Member Newsletter, August 2016 Issue - Amazon S3 · Member Newsletter, August 2016 Issue Our First...

Member Newsletter, August 2016 Issue

Our First 100 Days, a Letter from the CEO - p. 3Membership “Synergies” Gained - p. 6Your Invitation to Our Research Plot Showcase - p. 10‘‘We Are Landus Cooperative’’ - p. 12

2 | Landus Cooperative

RESOURCES

Our First 100 Days, a Letter from the CEO ...............................3Meet Landus Cooperative’s Board of Directors .......................4Introducing Landus Cooperative Executive Team ...................5Membership “Synergies” Gained in Our First 100 Days ........6Membership Equity Update from the CFO ................................7Landus Cooperative Kicks Off Asset Review for Safety and Compliance Needs .............................................................8Your Invitation to Our Research Plot Showcase ......................10Check Out LandusCooperative.com .......................................11We Are Landus Cooperative .....................................................12Introduction to Our Name and Logo ........................................14

Member’s EquityDan Beenken • (515)817-2127 [email protected]

Amanda Rezac • (712)667-3384 [email protected]

CreditMark Bluml • (712)667-3354 [email protected]

Sharon Powers • (515)544-9030, ext. 3145 [email protected]

Ames Main Office(515)817-2100

For more information about Landus Cooperative, please visit: www.LandusCooperative.com

Contents:

In 2008, West Central celebrated its 75th anniversary with a hard-cover history book. This 184-page, coffee table book is available free of charge to any Landus Cooperative member by contacting Crystal [email protected] or (712)667-3352

Editorial Team:Mari Kreft • (712)[email protected] Heun • (712)[email protected] Huffman • (712)[email protected] Cornelius • (712)[email protected]

On the cover, Eric Johnson, Field Sales Agronomist at the Leland location.Learn more about his role as a member and as an employee in our story on page 12.

StatementsCustomers will continue to receive separate statements for several months from the legacy West Central and legacy FC accounting systems until our back-end IT and Accounting sytems are merged.

A majority of our location and operational staff will report through Area Operations Managers who will report to the Chief Operating Officer (yet to be named).

Left to right: Rick Haase-Rake, Jay Sturtz-Jefferson, Brett Carlson-Farnhamville, Brad Woodard-Atlantic, Chris Nation-Perry, Scott Anderson-Bradford

Introducing our Area Operations Managers

Landus Cooperative | 3

Our First 100 Days, a Letter from the CEOAs this newsletter reaches your mailbox, Landus Cooperative will have passed our 100th day as a unified farmer-owned organization. Overall, the transition and first stages of integration have been positive and as planned.

Field Structure Realignment of our operational and sales reporting structures occurred in June. In general, your location continues to be staffed by the same people with which you are used to working.

However, internally, Landus Cooperative’s day-to-day operations are now managed in an Eastern and Western division (generally, carving a line down Hwy 169 with Area Operations Managers (see page 2) overseeing geographic areas with each division to help keep decision-making as local as possible. Sales and Operations Reporting We have separated reporting roles for the Field Sales Agronomists, Grain Marketing Advisors and the location operational staff. While they report to separate leadership internally, their have one goal…to work together for your operation. This is a change for both legacy organizations as we move forward to find the best way to do business. We will carefully evaluate this structure. I am eager to get our members’ input in coming months on how things are going across the territory.

Information Technology Systems Merging two accounting and computer systems continues to be our largest challenge.

STATE OF THE COOPERATIVE

by Milan Kucerak

My Forward Focus for Your Organization1) Creating Our Culture. I am personally committed to our employees. They are our #1 asset and our long-term strategy involves building training and development programs to ensure our team is best in class. We want the right people in the right roles who have the desire and skills to serve your farm.

2) Trust. We kicked off the summer with employee meetings in all areas to share our cooperative strategy. As we merge “how we used to do it” with “what we need to do going forward” our employees must trust each other so we can improve. You, as a customer, must trust that we will deliver on our promises.

3) Senior Team Rising. While being the biggest is not our focus, we ARE the 7th largest grain company in North America by storage capacity. Management has been challenged to “up their game.” What got us here, won’t be enough going forward to be successful.

If your Field Sales Agronomist makes the sale and operations can’t deliver,

you, as the customer, suffers. Likewise, if we gear up operations and your agronomist isn’t ready with your

order, then the process is not working.

Functionality.

Today, those who did business with both legacy companies may be receiving three separate state-ments. This is an interim solution.

April 1, 2016

Bringing systems together.

We aim for a single, functioning system.

12-18 months

Building the best of the best.

