Change is all around us and presents many challenges.
However, if you anticipate and manage for the inevitability that is change, it makes it much easier to achieve short-term success and long-term survival.
Being nimble in managing both your risk and your growth hasn’t always been considered a long-suited skill for cooperatives. Oftentimes, limitations due to cumbersome management structures or rigid bylaws have traditionally made cooperatives less likely to pursue an aggressive stance when it comes to growth.
Such is not the case with Gold-Eagle Co-op, in Eagle Grove, IA.
“Much of the credit goes to our board of directors who recognized that the face of our industry was changing rapidly,” says Brian Kelley, feed group manager, Gold-Eagle Co-op. “More importantly, the board and the management team understood that if we didn’t accept change and make the necessary adjustments, we would wither and die like so many other co-ops and independent operations.”
What is the vision?
Brad Davis is a thoughtful, soft-spoken person. But don’t let his calm demeanor lull you into thinking that he’s a soft touch. As general manager of Gold-Eagle, Davis has helped craft a vision for growth and survival based on a bold, aggressive defense strategy.
That strategy has positioned Gold-Eagle into being a major force to be reckoned with for grain marketing, feed manufacturing and energy production.
“Some of our moves could be viewed as being less than popular and controversial in the traditional sense of how a co-op ‘has always been run in the past,’ but the business landscape around us has undergone rapid change, too,” Davis recalls. “Our survival depends upon our ability to be decisive, quick and forward thinking. It was important then and it remains so today.”
A major part of the vision was to utilize the location of the operations as a springboard to succees.
Sitting squarely in the heart of one of the most prolific grain-producing regions in the world — the eight counties surrounding the plant in Goldfield, IA — the co-op could draw upon its ability to access a consistently bountiful supply of raw product. This was the critical base upon which Gold-Eagle would lay its foundation for growth.
Spawned by the merger of Farmers Elevator Company of Goldfield and Farmers Cooperative Company of Eagle Grove in 1983, Gold-Eagle Co-op spent the better part of the next two decades in an acquisition mode, merging with co-ops in Corwith, Renwick, Wesley and Titonka, among others. As the roster of locations grew, so did Gold-Eagle’s storage capacity and grain movement capabilities. Now armed with storage and its already active grain merchandising department, Gold-Eagle was properly positioned for the oncoming growth spurt.
“We were building momentum and staying true to the vision the management team and board of directors had set,” Davis says. “Now we just needed a way to put these assets to immediate use.”
Enter the integrators
As is sometimes the case, when the Wall Street investment community looks for an opportunity to infuse a market with cash, agriculture makes a good destination. Gold-Eagle was the beneficiary of that happenstance in the ‘90s when the move to integrated livestock operations, provided a good marriage between cash-hungry investors and feed-hungry livestock.
“What we had to offer these groups was access to grain and feed products so they didn’t need a great capital investment for on-site milling. It was a model that was tailor-made for us,” says Kelley.
However, it also meant some headaches for Gold-Eagle’s management team.
For some co-op patrons and interested observers throughout the area, taking on business outside the membership circle was a move that could be construed as divisive, and anti-co-op. Gold-Eagle realized it not only needed to be expert grain marketers and feed manufacturers, but needed to be good communicators as well.