When the 1900s dawned, grain farmers of the upper Midwest began to band together to gain much needed economic leverage. Unable to store grain themselves, farmers were reliant on their local grain elevators, which themselves were too small and were forced to sell the grain and ship it to the regional facilities of millers or grain merchants.
Because so much grain was available at harvest time, commodity prices were depressed for farmers, but once the grain made its way to regional sites the economics changed, resulting in more realistic prices.
In order to receive their rightful share of the profits that resulted from their hard labor, grain farmers responded by forming either marketing cooperatives or wheat pools.
Wheat Growers was launched in 1923 when wheat prices were especially depressed, resulting in a rash of farm bankruptcies. A conference was convened in Sioux City, Iowa, where representatives from a number of states met to discuss ways of improving grain prices.
Here the president of the Montana Wheat Growers Association, Dwight Cressap, told the participants how wheat pools had been successfully launched in Montana, Oregon and Washington. One of the delegates, South Dakota Lt. Governor Carl Gunderson, was so impressed that he called for a meeting of interested participants to form a South Dakota wheat pool.
The underlying tactic of the wheat pool was to withhold grain from the market, to regulate the flow to the market to improve the price--rather than have grain flood the market at harvest time and depress the price the farmers received.
About 30 members of the state legislature attended the meeting held at the state capital on February 7, 1923, and a tentative agreement was reached to form the South Dakota Wheat Growers Association.
Wheat Growers established its headquarters in Aberdeen, South Dakota, and an organizational committee of 12 was selected. The number soon increased to 14 after the committee decided to divide the state into 14 districts. At a meeting held March 14, 1923, at the Ward Hotel in Aberdeen, a wheat pool contract was drawn up. The committee established a goal of one million bushels and a deadline to achieve it.
Once enough farmers signed on, the committee hired a general manager of the association, Charles W. Croes, at a salary of $250 per month.
The purpose of the wheat pool was to provide for a more orderly flow of grain to market, seeking to eliminate the usual oversupply at harvest time with its weakening effect on the market. Farmers were asked to sign committal contracts to deliver bushels from a certain number of acres to elevators that had “put through” agreements with the wheat pool.
Initially, Wheat Growers owned no grain-handling facilities and had to rely on local elevators, who were also in poor shape due to failing grain markets. The elevators issued storage tickets as the producers brought in the grain, and the producer surrendered the storage ticket to the wheat pool and received an advance of approximately 75 percent of the value of the grain at harvest time.
With the storage tickets in hand, the wheat pool issued a loading order to the elevator to ship the grain to Minneapolis, where it was held in terminal storage and marketed through the year by the American Wheat Growers. This national organization functioned as the sales agency for all state pools. At the end of the year, any additional proceeds were paid out to the producers in a final settlement.
The improvement in prices from pooling was not especially dramatic in the early years, but a number of other factors combined to result in much better grain prices for farmers in the 1920s. Everything would change, however, when the stock market crashed in the autumn of 1929 and the country was soon plunged into The Great Depression.
At their annual meeting held in June 1930, the members of the South Dakota Wheat Growers Association considered whether to liquidate the organization and split the organization's reserve funds among its members.
Instead, they decided to convert Wheat Growers into a farmer-owned cooperative. Hence, the group conducted its last pool in 1930-31.
During a transition period, elevators were acquired in Andover, Bristol, Columbia and Frankfort, South Dakota; Wheat Growers began to operate these on a cooperative basis in 1931. As well, the federal government had stepped in to support grain prices through the creation of the Grain Stabilization Corporation, putting an end to need for wheat pools. In 1933 the Roosevelt administration formed the Commodity Credit Corporation to stabilize and support farm income and prices.
The 1930s were a dark period for U.S. agriculture, no less so for Wheat Growers, which was soon on the verge of folding. By 1934 the co-op's staff was limited to just Croes, who took a steep cut in pay to keep the co-op going. Croes and Wheat Growers hung on, however, and in 1934 Croes seized an opportunity to make use of the elevators to supply feed grains to farms, made possible by a new government loan program for feed.
