Outstanding in the Field Podcast: Surviving and Thriving Through a Merger or Acquisition

Summary

This episode of Outstanding in the Field welcomes Rich Reynertson, Tracy Curtis, and Travis Antonsen to talk about mergers and acquisitions and how to not only survive, but thrive through them.

Rich Reynertson is the portfolio manager in North America for the agribusiness of Cultura. He currently has five businesses under his portfolio, three of which are in the grain and oilseed space. He’ll be talking about the area of mergers and acquisitions from his perspective, and some of the things that he looks at when acquiring companies within Cultura. 

Tracy Curtis manages the professional services and customer support group for Greenstone Systems. Tracy has a long history with Greenstone and has extensive experience helping agribusinesses merge data together and create success going forward relative to their operating systems. 

Travis Antonsen is the grain origination manager for Agtegra Cooperative. Agtegra is the result of a recent merger of the two largest co-ops in South Dakota, South Dakota Wheat Growers and North Central Farmer’s Elevator. He’ll be talking about the results of their merger and detail all the hard work and planning that went into making it a success.

Relevant Links

http://www.greenstonesystems.com
http://www.culturatech.com
https://www.agtegra.com

People Mentioned

Mike Terning
Rich Reynertson
Tracy Curtis
Travis Antonsen

CLICK HERE TO LISTEN

Transcription

Mike Terning: Hello, this is Mike Terning. I'm the host of Outstanding in the Field, Greenstone Systems’ monthly podcast. I’d like to welcome you to this episode of Outstanding in the Field. The title of this episode is called Surviving and Thriving Through a Merger or Acquisition. 

I'm excited about this episode because we have three guests on. The first one is our leader within Cultura Grain & Oil Seed in the United States. His name is Rich Reynertson. He’ll be talking about the area of mergers and acquisitions from his perspective, and some of the things that we look at when we’re acquiring companies here within Cultura. 

Then secondly, I’ll be interviewing Tracy Curtis. She leads our services area and has lots of experience in helping agribusinesses merge data together and create success going forward relative to their operating systems. She has a long history with us. She’s met many of our customers and she’s an excellent resource about this whole topic. 

Lastly, I’ll be interviewing Travis Antonsen. He’s with Agtegra. He leads the producer marketing programs for Agtegra. Agtegra is a result of the merger of South Dakota Wheat Growers and North Central Farmer’s Elevator out in South Dakota. He’ll be talking about the results of their merger together earlier this year. So, sit back and enjoy Surviving and Thriving Through a Merger Acquisition.

Rich Reynertson: My name is Rich Reynertson. I'm the portfolio manager in North America for the agribusiness of Cultura. I currently have five businesses under my portfolio, three of which are in the grain and oilseed space. Solentra—which manages the larger enterprise type customers, Greenstone—which operates primarily in North America going after the co-op and the mid-market grain businesses, and Proceres, which is really about operations. Initially focused on scale, but now moving into other logistical areas. I now have two other businesses outside of agri. One is in the biosciences space and one is in the c-store and wholesale fuel space.

Mike: You’ve also been a little bit involved with our UK grain and oilseed business through the years as well, as I recall.

Rich:Yeah. I ran that for two years. Commuted in a bus with wings going back and forth across the pond. I have recently agreed to take on a large enterprise customer there who is folded into the Solentra business, which is co-owned by AB Agri and Cargill. 

Mike: So, you joined Cultura in August of 2012.

Rich: August of 2012.

Mike: Since then, you’ve been involved with a few acquisitions. On this episode of Outstanding in the Field, we’re talking about mergers and acquisitions. How to not only survive but thrive through them. So, what are some key things that you’ve learned in the whole merger and acquisition process that you’ve gone through since joining Cultura.

Rich: Oh, wow. Since joining Cultura. Well, Mike, I don’t know if you know this, but prior to joining Cultura I’d sold three businesses. One where I was involved as the number two guy and the other one where I was the CEO of those businesses. The latest one being acquired by a little company called Cargill, which some of your audience might be familiar with. Then having joined the AGRIS team after the acquisition from John Deere. I've been involved with four acquisitions, but I've looked at many more. So, the for me, the real key to successfully driving an acquisition starts pre-acquisition making sure that you really understand what day one looks like post-close. There was a lot of emotions involved, but making sure people really understand what’s happening on day one of those first 90 days is critical. It’s the people side that I've seen it either allows you to succeed long term or present challenges. 

Mike: So, part of the exercise that you’ve seen successfully is as part of the discussions, doing a whole point on as to how we’re rolling this thing out. Not only to the customers, but first of all to the employees. What have you seen work best? Any key principles? 

