OT Anyone remember Midland Coops

I found this the other day. Takes me back to the 1960's. We had a Midland Coop in the small town by us. My Dad was a member and every year he got a small check in the mail. Not sure if this was a profit share or a percentage back from his purchases. I found this the other day. Takes me back to the 1960's

I remember seeing that logo.

How about Double Circle coops, they were huge around here back then, a blue & red circle side by side? Did they turn into Cenex I think, which now has turned into Harves States with a small Cenex as part of the name?

--->Paul

They had their own product lines of oils (Lanco, Premco, Midco and GoldenD), filters, Coop branded tires and batteries, fuels, grease.


The station in Erskine was busy .. Full service at the pumps, bulk fuel and propane bottle delivery. Car, truck and tractor tire mounting, minor vehicle repair and service work.

Wasn't Double Circle a Farmland Co-op based in Kansas City? Just rambling of the top of my head here so the validity is very questionable. Felco and Cenex merged a while ago. We had Felco here in NW Iowa but Cenex was more of a Minnesota Co-op that was into dairy. Correct me if I'm wrong. Jim

Worked in the Midland Stillwater mn., station in the early 60's.

MN is known for the start of the farm co-op system- more co-ops here than any other state, Profits split among the members according to dollar value of business done with them. Usually about 20-25% paid in cash (eventually dictated by law to cover expected income tax liability of the recipient), while the rest went into a revolving fund of old equity to be paid later, as future profits allowed. Income tax is paid on total declared dividend in current year, old equity payments are not taxed again when received. My home town supply co-op was part of Midland. Local creamery was another co-op, grain elevator another, even local livestock shipping assn. was a co-op. REA another co-op. All these eventually morphed into bigger units. Dairy into Land O Lakes, supply into Cenex, livestock into a St. Paul Stockyards co-op, grain through GTA into Harvest States, etc.

I remember that one. It was on the north side of town on Hwy. 95. That was back when Stillwater had a downtown with a Ben Franklin, a Sears, Consolidated Lumber, Hooley's Grocery (now Cub), a Rexall Drug store and alot of others. Now it's a tourist town full of antique shops and eating places.

When the mergers started, it was hard to keep up! They went together rapidly. CHS (Cenex-Harvest States) seems to have most of them that were around here in MN. I forget that other regions are not so dominated by coops, it's just the normal farm business here.

I see Farmland went bust a decade ago, forgot about that, took a lot of dividend money with it. My local coops were mostly with CHS back then so I wasn;t hit too hard.

Here's a list of the bigger one's left out there:

http://www.farmanddairy.com/news/three-ag-co-ops-top-national-list/5483.html


My local coop just joined in with ADM, to build a rail loop grain terminal. Big project, close to $30 million. The coop threw in all the grain facilities, and will now get 1/2 of the proceeds of the grain business. Pretty interesting deal, as there was no vote on it or anything - just blam, here you go, ADM owns half of you now.

I don't expect to see any dividends when I retire, ADM will own the whole coop by then....

--->Paul

If still in business, may be able to sell your dad's share(s).

Pumped gas at the coop in Le Sueur mn 1973-74.Bob Miller

I lost 66% of my old equity in Bongard"s Creameries when they redefined bookkeeping a few years ago. Well over 30 grand that they said really doesn"t exist. They were a well-managed dairy co-op under the guy who built it up over decades. New guy and board spent over 10 mil in cash on hand to modernize a Grade B cheese plant so they could sell a few tankers Grade A per week into TC bottling plants. Bankers pressured farmers to insist on Grade A for the dollar/cwt premium, yet bulk of milk went into cheese. Bought a plant in Perham (?), hundreds of miles away, to expand in a downsizing industry. New guys claimed bylaws required a refiguring of equity. We went from years of over $1.50 cwt dividends to years of no profit. They paid no old equity this year.

The way you describe the situation is a little misleading Paul. There is actually a completely new company being created that the coop will own half of. To the best of my understanding ADM contributed most of the money for the rail loop facility while the coop contributed its old grain facilities to form the new company. The coop claims that what they received for the facilities was way above book value and by contributing the facilities instead of cash they did not have to take on extra debt. Also grain marketing is only a part of the coop's business. The farm equipment, agronomy, feed, and other divisions are in absolutely no way controlled or owned by ADM. Don't be so skeptical about not seeing any dividends.

There was a Farmers Coop here in New Ulm when I was a little kid, it went under back then. Dad lost equity, I believe he was pretty smart & didn't lose much actual grain in that one. It was a game of chicken, the coop was paying 5-7 cents more per bu to gain more bushels, you kinda knew they were trying to replace to much debt with more volume and it would blow up, but - they were paying more so where do you sell your load of grain..... Nowadays Clawbacks and those fancy lawyer terms would eat you alive, but back then when the doors were shut down you had what you had and they had what was inside and that's how it was done.

I can work with a coop, and I can work with a big private business, but this combo we are getting, that's a hard one to do business with - I'm the little nut in the middle that will get ground up and spit out with empty pockets.

--->Paul

I live on the side the coop has been moving away from for many years now. I'm pretty positive & upbeat compared to other's opinions I've heard. Couple years ago I kept being asked what the heck that coop is doing? Now you mention the name & they just grin, don't ask questions any more.

I won't see any better grain prices, I'm too far away from Brownton. If the terminal boosts prices a few cents, the LLC will take that away in transport costs from me to the terimal....

I'll see 1/2 of the normal dividend check - ADM gets the other half. It's possible grain prices will go up a bit and the overall dividend will go up a tad, but it won't double!

Everything will look rosey for 5-7 years. Then someone will make a mistake - like the fertilizer plant when they filled it & the price of fertilizer dropped. Somehow, because a private enterprize is now involved, we won't see the books on the cloudy period - that can be hidden away. We won't really know anything that is going on in the books there.

Then, well things went bad, since ADM had to kick in some assets to shore things up, the coop had to kick in too.

Then if things still go bad..... ADM owns the coop for 60 cents on the dollar, and I have fond memories.

I hope I'm all wet on this, and I'm in good health cashing my coop retirement checks when I'm 75-80 years old!

As a farmer we are the catch-all of any sort of financial mess. As MF Global shows when things are good, it's all good, but when the wheels fall off, the bad checks and empty accounts are held by us low people on the totem pole.

So, it's hard enough to keep my small farm business afloat & sound, and deal with a coop or a private business and enter into good sound transactions that I am slightly in control of.

Now with this deal, I sign a contract & I'm involved with a coop, an LLC, and a giant private business.

If anything goes wrong with any of those 3, I'm in the hole.

I don't really care for that. We are in roller coaster markets with MF Global sharks all around, now I'm supposed to be the little pebble between an agribusiness giant and a pretty big coop.

On paper it looks good. I was mildly for the terminal when I first heard of it. I'm for progress, and farming is changing, coops gotta keep up. The coop needs to keep building.

Was very very surprised when they stopped being a coop tho! And you can sugar coat it all you want, the grain business is no longer a farmer owned coop.

This confused, co-mingled coop/private business is not so much for the little guy in the deal. Way lot of risk for the farmer. A whole lot. I give it 10 years.

--->Paul

Cenex is short for Central Exchange which originally was Farmers Union. When F U sold their own brand of products they were distributed by Central Exchange out of the twin cities. They finally figured out it wasn't a profitable deal and quit. Now most are Ace hardware store here.. Unless things have changed the Double Cicle was not connected with cenex or F U. They wouldn't take a Cenex credit card for diesel fuel