Here for the Long Haul
It’s a challenge for any business to stay relevant to its customers, especially as the years turn to decades. For almost 90 years, Assumption Cooperative Grain Company has done just that – successfully evolving for almost a century to serve its farmer-owners.
Assumption Co-op was founded in 1934 with one set of scales and thirteen scoop shovels, purchased with a $1,000 loan. Building from its original location in Assumption, Illinois, the cooperative aggressively added facilities through the 1950s and 60s to serve more and more local farmers. Mergers through the 1990s added to the growth, and it’s been on an even more significant capital expansion program since 2014.
“From 1934 to 2014, we’d spent $20 million on facilities; in the past nine years, we’ve spent just over $15 million,” said General Manager Randy Sexton, who joined Assumption Co-op in 2011. “We’re on a good growth path and I think we can keep doing what we’ve been doing and be here for another hundred years.”
Today, Assumption Co-op operates six locations, providing grain storage, marketing and shipping for more than 1,000 farmers who raise an abundance of corn, soybeans and wheat in America’s heartland. Most recently, it added two 105’ diameter bins, each with a 788,000 bushel capacity, and a high-capacity dumping facility at its Westervelt location, all financed by long-time lender CoBank.
Despite this significant storage expansion – bringing total capacity to more than 15 million bushels – Assumption Co-op’s capacity still doesn’t accommodate all its members’ crops.
“Our first role is to help members harvest and bring their grain to us, so it comes down to how well we can unload and store their crops,” said Sexton. “Yields vary year to year, so we need to adapt and adjust. We try not to get full and have to shut down for the day or week, instead making sales to move the grain so we can stay open and keep accepting harvests.”
CoBank understood the market volatility and our need for additional funds to meet our margin calls. Not all banks operate that way.
Recent price volatility in the commodities markets has made holding members’ grain to sell at the most opportune time more risky and expensive. The cooperative also employs a hedging strategy, selling futures in the marketplace that carry margin calls if the commodity price goes up.
“Last year, we had a lot of grain bought and futures sold when the Ukraine War started, and we were faced with immense margin calls,” said Sexton. “Just like when a similar situation arose in 2008, CoBank understood the market volatility and our need for additional funds to meet our margin calls. Not all banks operate that way.”
Despite the external challenges and unpredictable world events impacting its operations, Assumption Co-op remains focused on establishing stronger relationships with local producers and continuing to serve as a reliable place to deliver grain in the fall. Sexton attributes much of their success in achieving this to his staff.
“We’ve got a great team of people who come to work every day committed to taking care of our customers,” he said. “We’re really pleased to have established a profitable strategy that helps us maintain our facilities, have adequate working capital and keep our employees engaged in delivering great service.”