CHS, Growmark Explore Collaboration

MT. JULIET, Tenn. (DTN) -- CHS and Growmark, two of the nation's largest farmer cooperatives, announced they're formally working together to "identify opportunities for the two cooperatives to further collaborate."

A CHS spokesperson told DTN leadership teams from CHS and GROWMARK will begin working on identifying potential opportunities right away, and the process is expected to take months, not years. The teams will review all available options, which could range from maintaining the status quo to a merger or anything in between. There are no pre-determined goals.

The company announced the conversations to be fully transparent with the cooperatives' member-owners. Once leadership has developed a plan for moving forward, input from co-op members may be a key part of an implementation, especially if the ultimate proposal requires a formal vote from ownership.

CHS is the largest farmer-owned cooperative in the United States, while Growmark is the fourth largest, according to the National Cooperative Bank.

"We believe that by working together we can better serve our farmer- and cooperative-owners. Ultimately, we aim to better meet customer demand for our owners' products around the world and increase the value of the cooperative system," said Jay Debertin, president and CEO of CHS, in a news release.

The companies highlighted their long-standing relationship, pointing to the formation of Cooperative Ventures, a venture capital fund focused on supporting advancements in breakthrough agricultural technologies, in 2021.

"Continuing our long history of adding value to our members and customers, while ensuring a strong and vibrant cooperative system for the future, is critical to the Growmark System," said Growmark CEO Mark Orr. "Our partnership with CHS in Cooperative Ventures is a great example of cooperation amongst cooperatives that benefits the shareholders of both companies."

Brian Briggeman, Kansas State University ag economics professor and director of the Arthur Capper Cooperative Center, said he's unaware of what CHS and Growmark are discussing. The Capper-Volstead Act, which allows co-ops to market farmers' commodities, contains limited exemptions to antitrust laws.

"No co-op is allowed to enter into behavior that is price fixing or leads to anti-competitive behavior. Those types of actions are not part of the limited exemption to antitrust laws," he told DTN in an email. "So as long as CHS and Growmark adhere to the Capper-Volstead Act, I would assume a collaboration would be allowed." A merger may require a more thorough legal review.In fiscal year 2023, CHS said its agronomy, grains, foods and energy businesses recorded record revenue of $45.6 billion.

Growmark, which owns the FS trademark that's common at its locations across the country, generated $14.6 billion in 2022.

DTN Ag Policy Editor Chris Clayton contributed to this report.

Katie Dehlinger can be reached at katie.dehlinger@dtn.com

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