects FCA: How much leverage is too much? It’s a balancing act. We also need to balance the needs of our current patrons, who want better rolling stock and faster grain dumps, with the needs of our retired members, who want their deferred patronage sooner rather than later.
Johnson’s Ag Roots Run Deep
Mark Johnson, FCA board treasurer
We also have to consider what FCA’s employees need in terms of competitive salaries, retirement packages and modern technology. It all comes down to what the co-op can afford and how much we should borrow.
We do know the major capital investments we’ve made in recent years have paid off quickly. I remember what a big deal it was to invest in two 750,000-bushel bins at Webb, along with grain legs and a dump pit. This grew our business so much in the area that we barely had enough space within two years of completing this upgrade. This “build it and they will come” example gave us the courage to make more of these investments throughout all of FCA.
One challenge that concerns me is ethanol’s un-certain future. If this industry goes away, will FCA have to build expensive rail facilities? While the things that scare you the most usually don’t happen, you still need to be prepared for potential changes.
Q: What will FCA focus on in the future?A: Growth. As Jim Carlson says, we’ll start shrink-ing the co-op when the farms start shrinking. FCA needs to be a size that allows us to purchase inputs in volume at a competitive price. I saw how valuable this was about five years ago when propane was on allocation. While most co-ops and private companies couldn’t get enough propane, FCA’s allocation was large enough we could honor every contract.
As a full-service co-op, we try to get the best pric-es we can, although it isn’t always possible for us to provide the lowest price. In all cases, we work hard to make sure you have the products and ser-vices you need, when you need them.
I’m glad FCA is staying financially strong to serve members for years to come, and I’m blessed to have two boys who want to farm. Even though agriculture is in a downturn, I look at this as the next great opportunity for my sons and the next generation of farmers.
Editor’s note: In addition to raising corn and soybeans, Mark and his family finish approxi-mately 5,500 head of hogs each year, along with 300 head of cattle. Mark and his wife, Karen, have four grown children, Bob, Ryan, LeAnn and Shane. Karen works as a paraeducator at the Marcus-Meriden-Cleghorn elementary school in Marcus. Bob farms full-time with Mark, while Ryan farms part-time with his family, in addition to working part-time as an agronomist for the co-op in Paullina. ◗
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When you’re a livestock pro-ducer, distractions are plenti-ful (weather, markets, animal health, input costs and more), and time is short. Now’s the time to take control. I encourage you to:
• Deal in reality. Reality isn’t the way you wish things would be or the way things appear to be, but rather the way things actually are. Deal with the realities of your operation, and don’t waste time worrying about other people’s operations. Smart producers win by knowing their hidden costs, shrink, perfor-mance, efficiency, etc.
• Develop a plan. The best way to predict your future is to create it. Instead of reacting out of emotion and fearing a short-term doom-and-gloom scenario, outline a plan tailored to your operation. It needs to be your plan, not someone else’s. Remember, you can still buy cattle today and make some money in this business.
• Draft your team. Make sure the things you do every day benefit your operation. FCA’s feed sales spe-cialists are here to help. Taylor Dorsey (712-249-5710), Matt Lacey (712-371-3128) and Mike Smith (515-669-8194) have a number of programs that can benefit you. Get these folks involved.
• Don’t lose focus. Once you’ve set your goals, make sure you have ways to measure them. Do your pro-jections, determine a breakeven and look at a bench-marking system. How does your operation compare? Focus on progress, not perfection. Also, remember good management doesn’t cost more than poor man-agement.
Farming will always be full of distractions. If you’re a beef producer, always remember that you buy cattle, sell them and get paid to hang weight on the rail. If you’re a swine producer, revisit your marketing plan and have someone in the operation who can pull the string.
When you stay focused on your goals, you can manage your distractions instead of letting them manage you. Thanks for letting us help you reach your goals. We appreciate your business. ◗
Distractions Abound, Stay Focused
FEED FOCUSBy Marc Hinners
Feed Manager
Fi r s t Co o p e rat i v e as s o C i at i o n
po Box 60960 ri v e rv i e w Dr i v e
Ch e ro k e e , ia 51012-0060
PRSRT STDU.S. POSTAGE
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AGRONOMY NEWS By Mark Braunschweig
Agronomy Manager
If you applied ammonia last fall, you’re probably won-dering if it’s still there—especially with the excessive rain we got in December.
Don’t assume all the nitrogen (N) applied last fall is gone. That’s the word from Dr. John Sawyer, an Iowa State University Extension soil fertility specialist. “It’s hard to make an estimate of losses for such an extreme event and time of the year,” he noted in a recent article.
Instead of worrying that your N is gone, it’s more pru-dent to evaluate specific situations and see how weath-er conditions develop in the weeks ahead. With the soil profile moisture recharged, there’s the potential for excessively wet soil conditions this spring. This will have a greater impact on N loss than wet soils last fall.
I recommend using a stabilizer to protect your spring N application. Instinct® is proven to optimize corn’s yield potential by inhibiting nitrification of applied N
from UAN, urea or manure. This allows N to be avail-able longer at the root zone, when and where the corn needs it most.
While it’s easy to focus on N, don’t forget to consider the Law of the Minimum. This states that yields are reduced when one or more nutrients are lacking. Since 60% of your yield potential depends on soil fertility, it’s important to make sure you feed your crop with the right amounts of N, phosphorus, potassium and micronutrients.
We’re ready to help you get your 2016 crop off to a good start. Talk to your First Cooperative Association agronomist for more information. We look forward to working with you this spring. ◗
Is My Nitrogen Still There?
JUST A REMINDER:
Make sure you have your private pesticide
license up to date.