Elkhart Co-op finds a way to weather the drought
Year after year, Morton County, in extreme southwest Kansas, receives less rainfall than most any county in the state. And even though drought the last two years has been even more dramatic than most--with total rainfall just 60 percent of normal--the farmers here have learned to adapt--even thrive--to remain successful.
Likewise, the Elkhart Co-op has had to adapt to overcome weather-driven diversity, says Karen Hill, the cooperative's general manager.
"These farmers, these producers, know how to grow crops in this kind of weather," Hill says. "As a co-op, we have to look for alternatives too. We need to look at different niches where we can supply or fill in what bushels that are lost during the year. We have to be very efficient. There is no room for chances, surprises, especially when we're living in an area that's dry."
A focus on exemplary customer service and top-quality products has required some difficult decisions over the years.
The cooperative's board of directors has shifted its business strategy from the traditional, all-encompassing local co-op that provides the gamut of services and supplies, to one that focuses on the company's core profit centers: grain sales; agronomy input sales (including seeds chemicals and fertilizer); plus lubricants and fuel.
"We are no longer able to be all supplying co-op--we've had to let some items go to stores that are more efficient, such as the tires, hardware. We had to let them go because we were not the best in those. We went for what we're the best in, and that was the grains, the agronomy and the fuel," Hill explains.
The focus on grains and agronomy has enabled the Elkhart Co-op to withstand weather volatility, and expand its trade territory. Two years ago, it acquired seven grain elevators in Baca County, Colo., which complements the company's two sites in Oklahoma and five in Kansas.
"There is still room for growth. With these tough markets, with the volatility in grain, there will be some companies that go out of business because they can't handle the ups and downs. In our case, there was a small grain company wanting to downsize; we picked up those. I still think you'll see mergers and acquisitions among co-ops, I think you'll end up following the trend for fewer co-ops in the state of Kansas and larger ones."
Wheat is the most prominent crop in the cooperative's trade area, but Morton County farmers grow a lot of irrigated corn, Hill says. The area is primed for growth in the crop sector; wheat is shipped via loader train to the Texas Gulf or to Mexico; feed grains are in high demand because of the dominance of animal agriculture in the region. The demand for grains from the region allows farmers to cope with unpredictable weather, Hill explains.
"Farmers seem to be pretty resistant. They seem to be able to cope and get through. Here, we may have one--to two years out of five, where they have moisture. Those two years, they hit big home runs, and the other years they are just going for what they can and make sure they have insurance to back them up. "
Kansas Wheat is the joint agreement between the Kansas Wheat Commission and Kansas Association of Wheat Growers, joining together as "Leaders in the Adoption of Profitable Innovations for Wheat."