This business not only provided much needed revenue but also helped to establish Wheat Growers as an elevator operator. Six elevators were leased from the Omaha Bank for Cooperatives in 1937, and another lease was taken on the Farmer's Elevator in Aberdeen.
Two years later Wheat Growers was able to buy all seven of these facilities, supplemented by the acquisition of five other elevators. Another in Glencross was bought from the federal government in 1940. Also in 1940 Wheat Growers introduced its own brand of feed under the Blue Diamond name.
Much of the focus during the 1940s was on the Assocation’s fledgling feed business. Documents issued by the U.S. Commissioner of Patents indicate the Blue Diamond feed logo was first used April 1, 1940.
According to eyewitness account, the first bag of Blue Diamond feed was filled at the Aberdeen Elevator. After filling, the bags were sewn shut by hand. Ground chicken feed was the primary feed product manufactured in the beginning. Eventually, the Association began manufacturing Blue Diamond feed at its Bristol elevator as well.
In 1945 Wheat Growers acquired a pair of elevators, and the following year an elevator and additional warehouses were picked up in auction. One of the new elevators was then supplemented with a pellet mill in 1947, allowing Wheat Growers to market Blue Diamond pelleted feed.
By the time it marked its 25th anniversary, Wheat Growers had a membership of 5,000 farmers who were served by 15 facilities. In fiscal 1948 the co-op posted record sales of more than $3.3 million.
Grain harvests were plentiful in the late 1940s, leading to surpluses and falling prices, forcing the Commodity Credit Corporation to step in and acquire large amounts of grain to stabilize the situation. As a result, the government needed storage space, and in 1953 Croes reached an agreement with Commodity Credit Corporation, which contracted to use 85 percent of a new grain-storage facility in the Aberdeen area to be constructed by Wheat Growers.
A 550,000-bushel terminal was ready for the 1954 harvest, but soon proved inadequate to meet the needs of both the government and the co-op's members. More space was added – and by the end of the 1950s the Aberdeen complex boasted a capacity of more than 2 million bushels.
Grain harvests were plentiful in the late 1940s, leading to surpluses and falling prices, forcing the Commodity Credit Corporation to step in and acquire large amounts of grain to stabilize the situation.
As a result, the government needed storage space, and in 1953 Croes reached an agreement with Commodity Credit Corporation, which contracted to use 85 percent of a new grain-storage facility in the Aberdeen area to be constructed by Wheat Growers.
A 550,000-bushel terminal was ready for the 1954 harvest, but soon proved inadequate to meet the needs of both the government and the co-op's members. The need for handling members’ grain at harvest time, combined with continued surpluses, brought about the construction in 1956 of a 600,000-bushel addition to the east end of the Aberdeen Terminal.
The need for government storage continued and, in 1958, a 650,000-bushel section was added to the west end of the Aberdeen Terminal. Expansion of this facility was completed in 1959 with the erection of a 250,000-bushel Butler building to the north of the terminal, bringing the entire complex to just over 2 million bushels.
For many years, the Aberdeen Terminal was the largest grain-storage facility in the state. The end of the decade saw the start of construction on a feed mill complex in Bath, which was completed in 1960.
At the start of the 1960s a new feed mill complex was completed in Bath, South Dakota. Two elevators were relocated here and production of Blue Diamond feed was transferred to the new plant.
In 1962 Wheat Growers became involved in the fertilizer business, building a dry fertilizer warehouse at Bath, where other fertilizer assets would later be added to the mix. A liquid fertilizer supplier, Wheeting Farm Service, was acquired in 1964 and relocated to Bath, and anhydrous ammonia storage and the fabrication of liquid fertilizer attachments were incorporated into the business as well. The expansion of services to farmers continued in 1969 with the construction of a 1,000-ton fertilizer blend plant in Huron.
During this time Wheat Growers began to offer petroleum products after acquiring Tulare Oil Company, and forged an alliance with Farmland Industries, then known as Consumer Cooperative Association (CAA). CAA had invested considerable funds to establish research laboratories that developed "open formula" feed. Wheat Growers elected to cease production of Blue Diamond feeds and instead manufacture and market CAA feeds.
