Incorporated: 1927 as Illinois Farm Supply Company
Sales: $3.60 billion (2006)
NAIC: 115110 Support Activities for Crop Production; 115114 Postharvest Crop Activities (Except Cotton Ginning); 115116 Farm Management Services; 115210 Support Activities for Animal Production; 321992 Prefabricated Wood Building Manufacturing; 325310 Fertilizer Manufacturing; 325311 Nitrogenous Fertilizer Manufacturing; 325312 Phosphatic Fertilizer Manufacturing; 325314 Fertilizer (Mixing Only) Manufacturing; 423820 Farm and Garden Machinery and Equipment Merchant Wholesalers; 424410 General Line Grocery Merchant Wholesalers; 424480 Fresh Fruit and Vegetable Merchant Wholesalers; 424490 Other Grocery and Related Products Merchant Wholesalers; 424720 Petroleum and Petroleum Products Merchant Wholesalers (Except Bulk Stations and Terminals); 424910 Farm Supplies Merchant Wholesalers; 445120 Convenience Stores; 447110 Gasoline Stations with Convenience Stores
GROWMARK, Inc., is a member-owned farmers’ cooperative. Its reach extends from the American Midwest to Ontario, Canada. In addition to selling a wide range of agricultural supplies to its members and helping them market their grain, the co-op operates the Fast Stop chain of convenience stores. GROWMARK operates through almost 300 member cooperatives serving more than 250,000 individual farmers.
GROWMARK, Inc., traces its origins to the 1927 formation of the Illinois Farm Supply Company. The Farm Bureau had helped farmers in nine Illinois countries to establish cooperatives for purchasing petroleum products. These cooperatives were banded together into Illinois Farm Supply. Before this time, the large oil companies had neglected rural areas because they were more expensive to supply than cities. At the same time, mechanized farming was quickly supplanting the old horse and plow, and farmers needed fuel to run their new tractors.
In 1962, Illinois Farm Supply Company merged with Farm Bureau Service Company of Iowa to create FS Services, Inc. The “FS” brand had been in use since the mid-1950s. In 1965, FS Services merged with Wisconsin Farmco Service Cooperative and the Producers Seed Company.
The co-op began a finance program in 1969. It had a portfolio of about $9 million in the 1980s. The co-op considered closing its finance unit, FS Credit Corporation, in the early 1990s, but within a few years the portfolio was up to $56 million. Though profitable, the unit’s aim was said to be the convenience of members rather than competition with commercial banks.
GROWMARK FORMED IN 1980
GROWMARK, Inc., was formed through the 1980 merger of FS Services, Inc., and Illinois Grain Corporation, both affiliates of the Illinois Farm Bureau. The combined company had annual sales of $2 billion; its territory included Illinois, Iowa, and Wisconsin. The business had two divisions. The Grain Division used the IG brand, and had 165 member companies, while the Supply Division served 129 member companies and retained the FS brand.
Also in 1980, Glenn Webb was named chairman and president, roles he would hold for 20 years. He was succeeded in 2000 by Dan Kelly, an executive in agricultural banking. Bill Davisson became CEO in 1998 after 28 years with the company.
In 1985, Archer Daniels Midland Co. acquired seven river grain-handling facilities from GROWMARK in exchange for stock. This began a long-running partnership. It also prompted a lawsuit from 19 of GROWMARK’s member cooperatives, who argued the move did them economic harm by reducing competition. The 1980s were a difficult period for agriculture in the United States. By the middle of the decade, GROWMARK was serving 275,000 farmers through 250 member co-ops.
GROWMARK ventured into Canada in late 1994 when it acquired United Co-Operatives of Ontario. This added more than three dozen member cooperatives in the province. In 2003 GROWMARK extended its offerings to Ontario member cooperatives through an alliance with the TruServ Canada Cooperative.
GROWMARK joined the Indianapolis-based Countrymark Cooperative in a couple of marketing joint ventures in 1996. However, the feed and plant food partnership was scrapped a few years later, when Countrymark decided to join the giant Land O’Lakes co-op based in Michigan. GROWMARK continued to market Countrymark fuel to its own members. In 1996, GROWMARK and Countrymark also teamed up to acquire Mexico’s Malta Clayton feed company from Unilever U.S.
Annual sales climbed $500 million in the last half of the 1990s, reaching $1.3 billion in the 2000 fiscal year. Much of the increase came from adding new sales territory in Indiana, Kansas, Michigan, and Nebraska. Not all of GROWMARK’s expansion efforts were successful, however. A 2001 bid to join with the Tennessee Farmers Cooperative collapsed.
75TH ANNIVERSARY IN 2002
GROWMARK celebrated its 75th anniversary in 2002. By this time, it counted more than 250,000 farmers among its members. The company’s theme for the year was “75 years of cooperative innovation.” The changing nature of the business was reflected in the fact that 40 percent of the company’s orders (by value) were being ordered over the Internet.
