Expansion Tests Co-op's Determination

Tracy Gathman, Two Rivers Cooperative’s general manager, is quick to reference the wisdom passed on from agribusinessmen who came before him, specifically his father who spent more than 40 years working for a cooperative, and, in this instance, dairyman and longtime cooperative supporter, Nelson Gardner: “Cooperatives have to remember what they started out for: The purpose of a farmer cooperative is to enhance members’ income — and they should keep that at the top of their priorities list.”

Abiding by the truth of this statement has posed some unique challenges for the cooperative this past year. The source of this opposition was rooted in the cooperative’s decision to pursue an investment that would benefit its producer members, but conflicted with the views and opinions of the local community.

The folks at Two Rivers Cooperative open up about their experience and offer some advice to businesses looking to expand their operations.

Growing demand requires action

Two Rivers Cooperative was formed in 2001 as the result of a merger between two cooperatives, Otley/Monroe Cooperative and Farmers Cooperative of Pella, two Marion County staples since 1920. Today, the cooperative provides grain marketing, feed production, agronomy and petroleum services to its 520 producer owners — and 550 consumer accounts — in southern Iowa from its four locations: Monroe, Otley, Pella and Tracy.

For 35 years, the original Tracy-based operation was little more than a storefront housed in an old lumberyard downtown, but an influx of producer traffic from the Tracy area drove the co-op to consider making a greater investment in the unincorporated community, population 200.

“We monitored the grain being brought into Pella, and after looking at our existing storage facilities, it became obvious that we needed to expand our storage capacity,” Gathman says. “Pella was landlocked in a rather urban area; our only option was to start a new project.”

Upper management had been eyeing various locations near Tracy for five years, but none quite met their qualifications. As you go north out of Tracy, you run into the river bottom where most of the area goes under water during the spring and summer, making it difficult to find a proper location. Additionally, other sites were ruled out because the cost to deliver electrical services wasn’t economical.

In October 2010, an opportunity arose when a 100-acre farm became available at an estate auction. The board of directors came out to walk the site and, after the review of the flood zone (the 500-year flood zone ends about 200 feet behind the prime parcel), the Two Rivers Cooperative purchased it.

The property was divided; the farm was sold, keeping 19-acres for the cooperative. Shortly after, the cooperative hired Craig Hetland, “knowing management of this project was going to require full-time oversight.”

While this move was a practical decision for the cooperative, as word spread in the community, the project hit a few snags.

Community, municipal backlash

The property Two Rivers purchased lies 1/8 of a mile to the west of the county line between Marion and Mahaska Counties. The facility itself sits in Mahaska County; the roads needed to access the facility lie in Marion County. Unfortunately, as the cooperative discovered, the people of Marion County, including the supervisors and engineer, weren’t especially thrilled about the perceived increased volume of truck traffic they felt the elevator would produce.

Thanks to misinformation reported by a local newspaper, misinterpreting “axle traffic” with the amount of truck traffic, citizens were grossly misled on the amount of truck traffic the facility would generate.

“Grain was already flowing through the town, headed to a Cargill facility in Eddyville,” Gathman says. “No one knew what the counts were then and they don’t know what they are today. The press didn’t help. They misquoted the county engineer who mentioned the number of axles a year, and the paper turned it to 30,000 trucks a year. Then it turned to 1,200 trucks a week, when in actuality it would be that much in a year. The local press picked up on it, ran with it and asked questions later.”