With customer input, we want to offer one, easy to understand

statement and online tools.your business demands.

18+ months

Phase 1 Phase 2 Phase 3


BOARD OF DIRECTORS

Meet Landus Cooperative’s Board of Directors

In one of their first acts of business as a newly merged entity, the Landus Cooperative Board of Directors elected officers during their board meeting April 5, 2016. With nominations from the floor and a majority-wins vote including all eighteen board members present, John Scott, an Odebolt, Iowa-area farmer was elected President of the Board of Directors for

Landus Cooperative. Jordan Carstens, a Bagley, Iowa-area farmer was elected Vice President and Dan Reynolds, a Rockwell City, Iowa-area farmer was elected as Secretary/Treasurer of the Board.

“As a member of Landus Cooperative, I am first and foremost pleased that we have such a talented and experienced board. Personally, it is an honor to be elected by my peers to represent our farmers,” said John Scott. “Going forward, our Board will focus on capitalizing on opportunities and doing the right thing to benefit our members.”

Sue Tronchetti of Paton, Iowa; Sam Spellman of Woodward, Iowa; and Jim Carlson of Gowrie, Iowa; along with John Scott, Jordan Carstens and Dan Reynolds will form the executive committee of the Board. Per the Articles of Incorporation voted on by the membership, the Landus Cooperative Board of Directors includes the members listed above and the year their current term expires.

Several additional committees were named. The full list is online at www.LandusCooperative.com and available at Landus Cooperative locations.

As set out in the plan of merger and approved by the voting membership, the first election for new directors is slated to be held in 2017. The number of directors thereafter may be changed pursuant to the terms of the Articles of Incorporation and Bylaws. Except as determined under the plan of merger, board members serve three-year terms, with a limitation of four consecutive terms.

Introducing Landus Cooperative’s board members with their hometowns and term expirations. Front Row: Daniel Heller, Irwin (2018), Craig Heineman, Ogden (2017), Jim Long, Maxwell (2017), Daryl Doerder, Boone (2017), John Scott, Odebolt (2019), Sue Tronchetti, Paton (2019), Matt Showalter, Hampton (2019), Nate Stewart, Cedar Falls (2017), Sam Spellman, Woodward (2018). Back Row: Jay Drees, Manning (2018), Glen Christensen, Scranton (2019), Gary Graber, Forest City (2018), Dan Reynolds, Rockwell City (2017), Jordan Carstens, Bagley (2019), Trent Farnham, Gowrie (2018), Tim Kolder, Ackley (2018), Jim Carlson, Gowrie (2019), Not Shown: Darrell Jen-sen, Menlo (2017)


EXECUTIVE TEAM

Milan KucerakChief Executive Officer

Mark CullenAnimal Nutrition

Chief Operating Officer

Introducing Landus Cooperative Executive Team

Roger FrayCommodity Marketing

Janelle ThomasHuman Resources

Mark MinerChief Financial Officer

Dave WagnerInformation Technology Marketing & Communications

Rick VanderheidenStrategy

OPEN POSITION

OPEN POSITION


MEMBERSHIP SYNERGIES

Membership “Synergies” Gained in Our First 100 Days

That’s the additional revenue for one unit car of soybeans (1.6 million bushels) going to the Gulf Coast as a result of leveraging our large fleet with the rail lines and end-buyer in one spring sale of members’ grain.

~$500,000Immediate annual savings in interest and fees by combining accounts with CoBank.

Greater Returns to Our MembersReinvest into local assets

Pays down cooperative debtOffers additional patronage opportunities

Sept 1, 2016September 1, 2016 is the beginning of our first fiscal year as Landus Cooperative.

$0.05per bushel


Annual Patronage Timeline For Landus Cooperative

Landus Cooperative Equity Balances To Be Sent to All Members We are merging all equity accounts into one, unified system on a dollar for dollar basis. The equity you had in your former cooperative remains under Landus Cooperative. All active (voting) members should expect to receive a statement of your equity balance for Landus Cooperative on, or around, Sept 1. 2016.

Your Membership Class A Share Transitions Seemlessly Landus Cooperative, like most farmer-owned cooperatives revolves (i.e. pays out) equity from oldest to newest. As Landus Cooperative’s Board of Directors built the merger agreement and Articles of Incorporation, every effort was made to benefit members in the stock transition process.

A new Landus Cooperative Class A membership share costs $500.

FC Members: When you joined, you paid $1,000 for your Class A membership share. $500 worth of equity will added to your OLDEST year of equity so those dollars will be revolved out the soonest, giving you the quickest access to the additional $500.

