Farmer Cooperatives Announce Plans To Merge

The board of directors of Southern States Cooperative and Michigan Livestock Exchange have approved plans to merge their farmer-owned cooperatives, subject to a vote by the MLE membership. Final approval would combine the livestock marketing strengths of MLE with the farm supply strengths of Southern States.

MLE, headquartered in Lansing, Michigan, is an innovator in developing alliances with processors, cattle feeding, direct marketing sales desks, auctions, order-buying, and video marketing. Last year MLE marketed some three million hogs and 60,000 cattle for its members, for a total value of about $750 million. In addition, through its finance company, MLE provides facility financing for farmers, as well as dairy and beef animal leasing programs.

Southern States, with its headquarters in Richmond , Virginia, is the major supplier of farm inputs, including feed, seed, crop protectants, fertilizer, farm supplies, and petroleum in the states of Virginia, Kentucky, West Virginia, Maryland, Delaware, and North Carolina. Southern States' fiscal 1997 business volume was $1.216 billion, with earnings of $33.5 million, $17.5 million of which was returned to its members in the form of patronage refunds.

Under the proposed merger, Michigan Livestock Exchange would become the Livestock Marketing Division of Southern States, operating as an allocation unit for purposes of patronage refunds, just as the Grain Marketing Division operates today.

The Southern States Cooperative board of directors would be expanded by one seat, allocated to an Indiana, Ohio, and Michigan election district. Further, a producer board would be established for the new division to assist in identifying new opportunities.

In addition, the MLE subsidiary, Michigan Livestock Credit Corporation, would be merged into a subsidiary of Statesman Financial Corporation, which is owned in part by Southern States. The MLCC's financing programs would be maintained and expanded as opportunities occur.

"Clearly, the directors and management of both organizations see the opportunity for synergy that will be good for their farmer-members," said Wayne Boutwell, Southern States' president and CEO. "The addition of MLE to Southern States will create a system that allows farmers, through their cooperative, to work with others in the food chain to efficiently create products that meet the needs of consumers, while at the same time enhancing farm income."

Tom Reed, president and CEO of MLE, said, "Joining together with another producer-owned organization strengthens our farmers' ability to assure that this and future generations of farmers will have the opportunity to be successful and continue to be an integral part of the emerging food system."

Reed would be joining Southern States as vice president of the new livestock marketing division.

About the Author

Tim Brockhoff

Tim Brockhoff was Staff Writer of The Horse:Your Guide to Equine Health Care from 1995 to 1999. His degree is in Agricultural Communications from the University of Kentucky, and his equine experience is with American Saddlebreds.

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