PENDLETON, Ore. (AP) — A longtime eastern Oregon farmers' cooperative is hoping to partner with a large agribusiness collective to spur new growth and investment.
Pendleton Grain Growers entered into a non-binding agreement with CHS Inc. of St. Paul, Minn. to pursue a possible partnership, The East Oregonian reported Saturday (http://bit.ly/1kt3Bju ). CHS Inc. is a producer-owned Fortune 100 company focused on global energy, grains and foods.
Pendleton Grain Growers signed a loan agreement last month with CHS Capital for $10 million. Officials say the added capital would help upgrade grain elevators, technology and provide affordable agronomic services.
The two organizations have a history of working together. They formed a joint venture 15 years ago at the Feedville plant in Hermiston.
The new deal would not affect the co-op name, brand, business model or its local control.
In recent years, farmers' co-ops have faced low commodity prices, rising costs and operational issues, among other problems. Forming mergers and other alliances has been one solution.
Pendleton Grain Growers was incorporated in 1930, one of several cooperatives to make up the regional North Pacific Grain Growers, as farmers united to protect themselves against declining wheat prices.
The co-op is now worth more than $17.5 million, has more than 200 employees and about 2,000 stockholders, and includes multiple facilities throughout eastern Oregon.
But officials say the co-op's profit returns have been marginal for decades, blocking it from reinvesting in the business as agriculture undergoes rapid changes with the impact of new technologies.
"When you look at all the things a company needs to remain vibrant, we have to have capital,"?said General Manager Rick Jacobson. "This is about the future. I think it's very exciting."
Any new partnership must be approved by the co-op's membership.
Information from: East Oregonian, http://www.eastoregonian.info