MaxYield Cooperative, based in West Bend, Iowa, and NEW Cooperative, headquartered in Fort Dodge, Iowa, have entered into a unification study between the two cooperatives.
“In mid-December, I announced my intention to retire from MaxYield," says Keith Heim, MaxYield CEO. "Shortly after this announcement, the NEW Co-op board of directors reached out to the board of directors at MaxYield. They asked if MaxYield’s board would consider a joint board meeting to discuss if it would make sense to evaluate what a combined effort of two companies would look like.”
Heim says the MaxYield board discussed this request and unanimously agreed that the two cooperative boards should meet. A joint board meeting between MaxYield and NEW Co-op took place in late January and on January 29, the MaxYield board unanimously approved entering into a unification study.
“The two cooperatives are conducting a unification study to see what a combined effort would look like between MaxYield and NEW. That is all that has transpired to date. We are having frequent conversations with each other and expect that the study will be completed in March,” Heim said.
Another question that has arisen after this unification study was announced was if this study is motivated by poor financials at MaxYield.
“That is absolutely not the case,” Heim says. “Both MaxYield and NEW Cooperative are very financially strong organizations. MaxYield has had consistent local earnings, and in fiscal year 2020 we achieved the second best revenue in company history. Our balance sheet has never been stronger and our retained savings are nearly $67 million as compared to 1997 when they were ($122,242).”
Heim notes, however, that the agricultural landscape is changing rapidly.
“Agriculture and agribusiness will continue to change quickly," he says. "Technology, communication and investments in capital projects are leading drivers of this change. The Iowa agribusiness marketplace will look noticeably different in the next five to 10 years than it does today.”
Heim says the MaxYield directors have an obligation to members to explore opportunities that can be beneficial to its member-owners.
“The board has asked us to see what a combined entity would like for our members," he says. "Things like accelerating how equity is paid out, developing additional grain marketing opportunities, capitalizing on opportunities in the feed business that we don’t have today, along with evaluating and expediting capital improvements and accessing additional technology are among the many areas being explored in this study.”
The unification study and recommendations resulting from the study will be presented to both boards in late March.
MaxYield’s board will review the study’s results and decide on whether to take the unification proposal to the membership in the April to May timeframe.
Heim said if a unification proposal moves forward from the board, MaxYield’s members will receive that information in the mail in April.
“In addition to the member letter in April, we will host member unification information meetings in June and provide information about the potential next steps in this process.”
MaxYield’s membership will vote on the unification proposal if the unification proceeds to that point.
“If this proposal moves forward, any vote by MaxYield’s membership would take place in June,” Heim says.
About MaxYield Cooperative
MaxYield Cooperative is a member-owned, diversified agricultural cooperative founded in 1915 and is headquartered in West Bend, IA. The cooperative has 25 locations and three Cenex convenience stores in Iowa. MaxYield also provides grain origination and accounting services for three Iowa feed mills.
About NEW Cooperative
Formed in 1973, NEW Cooperative, Inc., with headquarters in Fort Dodge, IA, is a farmer-owned grain, agronomy, feed and energy cooperative with 39 locations serving 5,500 member owners throughout western and northwest Iowa.
