On June 16, River Region Cooperative announced the approval of a vote to merge with South Central Grain and Energy.

On June 16, River Region Cooperative announced the approval of a vote to merge with another area cooperative. “The memberships of River Region Cooperative (RRC), Sleepy Eye, and South Central Grain and Energy (SCGE), Fairfax, both approved the plan of merger of the two companies,” stated the press release.

“Our cooperatives have been discussing this partnership for a long time. We have similar cultures, overlapping territories, and common investment needs,” said Larry Dean, Board President, SCGE. “We are proud to be a cooperative and even prouder that we have found a way to cooperatively work with our new partners.”

Earlier this year, the two cooperatives announced a study of the benefits of a merger, following the failure of a merger vote involving a third southern Minnesota cooperative.

The votes—submitted to members of both RRC and SCGE on May 30—were tallied at a special meeting on June 16. According to the press release, votes were cast by 64 percent of RRC members and 43 percent of SCGE members. The merger was approved with 403 in favor, 124 opposed at RRC, and 425 in favor, 99 opposed at SCGE. Accounting firm, Christianson PLLP, certified that the members of RRC and SCGE approved the merger by a super-majority of 76.47 percent and 81.11 percent, respectively.

“Each of our cooperatives brings strengths to this merger that I am excited to see expanded to the joint memberships. Clearly, the memberships also saw these strengths when casting their ballots. We look forward to Aug. 1 and working with our new partners,” said Bruce Kuelbs, Board President, RRC.

A statement included in merger information found on the company’s website explained the reason for this growth path: “Many agriculture companies, and companies across all industries, have been and will continue to explore mergers as a path for growth. In addition to many other benefits, cooperative mergers allow locally owned cooperatives to leverage the best aspects of each company and work towards a more efficient system, eliminating duplications in assets, rolling stock, and efforts, creating a more profitable system for the cooperative’s owners.”

Becoming a “destination employer” was also listed on the website as a reason for the merger. Finding that 33 percent of employees in the merged cooperative would be eligible for retirement in the next 10 years, creating a company and culture that would draw employees and minimize turnover was seen as a positive result: “Merging into a larger organization will create new opportunities for our employees—to advance, gain new job experience, excel in specialized positions, and keep them at your cooperative.”

Other features of the merger, detailed in the June 16 press release, include:

•A new name will be established for the unified company, with a registered address of the Sleepy Eye office location.

•Five directors from each current cooperative will be selected to sit on the new board of directors.

•The effective date of the new company will be Aug. 1, 2017 (fiscal year end July 31.)

The press release stated, “over 150 dedicated employees will continue to meet the needs of agricultural producers across the south-central Minnesota region,” while also announcing that David Peters, current SCGE General Manager, had been selected as general manager of the new merged cooperative. Stating that each general manager had unique skills and that many management options and scenarios were evaluated, a final statement said, “Unfortunately, a company of this size and structure cannot support two leaders.” A company spokesperson confirmed Subart will be leaving the company.

River Region Cooperative, founded in 1890, is a full-service agricultural cooperative offering its customers access to grain, energy, agronomy, and feed services in the Sleepy Eye region.

South Central Grain and Energy is a farmer-owned and farmer-focused cooperative headquartered in Fairfax with locations in Buffalo Lake, Cosmos, Darwin, Fairfax, Gibbon, Hector, and Stewart. SCGE is a full-service cooperative, offering members services in grain, agronomy, energy, and feed.