Coop problems

[sw363535]

With all the things that are wrong with the coop system, and all the poor history, one of our two local coops located at Hooker, Oklahoma, has given us the latest example.....  Long considered one of the strongest in the area, they have conservatively done very well with a lot of ancient storage facilities...   Decides to fire/push its Manager out the door.

Following four years of wheat failure(lets face it --crop failures, except for a little irrigation delivery), in which management managed to show profit every year despite very low storage figures and record volatility it happens...

A manager who weathered the worst 4 years in history.  Was willing to make changes, cut loosing ventures like a tire shop that wasn't selling enough work to pay its expenses...

A manager who understood marketing and changes in grain movement....Had a good relationship with our feedlot system and the local terminal,,,, Was willing to work with farm storage customers to corner some of that grain traffic...and earn their loyalty...  Great with the public and a trusted face in the community.

And why is he gone,,,,I don't know--------maybe because he fired someones cousin, or closed something, or was promoting an expansion into a grain rich area 20 miles away to replace some of those condemable facilities...

Because he had some vision for the area.....and his board of unqualified directors don't....... who knows....

I know of one entity in the area that has been growing steady for over 50 years and had never done business at the Hooker Coop.  Having their own storage and elevator ---marketing 1.5+ million bushels of grain per year in the area.  But in about 2009 this manager decided to get to know them and learn their business goals and needs....

He found a way to meet some of those needs and understood that a portion of that 1.5 needs a trusted market at harvest....  He captured a lot of that portion with trust and integrity.....

I always thought it was the tax issue and the stock loss issues or poor management ...... but now I know.  The biggest coop issues are related to the board of directors the unprepared elected by the uninformed.... No COOP can afford the loss of bushels that will probably walk away with this decision....

Elcheapo and others have been trying to teach us, but this example made it crystal clear to me.... It is the Board of Directors that make the fatal decisions.

I am not easy on business managers, but this guy was one of the best I have watched work....

[westernia80]

Our local 5 location Coop has a ground pile that holds 650,000 corn.  2 years ago, they "merged" with another coop and were for a time the largest in Iowa for grain storage.  The location manager at the time who had been at the same place since the 80's told the new bosses that if the pile was gone by march there will be no spoilage even without a tarp over it.  Keep into the summer and ground water will come up through the asphalt floor.  They wouldn't listen and left it untouched and tarped till July.  Lost 200,000 that they are still trying to blend out from the '14 crop.  It is still sealed with no plans to move it anytime soon.  I guess someone in West Des Moines is much smarter than the local guys.  Also they have lost about 75% of a good agronomy and fuel business for lack of service, but they are building grain bins like crazy.

[smokeyjay]

SW, I grew up SE of Hooker, in the Adams and Balko area.  Your observations are pretty spot on. Many coop boards are ill prepared to engage in due diligence to effectively perform their fiduciary responsibility and protect shareholder value. They often have an introverted view of the world. Strategic planning is drudgery, something to tolerate for a day or two, and then put the book on the shelf. The coop serves their needs, limited as they are, having little time and less dedication to do a good job. 

[Jim Meade / Iowa City]

Our local coop is not too big and has been on hard times the last couple of years.  The solution seems to be a merger with Heartland Coop.  Heartland says they are going to keep the same employees for a year unless they screw up.

We have a good energy business, a fair marketing program and a losing agronomy operation.  

I've not been very close ot the management.  For various reasons, I've done a lot of energy business with them, almost no marketing and very little agronomy.  Whatever happens won't affect me very much in the short run.

I just read this thread and have to say that even before I read it I was wondering about managers with vision, leadership and drive.  We have several small agronomy outlets that seem to be doing well right under the nose of the coop - could the coop have done what they're doing?  I dont' know.

It may not matter much.

[westernia80]

Jim, Heartland is who bought out my local Coop.  It was a full service coop with good agronomy business, fuel, and grain.  Although the grain facilities were getting outdated, they had a good business.  Now there has been a lot of employee turnover, they lost a large amount of agronomy business to neighboring companies and don't seem to care.  Also now have to call Council Bluffs for fuel which is an hour away.  They have built several new bins around the area though so that is good.  Their grain prices are competitive so I do sell to them what I can't hold on farm.  I guess many of us in our little area get the feeling that Heartland is grain company that provides other services because they have to not because they want to.

They did keep the employees like they said they would.  Most left because they didn't like the "corporate" atmosphere and no local control anymore.