Agricultural cooperatives provide a range of valuable services to area farmers.
Among the first things we Illinois residents mention when asked about our state is the mile upon magnificent mile of corn and soybeans. Certainly the Land of Lincoln is known as a breadbasket state, iconic stalks of corn stretching to the sky and feeding the nation. Yet many outside the agricultural community remain uninformed about the extent of farmers’ efforts to keep us fed, as well as their actual operations down on the farm.
“I’m sure they would be very surprised at how much exactness the farmer uses in his production, the technologies he uses, and how this can impact him in some pretty big ways,” says Rich Sauder, general manager of the Tremont Cooperative Grain Co. Sauder’s point is well-made: our local farmers are meticulous, tech-savvy, and concerned with the welfare of their customers—that is, essentially everyone who eats.
In the early 20th century, American farmers started banding together to form agricultural cooperatives, which ensured they received fair market prices and reliable access to inputs like seed and fertilizer. The mission of today’s co-ops remains the same: to improve farmers’ long-term profitability and sustainability through local ownership, management and collaboration. By providing storage, fuel, equipment, crop advice and market quotes, the co-op system helps producers maximize their efficiency and maintain stability in an ever-changing market—which, in turn, allows them to keep putting food on our plates.
Teaming Up to Reap and Sow
In the 1920s, farmers began making the transition from horse-powered operations to the use of tractors in their fields. But the shift to the combustion engine from the inexpensive energy source of working animals also created a problem. Because farmers were accustomed to raising their own “fuel”—the corn, hay and oats they fed their livestock—it meant they had to both budget for fuel and secure a means by which to acquire it.
At the time, the large petroleum companies were generally unwilling to transport product from their urban headquarters to rural farming areas, so nine Illinois co-ops—in concert with the Illinois Farm Bureau and Illinois Agricultural Association—filled this gap in 1927 by becoming a chartered wholesale petroleum distributor, offering farmers a reliable, affordable supply of high-quality fuel. The Illinois Farm Supply Company, as it was first known, adopted the FS trademark in 1955, relocating its corporate headquarters from Chicago to Bloomington in 1961. 1980 saw the consolidation of FS Services, Inc. and the Illinois Grain Corporation, resulting in the regional co-op known as GROWMARK, Inc.
Lay of the Land
Ag-Land FS—a locally-owned co-op and member of the GROWMARK System—came about when Logan FS, Inc. and the Tazewell Service Company merged in 1991. Heartland FS, Inc. joined a decade later, giving Ag-Land FS a combined total of more than 140 years of agricultural experience and expertise. Today, the company serves farmers in Logan, Peoria and Tazewell counties with a 12-member board of directors comprised of four elected farmers from each county.
Floyd Heller, general manager and CEO, oversees operations for all of Ag-Land FS’ product divisions, including liquid fuels, agronomy (think: seed, fertilizer and chemicals) and the buying and selling of grain. “To be a member of our cooperative,” Heller explains, “you have to be engaged in the production of agriculture.” To qualify as farmer members—or “M” members, as they are designated by the Farm Bureau—farmers must gross over $2500 of farm income each year through the sale of grain, livestock and rent from farmland ownership. (Associate or “A” memberships are for non-farmers.) “M” members own stock in the co-op, which ultimately means the farmers who benefit most are those who control its operations. “We concentrate on what’s best for the users of the company,” says Heller. “We’re increasing our infrastructure, paying back a good patronage dividend… staying up with technology and giving the best farming practices.”
Indeed, advanced technology is now common in the fields. Farmers are using mobile devices and GPS to improve their accuracy in row planting, while referring to satellite images to detect insect infestations as soon as they occur. Heller notes that almost everyone he works with—from plant managers and crop specialists to petroleum salesmen and administrative staff—uses an iPhone or iPad on a daily basis. “The equipment is unbelievable anymore,” Heller says. “There’s auto-steer in these tractors that use GPS… They can almost drive themselves.”
Fertile Ground in Tremont
The service-oriented Tremont Cooperative Grain Co. got its start in 1911 with a single grain elevator in Tremont; a second property was purchased east of town in 1982. Today, the co-op boasts an additional location south of Pekin, an office headquarters, and a combined grain storage capacity of 10 million bushels of grain. It’s managed by a seven-member board of directors and regulated by the same government agencies as Ag-Land FS (including the EPA, FDA, USDA and OSHA).
