Articles > Landus Optimization Network: Frequently Asked Questions

Landus Optimization Network: Frequently Asked Questions

Jun 09, 2021

What is Landus Cooperative and where is it located?
Landus is a farmer-owned agricultural cooperative headquartered in Ames, Iowa. They employ about 600 full-time employees at locations in more than 60 communities to serve their 7,000 farmer-owners. They are Iowa’s largest agricultural cooperative providing unmatched scale, expertise, facilities, and logistics. Their products and services span the five pillars of agronomy, grain, feed, animal nutrition, and data. For more information, visit LandusCooperative.com.

How does the Landus optimization model work?
Landus first announced in April 2021 an innovative alternative to traditional mergers and acquisitions for agriculture retail. Participating companies maintain autonomy, preserve local community presence, and enhance farmer relationships while participating in a shared platform of strength. This new model is designed for collaboration and optimization on grain, feed, soybean processing, agronomy, data, technology, logistics, and back-office functions. It also provides the opportunity to maximize capital investments, infrastructure capacity, and employee talent.

Is United Farmers Cooperative merging with Landus Cooperative?
No, United Farmers Cooperative is not merging with Landus Cooperative. Rather, United Farmers Cooperative will strategically share resources with the Landus Optimization Network in order to better serve member-owners by leveraging the size and scale of the group and accessing additional markets across the country.
 
Does United Farmers Cooperative have future plans to merge with Landus Cooperative?
The arrangement of a future merger is outside of the scope of this agreement. United Farmers Cooperative is not legally obligated to consider a future merger with Landus Cooperative nor any other organization within the optimization network.
 
Does this prevent a merger with someone outside the optimization network?
No, this agreement does not contractually prohibit UFC from merging with an outside organization. UFC is always open to exploring opportunities that are in the best interest of member-owners.
 
How is the optimization model different from a traditional merger?
Unlike a traditional merger, United Farmers Cooperative and Landus Cooperative will continue to operate as independent cooperatives as part of the optimization model. All UFC patron-facing details will remain the same: who we are, our mission and values, the locations in which we operate, our employees, the core business divisions, etc. will all remain the same. Behind the scenes, United Farmers Cooperative will share resources and assets with the optimization network. Rather than competing against each other, this innovative model will allow participating businesses in the optimization network to compete more globally. In turn, this will generate more opportunities and more value for our member-owners and the communities we serve.
 
What other businesses are participating in the optimization network?
The optimization network allows United Farmers Cooperative access to sophisticated businesses across the nation; all of which have a diverse, competitive offering. Through the optimization network, United Farmers Cooperative has the opportunity to share resources, capitalize on new markets, buy more efficiently and, most importantly, deliver better results for our member-owners. In addition to Landus Cooperative, these are the current businesses United Farmers Cooperative is proud to be partnering with:
 
NuWay K&H Cooperative
  • NuWay-K&H Cooperative is a local, farmer-owned, customer-focused company supplying agronomy and energy products and services. With the main office based in Clear Lake, IA, principal place of business in Trimont, MN and operations based in Welcome, MN. NuWay-K&H Cooperative employs over 85 people full-time and 50 seasonal employees who serve in excess of 5,500 farm and non-farm customers. Learn more at www.nuway-kandh.com.
Snittjer Grain Co.
  • Snittjer Grain is a private, family owned grain elevator company which operates in the heart of Iowa's grain belt; Wellsburg, Iowa. Snittjer Grain Co. is a grain only company which focuses on merchandising grain through value chain to feed mills, ethanol plants or through exports. Learn more at www.snittjer.com/about.
CornBoard Manufacturing
  • CornBoard is a green wood alternative made from a biomass residue, corn stover.  CornBoard’s founder, Lane Segerstrom, is an Iowa native. The organization has production facilities in Odebolt, Iowa and Stratford, Texas. CornBoard is produced by taking an overabundant and underutilized biomass material from the corn stover and turning it into a building material that is an economical and an environmentally responsible alternative to pressed wood products. The process to make CornBoard was developed, refined and patented by leading researchers at the University of Illinois.
Does this agreement only apply to all facets of UFC?
All divisions and administrative staff of United Farmers Cooperative will benefit from this agreement. Because United Farmers Cooperative is pooling resources and leveraging economies of scale alongside others in the optimization network, all divisions will have access to new opportunities including information technology, human resources, marketing and legal departments.
 
When will the optimization agreement be finalized?
This agreement is now in effect.
 
How does this model benefit member-owners?
United Farmers Cooperative’s mission is to unite member-owners with products, services and resources necessary for long-term success. Through UFC’s partnerships with the optimization network, we are taking our mission to the next level. In today’s market, it is becoming increasingly difficult to compete due to the size and scale of other organizations coming together. This strategy unites innovation and collaboration, and will allow UFC member-owners access to additional resources, new opportunities and, most importantly, help member-owners be more competitive on a national and global scale.
 
Additionally:                                                                                                                                       
  • Locally nothing changes! There are no changes for the employee base nor the customer base that takes a lot of time and coordination to get used to. Business continues as usual! Goal of optimization is to create high level efficiencies that translate into local profit.
  • Increased margins on agronomy from procurement efficiencies, and product offerings. 
  • Find solutions to increase volume to weigh down fixed cost for optimization partners.
  • Increase in CN/CP rebates. Leverage size and scope to push higher incentive value.
  • Market intel and market creation on grain.
  • Feed ingredient procurement.
  • Back office synergy creation - Use the combined strength of all companies HR, IT, Legal, and safety to minimize overhead cost. 
  • Innovation Center, located in Ralston, IA - Goal is to look out 10 years to the future of agriculture and disruptive technology.
  • 100 acres of plots to demo sustainable farming practice, new age products, and other technologies.
  • Will be open to optimization partners and their farmer-owners.
How will current UFC employees be impacted?
The success of this collaboration is dependent upon the employees of UFC, and we are fortunate to have highly skilled and qualified individuals to help execute this collaboration. Moving forward, all employees will continue in their current positions. Within their current positions, they will begin working with cross functional teams within the optimization network to implement systems and processes that benefit our member-owners. This is a great opportunity for our employees to further their professional development and be part of a strategy that will have a positive impact on UFC territory for generations to come!
 
Do UFC members support this decision?
The decision to participate in the Landus Optimization Network was approved by the UFC Board which is elected by the co-op’s members.
 

 


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