West Central Members: When you joined, you paid $100 for your Class A membership share. The additional $400 needed will be transferred from your NEWEST year of equity and transferred into your Class A share. This means you see the least amount of impact for the longest amount of time possible. You do not need to pay the additional $400 as cash, check, etc.; we will manage the additional dollars needed for you inside your equity account.

If you were a member of both cooperatives, you paid a total of $1,100 for your shares. $500 will be transferred into your Class A membership share and the remaining $600 will be added to your OLDEST year of equity.

MEMBERSHIP EQUITY INFORMATION

Final Patronage/Equity Payments Made Under Former CooperativesIn July, members received their final equity or patronage allocation from FC and/or West Central.

Going forward, Landus Cooperative will be combining members’ equity.

Fiscal Year Ends

August 31Patronage Determination

Late OctoberPatronage Checks Distributed

January 2017

With approval by the Board of Directors, former FC members are receiving deferred dividends totaling $605,000. Please note, deferred dividend allocations are NOT considered taxable income.

West Central’s last fiscal year ran from Sept. 1, 2015 to March 31, 2016. Your business transactions with West Central as a member during that stub fiscal year have earned a patronage allocation, which is being distributed as a qualified dividend and as 100% cash. Please note, qualified patronage allocations are considered taxable income.


SAFETY AND COMPLIANCE

The first stop of the review process starts at the office, followed by outside operations, agronomy, and feed areas of each location. Chris Hippen talks about the 2009 office addition, and some issues with the Kesley office building. Tim Sullivan, Vice President of Safety,documents her comments as part of the company-wide asset review underway.

Landus Cooperative is committed to customer service. One of the best ways to serve our farmer members is with up-to-date, safe and in-compliance facilities.

“When I became CEO of legacy West Central, one of the first things I heard about was equipment that was out of date or not safe. Employees were worried and wanted to do something about it,” said Milan Kucerak. “I asked for a detailed list of every single item at every location that needed to be fixed, replaced or demolished for better service or employee safety.”

Kucerak said he was surprised that the legacy West Central project list was a long as it was.

“For 22 locations, West Central had 175 items ranging from new pylons, costing $50, to a new central dust system for more than $100,000,” he said.

This spring, Landus Cooperative began an in-depth review of legacy FC locations which join a list of “safety, compliance (OSHA, DNR, etc.) and demolition” project items already in place for legacy West Central.

The goal of the process is to make a list and then prioritize all the ways the company needs to make property upgrades to improve operations for safety, bring facilities into compliance, or demolish property that is not able to be updated to meet industry and company operation and safety requirements.

Some of the examples include replacing outdated technology with more modern and lower risk equipment. The internal review team is looking at everything from mechanical, electrical and structural needs.

“With the list in hand, we can recommend a solid, data-backed blueprint for where we need to invest capital from our members on behalf of our members. That is the cooperative model,” said Kucerak.

“This process may lead us to the decision that we need to close locations that can be better served with a brand new facility or an upgraded neighboring one,” said Kucerak. “Closing a location is never an easy choice. We don’t take those decisions lightly and will use a methodical, thoughtful approach to be fair to our members.”

Landus Cooperative Kicks Off Asset Review for Safety and Compliance NeedsInternal review creates “data-backed blueprint” to determine future of locations


Standing in the hoop building at the Kesley location, Lance Ibeling, Grain Superintendent, explains to Tim Sullivan, Vice President of Safety; Barney Bartels, Vice President Operations-West; and Janelle Thomas, Chief Human Resources Officer, that the hoop building can hold more than 557,000 bushels of corn.

Kucerak noted that any decisions for closing locations must be approved by the Board of Directors and a transparent communication plan will be in place when and if those decisions are made. “We want our employees to hear it straight from the horse’s mouth and our customers to be notified in a timely fashion by their trusted location staff,” Kucerak added.

Over the course of the last few weeks, Tim Sullivan, Vice President of Safety, has been working with area operations managers and location managers to identity areas of concern or need.

Once the tours conclude, the location tour notes will be recorded in one master list.

Then, location managers, area operations managers and superintendents will help to prioritize that master list. Safety items will be given highest priority, and compliance second highest. Estimates for work will be done, budgets reviewed/approved (including board approval) and then execution of the recommended work will commence. The overall timeframe for list creation, prioritization, and then work approval may be several months.

Lance Ibeling, Grain Superintendent, points out to the review group that bin #13 at the Kesley location has some foundation/floor issues that have been tarred and repaired repeatedly as part of the safety and compliance review process.


