Kansas Grain Cooperative Celebrates 100th Year

June 6, 2015 07:00 AM
Kansas Grain Cooperative Celebrates 100th Year

Little remains of this Kansas town, but its mainstay - a grain cooperative - has lasted for a century.

It was wheat harvest when a group of Cairo-area farmers saw the opportunity to increase their returns if they joined together to market their wheat. On June 18, 1915, the group formed Cairo Cooperative Equity Exchange, The Hutchinson News reported.

Their first action was to buy out a small private elevator belonging to E.B. Sitton with a capacity of about 3,500 bushels.

One hundred years later, the goals of the cooperative, now with locations in Kingman, Pratt and Reno counties, are the same, though its members are looking for ways to do it more efficiently.

Cairo announced in May that it had purchased ownership in western Kansas grain company Skyland Grain, which Cairo Board President John Steffen said he hopes will improve purchasing power, better day-to-day efficiency and provide needed capital for the cooperative to update its aging facilities.

"We are trying to position ourselves so we have good facilities for our patrons to use in the future," Steffen said. "We want a good, safe facility that everyone can use that gets farmers back into the field quickly."

There will be no name change for Cairo. The cooperative will continue to own its original facilities while still being part of the larger Skyland Grain joint venture and operating its facilities under the Skyland Grain name and Southwest Fuels name for Refined Fuels and Oil.

"Our vision for the Cairo Co-op was to create a stable and progressive future for our company. By becoming an owner of Skyland Grain, we are able to position the company to meet the long-term needs of our members, while improving facilities and maintaining profitability," Steffen said.

David Cron, Cairo's chief executive officer, said he listened to the goals of Cairo's board about the cooperative's direction during meetings. He soon realized what they had outlined was similar to the structure and vision of his previous employer - Skyland Grain.

Cron, stationed in Cunningham, again serves as Skyland's chief executive officer.

Cron said the new venture is a boon for both groups. Cairo will have better efficiency and profitability, along with access to capital. Cairo also will have access to specialized staff that a mid-sized cooperative might not be able to afford.

For Skyland, it is an opportunity to grow and reach farther east and manage weather risk. It also gives Skyland the opportunity to arbitrage for grain.

Cairo can store 3.9 million bushels in nine locations across south-central Kansas: Cairo, Cunningham, Preston, Turon, Penalosa, Brown Spur, Arlington, Waldeck and Calista. The company serves producers with grain, fertilizer, seed and fuel needs.

Skyland Grain, which began in 2004, is a joint venture owned by Johnson Cooperative Grain Co., ADM Grain Co. and the Syracuse Cooperative Exchange.

Skyland has a storage capacity of about 31.1 million bushels with elevators in eight Kansas communities: Syracuse, Kendall, Big Bow, Johnson, Manter, Saunders, Elkhart and Rolla. It also operates three grain elevators in Colorado.

Cairo Co-op has up to 18 percent ownership in this new venture.

Facing the challenges presented by aging facilities that were constructed in the 1950s, Cairo already has built two new elevators the past several years, said Steffen. In 2005, Calista South was built with a capacity of 300,000 bushel capacity. In 2014, a new facility was built a half-mile north of Preston. It has 600,000 bushel capacity with 40,000 bushel per hour legging capabilities.

Looking back, Cron said Cairo has made a lot of tough decisions over the past century to keep viable and to grow.

"This move probably helps ensure Cairo will be here another 100 years," Cron said.

"We feel this is the best thing we can do for Cairo's future," Steffen said. "Our job is to take care of the patrons - that is what we are elected for - and we feel like this is the best way to do that."--Amy Bickel, Hutchinson (Kan.) News

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