Magazine article Rural Cooperatives

Farmland Sells Grain Division to Joint Venture with ADM

Magazine article Rural Cooperatives

Farmland Sells Grain Division to Joint Venture with ADM

Article excerpt

A new joint venture between Farmland Industries and Archer Daniels Midland (ADM), being managed by Al)M, completed takeover of Farmland's grain division on June 1. ADM absorbed 280 of Farmland's employees, but 175 were left unemployed or seeking relocation elsewhere in the cooperative's system.

The joint venture gives ADM control over the bulk of Farmland's grain operation of 24 elevators with a total capacity of 174 billion bushels. Included in the action was the cooperative's brokerage arm, Atwood Commodities, and grain-testing laboratory at Bonner Springs, Kan. Both services are duplicated elsewhere by ADM's operations. Profits from the new joint venture will be shared by ADM and Farmland.

The pact was the latest in restructuring steps Farmland has been taking to improve its financial standing. The co-op suffered a $29.25 million loss for fiscal 2000, its first loss since 1993. The rising price of natural gas, a major component in fertilizer manufacturing, has been a prime factor in its losses. The cooperative also plans to close its canned ham plant at Carroll, Iowa.

On the brighter side, Farmland's operations for the first six months of fiscal 2001 are showing after-tax earnings of $5.4 million, up from a $48.6 million loss a year earlier. Total sales reached $6 billion, up from the $5.8 billion reported for the corresponding period in 2000.

Meanwhile, the cooperative has shut down its fertilizer plants at Lawrence, Kan. …

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