RESEARCH PLOT SHOWCASE

You Are Invited to Our Research Plot Showcase on August 23rd


CHECK OUT LANDUSCOOPERATIVE.COM

Read daily grain comments from our dedicated Grain Marketing Advisors.

New each week is a 3-minute video highlighting what you need to be on the look-out for on your acres.

Link back to legacy FC or West Central websites to log-in to your account. A unified log-in system will be online once all back-end accounting and IT systems have been merged. Read more on page 3.

Get contact information for our locations.

Apply online for full or part-time positions. Grain bids


We Are Landus Cooperative

Cindy Baudler: “We’re Open to Change”

A mix of uncertainty and optimism characterized Cindy Baudler’s reaction when she heard about the proposed FC-West Central unification.

“We’ve been members of West Central since 1999, but I didn’t know a lot about FC,” said Baudler, a sales and service representative at Landus Cooperative in Adair whose family farms near Adair. “I had some uncertainty, so I was interested in learning more.”

She and her husband, Mick, attended member meetings to get more details about the proposed unification. Baudler also attended employee meetings to stay informed. “It seemed like the two cooperatives had a lot in common,” said Baudler, who has worked at the location in Adair for more than 20 years.

The potential for a larger organization that could invest in upgraded equipment for greater efficiency appealed to Baudler, whose family has done business with the local cooperative for decades. Baudler’s husband began farming in 1980 when a retired neighbor approached him about purchasing his farm. Today, the Baudlers raise corn, soy-beans and hay, in addition to running a cow-calf operation.

“After going to all the meetings, I had no major concerns about the merger,” said Baudler, who encouraged her fellow West Central members to vote. “We’re open to change.” When she heard the results of the voting this winter, Baudler couldn’t hide her enthusiasm. “My first reaction was, ‘Yes, we got the majority vote!’ All the efforts to bring West Central and FC together weren’t in vain.”

As a Landus Cooperative employee, Baudler looks forward to more information technology (IT) solutions, including a more streamlined billing process, especially in the agronomy division. She also hopes these advances extend to grain contracts, too. “Technology is changing fast. I hope the promises that were made about newer, speedier equipment and more competitive crop input costs materialize through Landus Cooperative,” Baudler said.

Anything that helps the Baudlers operate their farm more efficiently and boost their profit potential is a welcome opportunity. “Farming is a good life, and we’re proud to carry on this tradition,” she said.


WE ARE LANDUS COOPERATIVE

Sam Riedesel: “We’re All Working for the Same Cause”

Cooperative unifications are nothing new to Sam (Gerald) Riedesel, who has been through the process before, both as a member and as an employee. Still,

the proposed unification between FC and West Central surprised him when he heard the news.

“My first reaction? I was shocked,” said Riedesel, a truck driver who works out of the Farnhamville location. “I didn’t expect it, but the more I thought about it, the more I was in favor of it.”

Riedesel wasn’t able to attend any of the informational meetings for members, but he did get a lot of questions from local farmers as he made his rounds. “I stayed neutral. I know some people were against the merger, but I just told them they had the right to vote how they want to.”

He also encouraged people to wait and see what opportunities could arise from a unification. Riedesel speaks from experience, because he had been an FC member since the 1960s and served on the board in the 1970s. “In those days, our general manager, Urban Knobbe, was involved in finding ways to save the cooperatives relationship with the railroads,” said Riedesel, who farmed in Greene County’s Dawson Township and raised corn, soybeans, cattle and hogs until he retired in 1997.

As an owner of the cooperative, it’s important to look at these things from a business standpoint, said Riedesel, whose nephew now runs the farm. “With the Landus Cooprative deal, I liked hearing about the focus on the fixed assets at the locations,” said Riedesel, who began trucking for FC in 2003. “We need to take care of our existing facilities.” The success of Landus Cooperative will depend on good

Eric Johnson: “Our Response Was Overwhelmingly Positive” (Eric Johnson, pictured on front cover)

E ric Johnson became an FC member as the merger process was underway, not only because it made sense for his farming operation, but because he

wanted the latest updates on the proposed unification. “A lot of the membership up here wasn’t real familiar with West Central, but I knew a little about them from my years at Iowa State University,” said Johnson, a Landus Cooperative agronomy sales associate and 4th generation farmer from Lake Mills.

The more Johnson learned by attending employee and member meetings, the more the proposed unification made sense. “West Central was stronger in grain, while FC was stronger in agronomy,” said Johnson, who has worked for the cooperative since January 2015. “Bringing together the talent from both companies sounded like a good fit.”

