Two cooperatives with local facilities are considering a merger.
The board of directors for Progressive Ag Cooperative and for MKC (Mid Kansas Cooperative) have approved a letter of intent to pursue an agreement and plan of merger. The merger needs to be approved by the members of Progressive Ag Cooperative.
Derek Totten, board chairman for Progressive Ag, said the board recognized the value the merger would bring to member-owners.
“After considerable due diligence, we believe unification is the best way to generate stockholder value and benefits, compete in the marketplace, and build a strong foundation for the future,” he said.
“This merger would provide improved efficiencies in operations where both companies currently have grain assets, create opportunities to expand our technology and other services to producers’ operations in our footprint, resulting in improved financial performance, and ensuring our relevancy in the industry,” Totten said. “Increasing and improving the value to both members and employees of Progressive Ag Cooperative is our primary focus.”
Noting similar visions and values, Allan Wegner, MKC Board Chairman, said the merger would be a natural fit.
“Together, we have identified benefits and we look forward to working together for the future of our cooperatives, the members and our employees,” Wegner said. “The synergy we can gain by combining the two organizations will allow our cooperatives to continue to achieve more success.”
Progressive Ag Cooperative and MKC are currently finalizing due diligence and developing the required merger documents to be approved by both boards. A vote by Progressive Ag Cooperative members will be required to approve the merger, which is anticipated to take place early in 2022.
Progressive Ag was created through a 2016 merger between Danville Coop and Wellington Farmers Coop. Danville Coop was created in 1952, and Wellington Farmers Coop was established in 1957. Progressive Ag has more than 1,200 members, and is currently based in Wellington. Progressive Ag has 13 locations, including Argonia, Mayfield, Danville, Bluff City and Wellington.
MKC, founded in 1965, is based in Moundridge and has more than 8,300 members. MKC has been part of several mergers, including a 2016 merger with Farmers Cooperative Association in Manhattan. MKC has more than 30 locations in Kansas.
The mid-2010s saw a number of cooperative mergers across the country. Some of those mergers were very large, including a March 2016 merger between two cooperatives in Ohio with combined sales of $900 million.
Also in 2016, Farmers Cooperative Elevator Company in Cheney considered a merger with Anthony Farmers Coop and OK Coop in Kiowa, but talks fell through.
In spring 2016, MKC broke ground for a high-speed grain loader near Milan. There were industry concerns at the time that there might not be enough grain to support all the cooperatives in Sumner County. The massive facility opened in May 2017, with a capacity of 2.7 million bushels in the upright concrete storage, and 4.5 million bushels of capacity in a flat storage building. The facility can load 110 rail cars in the span of seven hours. It sits next to the BNSF main rail line just outside of Milan.