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Co-op Merger

Co-op Merger

Dakotas ag co-op progresses after merger

The Associated Press - May 30, 2018

MITCHELL, S.D. — A recently formed agriculture cooperative is moving forward after starting operations in the Dakotas this year.

Agtegra Cooperative purchased 85 million bushels of grain from February to April and has shipped more than 60 million bushels, the Daily Republic reported.

"We knew that the impact of merging and coming together was going to be big, and I don't think we realized just how big," said Mike Nickolas, executive vice president for grain at Agtegra. "We did see that in the first three months."

The newly formed cooperative was created by the merging of former South Dakota Wheat Growers and North Central Farmers Elevator co-ops.

Agtegra has also benefited from a small increase in prices in February, as well as good corn and soybean exports in the Pacific Northwest, said Nickolas, who is also the former CEO for North Central.

"We've entered a new era for sure," he said. "This could keep extending going forward."

Wheat Growers and North Central attempted a merger plan in 2015, but member-owners of the two former co-ops rejected it. The member-owners approved the merger in September, with 58 percent of North Central members and 63 percent of Wheat Growers supporting it. Advocates estimated that the merger will save $12.7 million annually over the first four years.

Nickolas said there have been benefits to the merger, with a large footprint that includes 60 locations in northern and central South Dakota and southern North Dakota. Agtegra has 6,770 member-owners and about 20,000 equity holders in the company.

"Some of the efficiencies that we felt could be possible have been there," Nickolas said. "When you're transferring grain to a rail line, there's going to be some savings by being able to go to the closest site ... and moving trains to the facility that is most advantageous. It's allowed us to be more price-competitive."

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