GROWMARK and Archer Daniels Midland announced a plan to consolidate their grain marketing and river elevator operations into a new ADM subsidiary called GROWMARK Grain.
Kenneth P. Baer, executive vice president and chief executive officer, told about 3,000 farmers at the GROWMARK annual meeting in Peoria that the two firms have signed a letter of intent to develop a plan for a joint grain venture. Joining Baer in the announcement was Dwayne O. Andreas, chairman of the board and chief executive of ADM.
“What really is about to occur is the formation of a powerful new partnership between two premier agricultural business organizations-ADM, a publicly-held stock company which has grown to be one of the world’s largest agricultural processors, and GROWMARK, one of the largest regional farmer cooperatives in the Midwest, and one of the strongest anywhere in the United States,” said Baer.
GROWMARK will transfer ownership of its seven river terminals to the new ADM subsidiary in exchange for ADM common stock. Substantially all ADM and GROWMARK terminals on the Illinois and Mississippi Rivers will be identified as “ADM/GROWMARK.”
The new GROWMARK Grain venture will move grain to the center Gulf area from 18 locations on the Illinois and Mississippi Rivers, where it will be exported through the new company’s trading offices in England, Japan, Ireland, and The Netherlands and through agents in 16 countries throughout the world.
Both firms will have equal representation on the GROWMARK Grain board of directors. According to the plan, GROWMARK will become the originator for substantially all grains required by ADM in the Midwest for its grain processing and merchandising operations.
The ADM/GROWMARK partnership can truly enhance the results of both organizations, Baer said. “ADM need and wants our system’s grain origination capability, and we need ADM’s ability to provide equity capital, their processing capability, and their worldwide marketing expertise.”
GROWMARK is a regional farm supply and grain marketing cooperative headquartered in Bloomington. It has 235 member cooperatives throughout Illinois, Iowa, and Wisconsin. During the fiscal year ending Aug. 31, 1985, GROWMARK reported sales of $1.75 billion and assets of $341 million.
Archer Daniels Midland company is headquartered in Decatur and is one of the world’s largest grain processors. In 1985, ADM had net sales of $4.7 billion and total assets of nearly $3 billion.
By conservative estimates, about 5% or 5,000 Illinois farmers were forced out of business in 1985 due to financial difficulties, FarmWeek reported Oct. 28 that year.