This wasn’t the first unification that long-time FC members in Johnson’s area had experienced. “After we shared the facts about West Central and FC, most of our members said it was a good deal,” said Johnson, who raises corn, soybeans, hogs and cattle with his parents, John and Nancy Johnson, and older brother, Michael, who is the Landus Cooperative location manager in Thompson.

The members backed up their words with their vote. “I was positive that the members in this area would vote for the unification, but I was a little surprised that the response was overwhelmingly positive,” Johnson said. “We like the opportunity for the cooperative to become more financially strong and invest in newer, more efficient equipment.”

The main concern going forward? “Our region is the smallest and farthest away from Landus Cooperativeheadquarters, so don’t forget about us up here in northern Iowa,” Johnson said. “Our farmers are smart operators who appreciate the convenience of the local cooperative and want to have modern grain-handling facilities and agronomy equipment.”

Johnson is optimistic about the possibilities. “The whole cooperative needs to be stronger than the two cooperative individually. At the end of the day, it’s all about benefiting the members.”

management, added Riedesel, who notes there are challenges any time two organizations come together. “We just have to take our time and work out these issues. There have been growing pains, but we’re getting through it.”

It helps to remember that the members and employees of Landus Cooperative are in this together, Riedesel noted. “We’re all working for the same cause. I always admired FC’s motto, ‘Together we can.’ It’s still true today.”

INTRODUCTION TO OUR NAME AND LOGO

Landus CooperativeTM is a farmer-owned agricultural cooperative, headquartered in Ames, Iowa that has a global reach and a local touch. We have more than 725 full-time employees at locations in more than 70 communities in Iowa and Minnesota and approximately 7,000 member-owners.

Landus Cooperative is one of North America’s largest grain storage companies and has shuttle-loading access on all seven, major Iowa rail lines. The diversified farmer-owned cooperative offers precision agronomy services with more than 50 agronomists on staff; a proprietary, member-owned brand of soybeans; expert grain marketing services; as well as corn and soybean processing including a facility in Ralston, Iowa which manufacturers SoyPlus®, a high bypass protein soybean meal for dairy herds across the globe.


Our NameAgriculture has always been about two things: land and the people who work it. Nothing in farming is possible without good, healthy soil—just as nothing is possible without strong, forward-thinking farmers to make it productive. Working as one, we will carry our heritage forward and step into the future with confidence and vitality.

This is where we come from, why we are here and how we will create a better tomorrow.

We are the land and the land is us.

Together, we are Landus Cooperative.

Our LogoWith a big, bold font and stacked words, our logo communicates strength, stability, authority and size. Our logo mark depicts rows coming together, creates movement and emphasizes the “us” in the name through placement and color.

Our Cooperative

“We are in a privileged position toconsult with producers who are planting the seeds, growing the grains and raisingthe livestock that feed our neighbors and the world; it is a privilege we, as employees of Landus Cooperative, do not take lightly.”--Milan Kucerak, CEO of Landus Cooperative

Rake

Thompson

Britt

GreeneAredale PlainfieldBristow

AllisonDumontHampton

AckleyKesley

BradfordParkersburg

New HartfordDike

Buckeye (Alden)

CollinsMaxwell

Bondurant

Rake

Thompson Leland

LatimerGreene

PlainfieldBristowAllison

Dumont

AckleyKesley

CollinsMaxwell

Bondurant

Pleasant Hill

Larrabee

Sulphur Springs

Newell

Early

Ida GroveOdebolt

Sac City Rockwell

City

Ulmer

Lytton

Somers

Farnhamville

CallenderGowrieYetter

Lake City

Lohrville

PatonChurdan

Dayton

BoxholmBoone

AmesCarroll

RalstonScranton

JeffersonBeaverHalbur

Dedham Coon Rapids

Bayard

Templeton

Dawson Perry

Woodward

Irwin AudubonHamlinExira

Oakland

Atlantic Adair

Casey Stuart

Earlham

Yale

Linden Altoona


Our Locations

Partnership Along the Supply Chain Diversity to Strengthen Cooperative

PLANNING

GROWING

HARVESTING

CUSTOMER SERVICE

GRAINMARKETING

GLOBAL PLANTING

ANIMAL NUTRITION/

MANUFACTURING

2321 N. Loop Dr., Ste. 220Ames, IA 50010-8218

TRADE IN YOUR OLD HATBring in your FC or West Central hat to any location and exchange it for a new Landus Cooperative hat. No matter how old or dingy, we’d be happy to trade in your old model for a brand new hat with OUR cooperative name.

Learn more about our logo and the meaning of our name on page 14.

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