But where Ag-Land FS is more supply- and production-centered, Tremont focuses on grain handling and marketing. Tremont Co-Op provides three primary services to farmers: merchandising, storage opportunities and grain drying (for those who harvest above optimal moisture levels). By providing facilities in which farmers can store grain until it’s ready to be sold and shipped, and by merchandising and handling the grain itself, Tremont Co-Op facilitates greater efficiencies—and profits—for its members.
Sauder estimates that corn and soybeans make up about 98 percent of the 10 million bushels of grain he buys and sells each year. The co-op is generally most active between early September and mid to late October, depending on planting schedules. “We’re a very seasonal business,” he notes. “I take in 90 percent of my annual physical grain in those eight weeks.” With both a grain dealer’s license and a warehouse license, the co-op markets grain every day on the Chicago Board of Trade, staying hedged at all times, and often selling within minutes after purchasing. Sauder explains that farmers can market their grain prior to delivering to the co-op, at the same time as delivery, or up to a year afterward. “The marketing period for a typical crop can easily be 18 months.”
Going Green with the Grain
While there is a notion outside the ag community that farmers mistreat their land with toxic chemicals and unsustainable practices, Sauder says this couldn’t be further from the truth. “Why would he not take care of—to the best of his ability—the main resource that he has to generate revenue? Farmers, I would argue, have been conservationists from way back.” Co-ops do more than just bring farmers together for marketing, he says; they also promote strong management practices and advise farmers on environmentally-friendly methods of production.
Sauder believes that genetically modified organisms (GMOs) such as hybrid corn get a bad rap, despite a broad scientific consensus that they pose no greater risk than conventional crops. In reality, GMOs speed the process of natural selection by breeding corn and soybeans for desirable traits, producing higher yields and enhancing the quality of the grain, while requiring fewer pounds per acre of chemicals like insecticides and herbicides. In addition, he says, farmers are improving their tillage practices and leaving more organic residue, such as corn stalks, on their fields, which helps preserve the soil and its nutrients.
Environmental stewardship is at the top of Ag-Land FS’s list of priorities as well; its staff is currently focused on self-regulating the use of nitrogen on crops. “Before the EPA comes in and tells us how we have to do it, we’re trying to do it ourselves,” Heller declares. He emphasizes that today’s farmers aren’t dumping surplus chemicals into ditches or streams and contaminating the water supply; they are regulated down to the ounce to minimize what hits the fields. “It’s not what the public perceives is really going on,” Heller says. “We’re very, very meticulous about our jobs.”
In addition, Ag-Land FS is particularly concerned with the development of biofuels and renewable energy. Commercial and farm fuels currently make up a large part of its business: each year, the co-op sells about 30 million gallons of biofuels, all regulated by national renewable fuel standards. Ag-Land FS is also a strong proponent of LP (liquefied petroleum) gas, which burns cleanly with low emissions and no ground or water hazards.
As for this winter’s extreme weather, Sauder isn’t too worried about bouncing back. Of course, harsh conditions like deep frost and flooding are always a concern, but he says farmers are accustomed to these challenges and nearly always see the seasonal temperatures and rainfall even out. Whether spring arrives on time or not, farmers can plant right on schedule or three weeks late and still have a successful year. “It just seems to average out,” he says. “That’s nature’s way of compensating.”
Heller concurs, noting that while harsh winters can hurt farmers, “Mother Nature can change all that, too,” with long, hot summers that can bring a crop’s maturity up to speed and prevent a late harvest. Beyond that, Heller adds that agriculture is one of a handful of industries that’s actually thrived during the recession of the last few years. “Most people haven’t paid attention, but agriculture really has boomed,” he says. “Corn prices were high, co-ops were making good money, [and] paying back good patronage income.”
“We’re in a great industry,” agrees Sauder. “The last time I checked, eating wasn’t going out of style!” Indeed, we are perhaps more dependent on our agricultural system now than we’ve ever been. Although just a small portion of our growing population understands the logistics of agricultural production, we continue to place our faith—and our appetites—in farmers and their co-op affiliates. And that faith is well placed, says Sauder.
“We in production agriculture will always have a job to perform: to raise quality, safe food,” he concludes. “After all, we’re consumers, too.” iBi