Unfortunately, on the last day of the 1960s, a fire destroyed the Bath feed mill.
The Tulare acquisition proved beneficial to Wheat Growers' members in the 1970s, when the OPEC oil embargoes caused major oil companies to all but abandon rural America. Wheat Growers was able to keep its members supplied with gasoline and other products, especially during the periods of shortage.
In 1973, the Association celebrated its 50th anniversary with record sales of $41.8 million.
The co-op expanded its petroleum business in 1975 with the addition of Huron Oil, Andover Oil and Langford Oil. Petroleum sales grew steadily through the remainder of the decade, increasing from 3.8 million gallons to 7.8 million gallons in 1979.
The 1970s brought changes on a number of other fronts as well. Following the fire that destroyed the Bath feed mill, Wheat Growers replaced the operation by acquiring Hub City Feed and Seed and also added a wholesale seed business. The co-op expanded its grain-handling capabilities in the 1970s, acquiring the one-million-bushel Western Grain elevator in Redfield, South Dakota, in 1971.
The following year another Redfield elevator was added and two years later made into a seed-cleaning plant. Also in 1972 an elevator in Cresbard, South Dakota, was purchased and 100,000 bushels of capacity was added to the Mellette elevator. In addition, two more dry fertilizer plants were opened in the 1970s, and agronomy services were expanded through the acquisition of new locations.
The 1980s brought new multicar freight rates by railroads. Some of the co-op's elevators laid sidetrack to accommodate the loading of multicar trains, which grew from 26 cars to 54 cars in 1983.
To make unit trains even more cost-effective, some of the grain-handling facilities were expanded and renovated and switch engines were bought to speed up loading. About 60 percent of all Wheat Growers' grain was shipped on unit trains by 1986.
Also during the 1980s, members voiced the need for a better barley market. The Aberdeen Farmers Elevator was converted to a barley-buying station,
On other fronts in the 1980s, another 320,000 bushels of storage space was added to the Chamberlain elevator in 1987. A year later, Wheat Growers purchased Cargill elevators located in Aberdeen and Athol, while an elevator located in Milbank was sold to another cooperative.
Because a pipeline would no longer carry the co-op's liquid nitrogen fertilizer to its terminal, Wheat Growers joined forces with Farmland in 1988 to establish their own two-million-gallon storage terminal that could be supplied by rail.
Wheat Growers also opened a new dry fertilizer plant in Tulare in 1986, followed a year later by the addition of a fertilizer storage plant in Cresbard. The co-op then expanded its fertilizer business into North Dakota with the acquisition of Oakes Fertilizer Company.
The petroleum operation was also enlarged through the 1986 acquisition of Brown County Co-op and James Valley Co-op, and the unit closed out the decade by buying several bulk oil plants from Harms Oil Company of Aberdeen.
Wheat Growers became involved in agricultural processing for the first time in the 1990s. This was in response to a 1987 survey conducted with co-op members, who indicated they wanted Wheat Growers to process their raw materials into value-added products that would open up new markets.
As a result, Wheat Growers and Farmland Industries joined forces once again to form Heartland Grain Fuels, LLP, which opened an ethanol plant in late 1992 to produce a gasoline supplement.
Following the passage of the 1996 Farm Bill that eased some regulations and eliminated the requirement that farmers leave land unused in order to qualify for crop subsidies, many Wheat Growers' members began producing corn to be sold for ethanol or soybeans.
During the 1990s, Wheat Growers added new products and services for its members, including the addition of hybrid seeds; a financing program to help buy agricultural "inputs" and services; more marketing information made available to growers; a program to connect farrowing producers with farmers who finished hogs; and precision farming services, such as grid sampling and advanced variable rate fertilizer application using global positioning technology.
Wheat Growers reached the turn of the century committed to serving member-owners with reliable markets, services and quality products through a safety-oriented, profitable and innovative organization.
With the new millennium came more changes in agriculture in the upper Midwest as the production shift to more row crops accelerated and technological advances brought opportunities to dramatically increase production yields.
