USA – CHS Inc., the largest farmer-owned cooperative in the United States, and West Central Ag Services, based in Ulen, Minnesota, have signed a nonbinding letter of intent for West Central Ag to join CHS, in a bid to strengthen the agricultural supply chain.
The transaction, disclosed on May 15, is not just a business move but a strategic step to align with CHS’s investments in enhancing the global agricultural supply chain.
This move is aimed at providing comprehensive value and market access for the cooperative system, underlining the importance and impact of this strategic combination.
Founded in 2000, West Central Ag operates four grain, nine agronomies, and one service shop in northwest Minnesota.
Its workforce comprises 132 full-time and 62 part-time employees. In 2023, the cooperative reported revenues of US$767.2 million and profits of US$41.2 million, along with 22.5 million bushels of licensed grain storage capacity.
Rick Dusek, executive vice president of ag retail, distribution, and transportation at CHS, emphasized this: “Better connecting the global agriculture supply chain and investing in the speed and space of our assets provides better market access and creates more value for farmer owners.”
This proposed combination follows CHS’s recent signing of a letter of intent in April to acquire eight grain assets from Minneapolis-based agribusiness giant Cargill.
Currently, CHS boasts 230 grain storage facilities, including 214 country elevators, with a total licensed grain storage capacity of 403 million bushels, making it the second-largest grain handling company in North America, behind ADM.
For the fiscal year 2023, CHS reported consolidated revenues of US$45.6 billion and net income of US$1.9 billion.
Duane Brendemuhl, board president and chair of West Central Ag, highlighted the two cooperatives’ shared vision to advance the cooperative system by linking producers to global markets.
“This proposed transaction provides an opportunity to bring more value to our farmer-owners and compete more effectively with other local ag companies while positioning us for the future success of a combined cooperative through efficient, globally connected supply chains,” Brendemuhl said.
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