October 1, 2020

It’s Payback Time: MaxYield Pays Off Fostoria, Britt Equity

20131010_maxyield_465 compWhile poet Robert Service said a promise made is a debt unpaid, that’s not so at MaxYield Cooperative.

MaxYield was pleased to retire nearly $60,000 of Farmers Cooperative of Britt preferred stock this year from regional cooperatives, and more than $205,000 of Fostoria Cooperative Elevator Company preferred stock, per previous merger agreements with those organizations. These payments pay off the remaining applicable Fostoria equity and Britt regional equity held by members when the cooperatives merged with MaxYield (then known as West Bend Elevator Company [WBEC]) in 2003.

The original agreements called for 15 years to retire the equity paid out by the regional cooperatives where the Fostoria and Britt cooperatives were members. If this money had not been paid off in 15 years, MaxYield was obligated to pay it back at a discounted amount.

“The most exciting piece of these Fostoria and Britt arrangements is that MaxYield retired the equity at full-face value, and we fulfilled these obligations early,” said Keith Heim, MaxYield’s CEO.

What a difference a decade makes

The Fostoria location has come a long way with MaxYield’s help, noted Todd Meyer, who serves on MaxYield’s board. In 2003, the Fostoria Cooperative Elevator Company had two choices: sell out and close the business or merge with another cooperative.

“While some on the board wanted to sell out, most of us wanted the elevator to stay open,” Meyer said.

Fostoria board members explored mergers with two cooperatives. One cooperative wanted to work with Fostoria but only planned to operate the elevator seasonally. MaxYield wanted to keep the facility open, and viewed Fostoria as a growth area.

Fostoria voted to unify with WBEC in 2003. “I was a little skeptical at first, but boy, this was a good decision for everyone,” Meyer said. “This has been hands-down our best choice. MaxYield’s business personality meshes well with farmers in this area. Also, our facilities are safer, cleaner, and much better than before, and we continue to be a viable member of this community.”

Building new beginnings in Britt

Like Fostoria, the Farmers Cooperative of Britt needed to make a major change in 2003 and unified with WBEC. There was a slight twist compared to Fostoria, though.

“Britt had their member equity split into two categories—regional and local,” noted Bob Burkhardt, MaxYield’s chief financial officer. “Whenever we got money back from the regional cooperatives that Britt was part of, we refunded it. A portion of Britt’s local equity is still owed to the members, and there is a process in place to refund it to members, per the merger agreement.”

The agreement has worked out well, said Mark “Skip” Miller, a Britt-area farmer who served on the Farmers Cooperative of Britt board when the unification occurred. “Britt’s board of directors wanted a strong partner that would fulfill its commitments to the members of Farmers Cooperative Company. I’m glad that the integrity of the deal that was made then still holds true today.”

Miller isn’t alone. “The feedback I’ve received from members around Britt is that they appreciate that the regional equity is being paid back, and they are glad MaxYield has fulfilled that requirement,” added Miller, a former MaxYield board member.

20120927_farmers_023 compResults create a ripple effect

Not only has MaxYield lived up to its agreements and met them ahead of schedule, but MaxYield has kept the Fostoria and Britt locations competitive, too. “This is due to the backing we’ve received from members in these areas,” Burkhardt said. “Their support has allowed us to make a number of investments in the Fostoria and Britt facilities in recent years, and we’ll continue to do so.”

Meyer has been amazed by the results. “When we were evaluating options for the Fostoria Cooperative Elevator in 2003, we were just hoping to find a way to keep the doors open. We never dreamed it would look like it does now. MaxYield has done everything they said they would do and more. Our facilities are better, the service is very good, and the equity Fostoria members were owed has been paid in full years sooner than we expected.”

This reflects well on MaxYield in more ways than one, Miller added. “In many towns across north Iowa, MaxYield is often the largest employer. I feel it’s necessary for them to not only live up to the merger agreement, but also to reinvest in our communities. Their employees serve on fire departments, ambulance crews, school boards, and more. MaxYield has also financially supported our towns, and I’m glad they continue to do this.”

MaxYield enjoys working with members throughout its trade territory, including those in the Fostoria and Britt areas, Heim said. “The equity retirement process at these two locations is a real success story. We are happy with how things have worked out, and we hope our members are pleased, too.”

Share Your Thoughts

*