In 2000, Wheat Growers hired its first full-time, site-specific (precision ag) coordinator. By the end of the decade, nearly every producer in the area was using some type of precision agriculture and the Wheat Growers had over one million acres mapped for precision ag equipment.
A state-of the art fertilizer warehouse and shuttle unloading facility with a capacity of 33,000 tons opened at Wolsey in 2002. By the end of the decade, Wheat Growers had constructed similar facilities at Bath, Wolsey and McLaughlin.
By 2005, ethanol production was booming with several plants being constructed in North and South Dakota. Producers were increasing corn production at record levels. While some viewed the advent of ethanol plants as a threat, Wheat Growers saw it as an opportunity to create more value for producers and to work with ethanol plants.
Rather than compete with ethanol plants, Wheat Growers made the strategic decision to divest its ethanol plant investment and work with ethanol producers to supply corn and provide corn producers with access to more corn storage capacity.
In that vein, the Association constructed harvest-time facilities strategically located near production negotiated supply agreements and built corn receiving facilities adjacent to ethanol plants in Huron and Aberdeen.
Wheat Growers also entered into a record number of joint ventures and unifications during the decade, including:
- 2000 Dakotaland Feeds, LLC formed through a joint venture with Farmland Industries and North Central Farmers Elevator.
- 2001 James Valley Grain, LLC created through a joint venture with Norway Spur Farmers Cooperative.
- 2002 Wheat Growers and four other cooperatives join to create Petroleum Partners, LLC.
- 2002 Joint venture between Wheat Growers Association and Harrold Grain Company creates Hi-Plains Agronomy in Highmore, SD.
- 2003 Joint venture with Klose Farmers Elevator creates MainLine Agronomy Center in Eldridge, ND.
- 2003 Wheat Growers Association purchased the assets of Farmers Elevator of Willow Lake, SD.
- 2004 Wheat Growers Association unifies with Farmers Union Oil Company of Woonsocket, SD.
- 2006 Wheat Growers Association unifies with AmKota Cooperative of Wessington Springs, SD.
- 2007 Wheat Growers Association unifies with Aurora Cooperative Oil of Stickney, SD.
- 2007 Wheat Growers Association purchases the Scoular Grain operations in Alpena, SD.
- 2007 Wheat Growers Association unifies with Yale Farmers Cooperative in Yale, SD.
- 2007 Wheat Growers Association unifies with Farmers Union Cooperative Elevator in Kennebec, Reliance and Highmore, SD.
- 2007 Wheat Growers Association exchanged ownership in Heartland Grain Fuels, LP for cash and equity in Advanced BioEnergy.
- 2009 Wheat Growers Association unifies with Dakota Ag Cooperative of St. Lawrence, Miller and Miranda, SD.
- 2010 Wheat Growers Association enters into a joint venture with Central Valley Ag, headquartered in O’Neill, NE, and Farmers Cooperative Company, headquartered in Ames, IA, to create Consolidated Sourcing Solutions, a partnership in fertilizer sourcing to better manage fertilizer needs and assets.
By the end of the decade, corn and soybean yields were increasing about 19 million bushels per year in the Wheat Growers trade territory.
Growing productivity and historic weather challenges during the 2009-2010 growing season prompted the Association to embark on “Connecting to Tomorrow” – an intensive capital investment to improve receiving capacity and efficiency throughout its grain handling system.
Phase one of the “Connecting to Tomorrow” initiative was completed in just one year at 11 locations – increasing receiving capacity by 30 percent, storage capacity by 23 percent, and doubling drying capacity with bigger, more efficient dryers. Two new 100-car shuttle loaders were added at Roscoe and Andover.
Additional improvements in phase two of the project are planned – long-term investments that will continue to serve member owners well into the future.
At a Glance
- 39 locations
- 16,000 equity holders
- Marketing over 170 million bushels annually
- 5,400 active producer members
- Integrity in Business Dealings
- Provide Superior Service to Our Customers
- Focus on Present and Future Customer Needs
- Remain Financially Strong
- Maintain Progressive Leadership for Our Company
- Commitment to a Positive Safety Culture