In-Grain: Great Bend Coop and Farmers Anticipate Robust Ag Economy as Harvest Season Nears

When Great Bend Coop Association general manger Frank Riedl visits with farmers these days, many of them are smiling. After all, commodity prices have been going up and up to record-setting levels on a regular basis for the last few months.

Nevertheless, many farmers have learned from a lifetime of ups and downs and fully understand their financial lives can change literally overnight.

“They are smiling but very cautious,” Riedl said in mid-March when wheat was at $12 a bushel. “This kind of thing has happened before. Then commodity prices will drop and input costs will go up. I would say they are skeptically optimistic.”

Many farmers haven’t been able to gain much benefit from the boom, either because of a poor crop last year or having to sell their grain before the huge jumps in prices, or both.

Crop Care – David Leroy and Frank Riedl stand in front of the Great Bend Co-op, 606 Main, in mid March. The two are optimistic about this year’s harvests given that wheat is up $6.8 a bushel over the amount it averaged the previous five years during the same period of time. Soybeans are up $4.6, corn $2.3 and milo $2.2 over the previous five-year average. While grain prices are at all-time highs, Leroy cautioned that record-high fuel costs factored into operational costs will temper profit margins for farmers.

“Many sold before the prices went up,” Riedl commented. “We have only about 10 percent in storage now. Many sold wheat in the $7 to $8 range because they needed to pay bills. They sold corn at $5 and soybeans at $5 or $6; beans are now $12 or $13. Producers didn’t reap a lot of benefit last year but they will this year.”

Many of those who were able to sell a decent crop at good prices have been paying off debt, Riedl noted. A few are buying new machinery and some are expanding. However, the oil boom has inflated land prices, which oftentimes discourages expansion. The next “however” on the list is that current low interest rates encourage expansion.

In addition, “producers’ input costs are tremendously high - fertilizer, fuel, chemicals,” Riedl said. “Fuel is up 40 to 50 percent over last year. Producers will be stressed this fall putting a crop in the ground.”

Through all the weather and price cycles, farming remains one of the biggest revenue generators in this area, Riedl added. And when farmers have money, they usually keep it in circulation.

“This town benefits from the farm community,” Riedl said. “We may not be feeling it yet but we will in the next few years because of grain production and livestock. The last 10 years haven’t been the most profitable and equipment needs to be replaced. This will give them the opportunity to do that.”

The Great Bend Coop, 606 Main, has been serving area farmers’ needs since 1959 when first-year sales were under $1 million. That figure has grown to $82 million, said Dennis Neeland, operations manager.

Of the Coop’s 67 full-and-part-time employees, 40 of them work in Great Bend at the Main Street location and the Fertilizer and Petroleum Division at 323 S. U.S. 281; the others staff sites throughout the Golden Belt. The Coop’s annual payroll is $2.8 million.

“The average staff and management tenure is 20 years,” said Neeland, a 32-year veteran. “This shows that our employees have been around long enough to understand our customers and their needs. They are a professional group.

“Our employees also contribute back to the community,” Neeland added, noting their service on many boards and committees for entities such as chambers of commerce, school districts, Barton County Community College and Barton County Extension.

Coop’s history includes a list of purchases and mergers, resulting in a presence in eight communities with a 7-million-bushel storage capacity. Neeland outlined the history.

• Merged with the Ellinwood Coop in 1973
• Bought the Boyd Elevator in 1974
• Bought the elevator at 16th and Kansas in the early 1980s
• Merged with Farmers Grain, Fuel and Livestock at Pawnee Rock, Albert and Dundee in 1995
• Bought the Walnut Creek Mill Elevator in 1995
• Merged with Radium and Seward in 2001

The layman may think the Coop is available only to farmers who bring their grain to town for storage and sale. The layman is wrong.

Yes, it does handle farmers’ commodities but it offers many other products and services as well. The Great Bend Coop has one of the few area feed departments, a growing seed department, and one of the largest fertilizer and chemical departments in the area.

The bulk fuel division is also active. It has fueling sites at the Great Bend Ampride, Ellinwood, Albert, Pawnee Rock and Radium.

“We are also in the process of building one here,” Neeland said about the 200 Main location. “It will be a state-of-the-art, unmanned card system for fueling.”

This new facility will open within several months.

The Great Bend Coop Farm Store is open and available to anyone; a patron does not have to be a Coop member to trade at the Coop. The Farm Store carries livestock equipment, and lawn and garden products. It is the only place in the area that sells bulk garden seed.

“Customer service is what it is all about,” Neeland commented.

At each of the Coop’s locations, safety precautions and environmental stewardship are crucial.

“Our whole game plan is safety and taking precautions because of the chemicals we use,” general manager Riedl said. “We are good stewards of the environment. We are proactive in making sure our facilities are safe and secure. We keep up with all rules and regulations to protect water and the environment.

“We all live here,” Riedl continued. “And we want to protect our kids.”

One of the Coop’s most recent ventures is a minor investment in Kansas Ethanol LLC, an ethanol plant scheduled to go into production May 1 near Lyons.

“We looked at trying to develop one here several years ago,” Reidl recalled. “Back then, the lack of a Class I railroad was the reason it wasn’t economically feasible. The government mandate changed so that is not the reason any more.

“We are grain deficient here, believe it or not,” Riedl said. “We are deficient because of the local feedlots that consume our grain. They bring a lot in from Nebraska too. Lyons has more grain” to accommodate the ethanol plant.

ICM built the ethanol plant and Riedl pointed out the company has enjoyed success all over the country.
           
The Coop’s 1,400 members own the organization and many of them have been involved for decades. They live all over the United States and own land in this area.

The progressive seven-member board of directors, chaired by David Leroy, governs the Coop. Leroy has served on the board for six years, one of those as chairman. Like Riedl and Neeland, he sees first hand the Coop’s important role on the farm and in the community.

“It employs a lot of people and is a revenue producer,” Leroy commented. “A lot of farmers rely on the Coop for supplies and a place to take their grain. This is why it was founded in the first place and it is still doing it.”

Leroy also noted the high grain prices and their effect on local and area farmers. “People are excited but also nervous,” he said. “It is harder to decide when to sell and mistakes get magnified. It is like moving from a low-stakes to a high-stakes poker table.”