Farmland Industries Inc. announces joint venture

Business Wire,  June 14, 1995  

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KANSAS CITY, Mo.--(BUSINESS WIRE)--June 14, 1995--Farmland Industries Inc. announced Wednesday that its Grain Division, the Farmers Co-op Grain Association, Wellington, Kan., and the Danville Co-op Association, Danville, Kan., have formed a joint venture, Sumner County Grain, L.L.C., to lease and operate the Wolcott Lincoln Terminal facility in Wellington, Kan.

"We're excited about this opportunity to work hand-in-hand with our cooperative owners to provide their producer-members with more direct access to markets for their grain," said Mike Rowan, Farmland Grain. "This venture will enable all farmers in the area to benefit not only from improved market access, but also from the logistical efficiencies gained from its train-loaading capability, their Cooperative System's shuttle train network, and its value-added relationships with transportation partners and consumers."

While many railroads turn an average of 1.2 to 1.6 trips a month, shuttle cars can generate between 4 to 8 turns a month depending on the grain's final destination. Farmers moving their grain to market through Sumner County Grain will share in cost savings generated by their Cooperative System's ability to use the fast loading, dedicated power, and even faster unloading made possible with tier trains; while most cars take 48 to 72 hours to unload, for instance, shuttle or tier trains can be unloaded in 15 hours or less.

"Farmers will be able to save time and money by the joint venture's ability to exert more control over transportation costs," said Ken Fitzpatrick, general manager, Wellington, Kan., Farmers Co-op Association. "And, by taking advantage of the terminal's transportation schedule, they can plan when they should deliver their grain to capitalize on its higher volume."

Until recently, their Farmland Cooperative Grain system has used shuttle cars primarily to move its members' grain to export markets (100 cars can be moved through the Galveston, Texas, elevator in ten hours), but opportunities to use them in domestic channels are being captured and more of them will be possible as more facilities are upgraded.

"We wouldn't be forming this venture if we didn't see it as a tremendous opportunity to help our farmer-owners improve their bottom lines," said David Andra, general manager, Danville Co-op Association, Danville, Kan., "We think it will add value to their grain while enabling them to take advantage of their Cooperative System's contacts with domestic and foreign buyers and its logistical efficiencies."

Farmers Co-op Grain Association, Wellington, Kan., is a grain marketing and farm supply cooperative serving about 900 farmers in south-central Kansas. Its businesses include feed, fertilizer, fuel, grain and farm supplies, and its animal revenues totaled $16 million in 1994.

Danville Co-op Association, Danville, Kan., is a grain marketing and farm supply cooperative serving 788 farmers in Harper, Sumner, Kingman and Sedgwick Counties. If offers feed, fertilizer, fuel, grain and farm supplies. In 1994, the Cooperative had $17 million in total sales.

Farmaldn Industries Inc., is a diversified agricultural cooperative headquartered in Kansas City, Mo., and owned by about 1,500 local cooperatives and their half-million farmer-owners in 22 states across America's heartland.

Farmland provides farm supplies and services -- feed, crop nutrients and plant protection products, livestock production services, energy, and information -- to the Cooperative System's farmers through its local cooperative owners, and both markets and processes farmers' beef, grain and pork products to consumers in the United States and in more than 85 countries overseas. In 1994, Farmland generated revenues of $6.68 billion.

CONTACT: Farmland Industries Inc., Kansas City

Mike Rowan, 816/459-4020

David Andra, 316/962-5238

Ken Fitzpatrick, 316/326-7496

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