Farmway Co-op Invests, Expands to Help Farmers Succeed

Posted October 13, 2015

In 104 years, Farmway Co-op has grown from a single petroleum cooperative to one of the largest agricultural cooperatives in the United States. Throughout that entire history, however, Farmway has remained committed to the vision of being a “partner in growth,” according to Mallory Wittstruck, director of communications for Farmway.

“We want to be the extra hand in the field and the extra hand at the elevator,” said Wittstruck.

Today, Farmway encompasses 37 locations in nine counties and includes 166 full-time employees, 2,700 voting members who are active producers and 4,500 non-voting members. In fall 2014, USDA named Farmway as 70th in the top 100 largest agricultural cooperatives in the United States, based on 2013 revenue and assets.

Dedicated to a Shared Vision

Farmway started in 1911, originally as petroleum cooperative called the Farmers Union Association. Throughout the cooperative’s early history, farmer owners drove expansion into new services and products, including purchases of cream stations, grocery stores and new elevators. In 1968, the cooperative expanded into Lincoln County with an elevator. As a result of a contest among members to choose a new name, the cooperative became Farmway Co-op.

More recently, Farmway’s investments have been driven by strategies developed by a group of employees. Twenty staff from bookkeepers to senior staff participated in five all-day sessions to develop the core values of: sharing profits and success, leading with innovative and customized solutions, developing professional and passionate employees and providing global market access. The overarching goal of these values, mirroring the early goals of the cooperative, is simply stated on the front page of the Farmway website: “Helping our owners succeed.”

Wittstruck explained that vision is upheld by a diverse board that ranges from young producers just getting started to decades-long veterans with valuable experience. She said the board helps Farmway stay focused on serving producers first and making sure the company “is not expanding without reason.”

Growing and Investing in the Community

Opportunities for growth and expansion, however, allow Farmway to invest in new infrastructure and services for their farmer-owners. In 2014, Farmway acquired three additional businesses: Bennington Oil Company, Esbon Grain and Fertilizer and the Hansen-Mueller grain elevators in Belleville, Scandia and Courtland.

Each acquisition was spurred by different reasons: a single owner looking for a local business to take over, a husband and wife who still work for Farmway but can now take vacation time and the chance to bring additional services to an existing customer base.

While the opportunities differed Farmway responded to each by not only purchasing an existing business, but investing in that new location to help it succeed. In Esbon, Farmway installed a 150,000 bushel bin plus a new load out bin – before wheat harvest started. In Courtland, Farmway installed three bunkers, two outbound scales and fixed the grain dryer. In Scandia, Farmway added a 20,000 bushels per hour leg as well as inbound and outbound scales.

“We are not here to make quick buck. We are here to help our producers and our community,” Wittstruck said.

Providing Reliable Resources

In addition to new infrastructure, Wittstruck explained Farmway also consistently invests in safety and continuing education for its employees. For example, Wittstruck said Farmway has invested $2.3 million in bin liners to protect worker safety as well as the services of structural engineer and hazard monitoring at all locations. Farmway also encourages their agronomists to maintain certified crop advisors certifications as well as a certificate of supervision from Wichita State University.

“We want to make sure we are a resource for our producers and make sure we are reliable,” Wittstruck said.

Even in times of low crop prices, Wittstruck said Farmway is investing farmer-owner dollars wisely to help them achieve the most yield bump at the least cost. For example, she said that while more farmers in the area are storing grain, the fees for member-owned storage are being directed to provide better infrastructure and technology like precision agronomy and variable rate technology to help farmers succeed in subsequent crop years.

The breadth of Farmway’s territory also helps farmer-owners with improved marketing opportunities. Wittstruck said with locations in nine counties, Farmway can spread risk and capture opportunities no matter where the rain falls or not.

The reward of that risk is being returned directly to Farmway’s farmer-owners. Wittstruck said this was the eleventh consecutive year that Farmway has retired equity, a decision based each year on the financial situation of the current year. During those 11 years, Farmway has returned a total of $6.5 million in retired equity, including $434,000 in 2015.

“We are here to stay,” Wittstruck said. “We are able to adapt and expand and compete and return profits and resources.”

Empowering and Encouraging

Wittstruck attributed Farmway’s success to dedication to the principles of the cooperative model.

“It is one of the most empowering and encouraging business models to be involved in,” Wittstruck said.

This year, to celebrate the cooperative business model during National Co-op Month, Farmway hosted a “coopertunity” day picnic with Farmway Credit Union and Rolling Hills Electric Cooperative in Beloit. Additionally, Farmway is currently holding a coloring contest for elementary school students, donating hamburger patties to local schools and conducting a food pantry donation drive challenge at all locations. In 2014, Farmway donated 2,000 pounds of items to seven local food pantries.

Activities like these demonstrate that even while Farmway continues to grow, the cooperative remains dedicated to the communities and farmers at the heart of its operations.

“We are a cooperative that has been here for more than 100 years. We are not looking to leave,” said Wittstruck. “This is Kansas. This is our home too.”