Better Marketing Opportunities For Farmland System Grain
Broader Grain Merchandising Services Provided To Members, Customers
KANSAS CITY, Mo., May 19 /PRNewswire/ -- Today, Farmland Industries, Inc.,
announced that it is forming a grain-based alliance with ConAgra, Inc.
(NYSE: CAG). Based in Kansas City, Farmland Industries is North America's
largest farmer-owned cooperative, while Omaha-based ConAgra is the country's
largest independent food company.
The unique alliance includes two entities. The first is Concourse Grain,
LLC, an organization created to improve the position of wheat moving through
the Farmland System. The second involves joint ownership of ConAgra's Atwood-
Kellogg subsidiary, which will provide grain merchandising services to members
and customers.
Concourse Grain, LLC will market wheat originated by Farmland and certain
wheat originated by ConAgra, thus providing both domestic and global wheat
consumers access to multiple classes of wheat. International consumers will
be served from multiple export points across the U.S. In addition, Farmland
purchased a 50-percent stake in Atwood-Kellogg, which will be re-named
Farmland-Atwood, LLC. This entity will function as an independent provider of
risk management, financial and grain support services and grain brokerage.
"This development reflects the new market-driven grain business," said H.
D. "Harry" Cleberg, Farmland president and chief executive officer, referring
to rapid changes in grain marketing brought about by the Freedom to Farm Act
and the diminishing role of the federal government in exported grain. "We
must now be prepared to deliver precisely what the global grain consumer wants
in order to strengthen our members' grain business for the long-term.
"Concourse Grain LLC will be fully operational for the major portion of
this summer's hard red winter wheat harvest which is only a few weeks away,"
Cleberg said.
Cleberg said the alliance with ConAgra came after nearly three years of
studying the future of grain marketing and meeting with numerous prospective
partners. He also said the alliance could be the first step in developing
additional relationships in the future.
The alliance is one of the most significant enhancements to Farmland's
grain business since it merged with Enid, Oklahoma-based Union Equity
Cooperative, six years ago. That merger gave Farmland a strong role in
marketing hard red winter wheat through its export facility in Galveston,
Texas. Five years ago, Farmland acquired Tradigrain, the cooperative's
international grain trading subsidiary, further strengthening its position in
the international grain market. Cleberg said the new grain marketing
environment compelled Farmland to address the reality that flour milling
customers domestically and globally expect access to all classes of wheat from
multiple shipping points.
"In addition to Galveston, Farmland System wheat can now move
internationally through export facilities in the Great Lakes or the
Mississippi River. We will also have the opportunity to export it through
ConAgra from the Pacific Northwest," Cleberg explained. "And we can deliver
it with other classes of wheat, providing the one-stop shopping so many
customers demand."
"Meanwhile, ConAgra will benefit from greater utilization of its port
facilities and better access to hard red winter wheat," said Fred Page,
president of ConAgra Grain Companies.
"This is a unique alliance for ConAgra. We believe both parties stand to
gain by working together where it makes sense," Page said.
Concourse well-positioned for export market
In forming Concourse Grain, LLC, Farmland will lease to Concourse its
Galveston, Texas. and Hutchinson, Kan., elevators, and ConAgra will lease to
Concourse its St. Elmo, La., and Superior, Wis., elevators. ConAgra and
Farmland will each retain ownership of their respective facilities, but
Concourse will assume full operating and management control.
Concourse Grain will be based in Omaha, Neb., and its staff will consist
of employees coming from Farmland and ConAgra. The company will be governed by
a board of directors with equal representation from both parent companies.
Service Offerings
John Berardi, Farmland executive vice president and chief operating
officer of Grain and Grain Processing Businesses, noted that the ownership of
Farmland-Atwood by Farmland and ConAgra would extend benefits of the new
alliance beyond wheat.
"Farmland-Atwood will allow us to offer a competitive services program of
financial and risk management for the convenience of our members and
customers," Berardi said. "We also envision that Farmland-Atwood could
facilitate sales of Farmland System feed grains and soybeans to some of
ConAgra's food businesses providing a major marketing avenue for our members
feed grains and soybeans."
Farmland-Atwood, LLC will be headquartered in Kansas City. Berardi
expects to announce the management team within the next few weeks.
ConAgra, Inc., based in Omaha, Neb., is the largest independent food
company in the United States, with annual sales of about $24 billion.
ConAgra's independent operating companies market more than 70 brands that
include Healthy Choice, Wesson, Hunt's, Banquet, Van Camp's, Orville
Redenbacher's, Marie Callender's, Armour, Peter Pan, Butterball, Swiss Miss
and La Choy. Additional information on ConAgra is available at
http://www.conagra.com.
Farmland Industries Inc., Kansas City, Mo., is the largest farmer-owned
cooperative in North America and one of the top 200 companies included in the
Fortune 500. In 1997, company sales of $9.1 billion encompassed all 50 states
and 80 countries. When including third-party sales of Farmland's venture
businesses and the gross sales of its international grain marketing
subsidiary, total sales exceeded $11.7 billion. Additional information on
Farmland is available at http://www.farmland.com.
SOURCE Farmland Industries Inc.
 back to top
Related links:
http://www.farmland.com
CONTACT:
Sherlyn Manson, Corporate Communications of
Farmland Industries, 816-459-6230
|