In 2002 GROWMARK acquired the Agronomy and Seedway divisions of Agway Inc., which was going through bankruptcy proceedings. The Agway deal added about 600 employees to GROWMARK. Shareholdings in fertilizer manufacturer CF Industries and Allied Seed LLC were included in the transaction. GROWMARK sold off a part of the CF business when it went public in 2005; its predecessor FS Services was one of the cooperatives that created what became CF Industries, Inc., in 1946.
Ours has always been a business of renewal and growth—the renewal of values, ideals, and relationships; and the growth of knowledge, opportunities, and markets. It was these shared principles that first led farmers to band together and form their own cooperatives. And it’s our continued dedication to these principles that has helped propel GROWMARK, Inc., into the $3 billion company we are today.
ILLINI FS MERGER IN 2006
In the summer of 2006, GROWMARK merged with the Illini FS cooperative based in Urbana, Illinois. Illini had been a customer of GROWMARK prior to the merger. It had lost money for the previous two years and had little hope of turning that around without greater efficiencies. The merger was passed over some grumbling from Illini FS members over the terms of the deal: “We didn’t expect retained equity to be paid back to members, but never in our wildest dreams did we expect it to be distributed all over GROWMARK’s territory,” said one in a local newspaper, which noted that GROWMARK paid just $7.3 million, mostly in stock, for a company with shareholder equity worth $15.4 million.
Net sales leapt to $3.6 billion in 2006 from $2.8 billion the previous year, though net income before patronage and dividends only rose slightly to $73.6 million. The company had 1,200 employees. GROW-MARK’s acquisitions during the year included an industrial lubricant blending business in Council Bluffs, Iowa, called McCollister & Company. Family-owned McCollister had been formed in 1931.
Other acquisitions for 2006 included Huisinga Grain, Inc., and Willow Hill Grain, Inc. These were folded into a new partnership with Illinois’s Effingham-Clay Service Company and Wabash Valley Service Company, called Total Grain Marketing LLC.
BIG ON BIOFUELS
The co-op had been selling renewable fuels since the gasohol (gasoline combined with corn-derived ethanol alcohol) of the mid-1970s. GROWMARK members both supplied the grain for gasohol and used it in their tractors and trucks. By 2000, more than 60 percent of the FS Petroleum Division’s gasoline included ethanol.
GROWMARK members at 100 farms experimented with soybean-based biodiesel in 1993, and the cooperative began marketing the renewable fuel to others several years later. It signed up to sell most of the soy-based biodiesel output from the BioFuels Manufacturing Illinois Inc. (BMI) plant under construction in 2007.
Frederick C. Ingram
GROWMARK FS, LLC; MID-CO COMMODITIES, Inc.; Seedway LLC.
Agronomy; Energy; Facility Planning and Supply; Grain; Seed.
Cargill, Inc.; CHS Inc.; Agrium Inc.; Land O’Lakes, Inc.; UAP Holding Corporation.
- Illinois Farm Supply Company formed from nine area cooperatives.
- Merger of Illinois Farm Supply and Farm Bureau Service Company of Iowa creates FS Services, Inc.
- Merger of FS Services and Illinois Grain Corporation creates GROWMARK, Inc.
- GROWMARK enters grain elevator deal with Archer Daniels Midland Co. (ADM).
- Purchase of United Co-Operatives of Ontario brings GROWMARK into Canada.
- Total sales reach $1.3 billion.
- GROWMARK acquires Agronomy and Seedway divisions of Agway.
- GROWMARK merges with money-losing Illini FS cooperative based in Urbana, Illinois.
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_____, “Growmark, TFC to Study Potential Merger,” Feedstuffs, April 2, 2001, p. 6.
“Illinois Co-Op Deal Wraps Up,” Feedstuffs, October 2, 2006, p. 30.
Jordon, Steve, “McCollisters Sell Family Lubricants Business to Illinois Co-Op,” Omaha World-Herald, August 1, 2006, p. 2D.
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_____, “Countrymark, Growmark Have ‘PLAN’ for Success,” Feedstuffs, December 9, 1996, pp. 8f.
Spears, John, “U.S. Firm Acquires Ontario Farm Co-Op; Not Big Enough to Thrive Alone,” Toronto Star, October 14, 1994, p. F1.
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_____, “Indiana’s Countrymark, Illinois’ Growmark Buy Large Mexico Feed Company,” Knight-Ridder/Tribune Business News, August 19, 1996.
“TruServ Canada and Growmark Align: Two Co-Ops Hope to Jointly Improve Marketing and Distribution,” Home Channel News, October 1, 2002, p. 8.