by Michael Hohenbrink
Proximity and the ability to respond better to emerging challenges are being stressed as early talks proceed that might see the merger of two Iowa cooperatives.
Farmers Win Cooperative is in talks with Five Star Cooperative for a merger that could unite the two cooperatives. Talks have been ongoing with both boards inking a letter of intent to proceed with the merger.
The talks follow a lengthy process, with Five Star first eyeing the possibility of a merger five years ago, said Ken Smith, general manager for Five Star Cooperative, during an interview Monday with Mid-America Publishing.
“We believe this merger moves the needle in a very material way for our employees and our customer,” said Smith.
Five Star and Farmers Win have, in turn, been in the early stages of exploration for about three years, said Smith.
Key factors prompting exploration include evident margin compression for the industry, and Farmers Win fit what Five Star was looking for, so the latter reached out to Farmers Win, with both cooperatives enjoying similar company cultures, said Smith.
Farmers Win has locations throughout Winneshiek and Fayette counties, from Ridgeway to Jackson Junction to Waucoma and other area communities.
Immediately contiguous to overlapping in some places, Five Star, based in New Hampton, serves Burchinal, Clear Lake, Dougherty, Galbraith, Hanlontown, Ionia, Joice, Klemme, Lawler, Mason City, Nashua, New Hampton, North Washington, Rockwell, Scarville, Sheffield, Swaledale and Ventura.
If the merger proceeds, the combined entity would stretch two-thirds of the way across northern Iowa.
The process began before the pandemic hit, increasing the difficulty for any exploration of a merger. COVID-19 certainly slowed down the process a bit.
“[I]t’s really expanded our time frame,” said Trent Sprecker, general manager of Farmers Win Cooperative.
Nonetheless, Sprecker sees the move as an opportunity. Sprecker thinks cooperatives are seeing an increasingly complicated andTo read more of this article, please login or sign up for our E-Edition