Rich: Well, Mike we’re in software. So, you're familiar with the agile approach as opposed to a waterfall approach. Waterfall meaning sit back, design, think about, lay it out, and maybe deliver something three to six months later and hope it met the expectations of what was put in place. Acquisitions that don’t go very well follow a similar approach. Those that I think do better are those where in, again in that first 90 days that there’s standups, there’s communication. Questions can get asked and answered. It’s kind of an interim change management process to take a business through.

Mike: In terms of as you go through the merging cultures and bringing people on board, then reporting to stakeholders, what sort of rhythm have you seen employed that works well? 

Rich: Well, there’s the all-important business case. So, as an acquirer laying out a capital, there’s an expectation for a certain bit of return on that. I think the capital stakeholders require a pace of communication, but the stakeholders inside the organization require a pace to the communication. Those that are influenced or can get greatly affected, both customers and suppliers, is even a separate line of communication. So, it really kind of depends on the size and scope of each of those stakeholders.

Mike: I think some of the things we’ve seen used here include townhalls. I think what I've seen happen here is we have employee townhalls that are pretty frequent to behind with. Sometimes they're weekly for a while and then the pace extends to a month or what have you. Being on the employee side of it, I think that’s helped quite a bit with some of these blending of cultures and understanding what’s happening and the milestones and all sorts of things.

Rich: Oh, sure. I mean in the past of closing on a business, you know when the transaction’s finally complete. It used to be a bunch of lawyers getting in a room exchanging papers. Everybody goes out for dinner and wakes up the next day and you start the integration process. Today, it’s all done via fax or email now or PDFs. You're very rarely even sitting in a room. It’s somewhat anticlimactic from a closing perspective. In today’s world with a lot of virtual workers, having that first meeting and focusing on staff and customers and what’s in it for them and what do they expect and what can they not expect. Then making sure that in follow-up meetings, what came out of your mouth is actually demonstrated by your hands and feet. So, the communication is important, but demonstrating actions… My dad used to say actions speak louder than words. So, making sure that the integrity of the process is backed up by specific actions that are demonstratable and can physically be seen is really important. 

Mike: So, in working with the Solentra business and some of the work you’ve done in the UK. I think you’ve been seeing a rising trend with mergers and acquisitions in our space as well. From what you’ve heard from some of those large customers, what are they seeing as well?

Rich: Well, nothing stays the same. Especially in agriculture. So, I think we’ll continue to see a consolidation of supply chain as the producers get larger to be able to handle some of the new demands that are being put in place. I think with the pace of technology change and the entrance of the new knowledge workers into the space that we’re going to continue to see demands to consolidate and look at different delivery methods. You look at what Amazon and places like that are doing to the attorney retail stores and to distribution centers. As opposed to places staffed with large sales organizations and whatnot. So, I think all of that’s going to play a role in terms of how we service, how agriculture services its customers. There’s certainly lots of conversations going on that we’ve seen in back office about how do we effectively keep expanding a share of wallet with our customers. Take advantage of new technologies to do that and deal with the changing landscape. 

Mike: Rich, is there anything else you’d like to share with our audience in terms of if they're thinking about a merger or an acquisition? Any recommended advice you’d consider giving them?

Rich: I think the business case always plays a key role in terms of the capital outlay and input, but to me, that’s the academic part of it. It’s the managing both customer and employee expectations is key to making any acquisition strategy work. Like in the purely MNA journals, there’s only 70% of acquisitions actually meet the expectations of the acquirer or the acquiree. So those that are successful focus heavily on day two and outward, pay close attention to employee and customer expectations, and make sure that as you communicate change that you keep those things in mind. Respecting the past while you seek to drive new things in the future.

Mike: Well thank you very much for your time today Rich.

Rich: Well, hopefully, it was beneficial Mike.

Mike: Okay. Thanks again. I've been working with Tracy Curtis since the year 2000. One of my first introductions to Tracy was when she called me up on the phone and assumed that I knew her. She just started talking a mile a minute. We’ve been working together ever since. So, it’s been fun working with her. 

She has the rare quality of being able to inform a customer of something that the customer might not be doing right in such a way that it endears the customer, or it endears her to the customer. So that’s one of the many things that I really appreciate about Tracy is her ability to tell the customer the truth, level set things, and the customer really appreciates that. She has a great way of doing that. 

Although she’s lived in Georgia for, I think, a couple of decades now, she is from Missouri, the “show me” state. She certainly lives by that motto, show me. She’s one who wants to make sure that you know what you're talking about. When she senses that you don’t, she’s going to challenge you on it. I really appreciate that about Tracy. I’m happy that she’s on our team and has agreed to do this interview today. 

Tracy Curtis: Good morning, Mike. Yes, I’m Tracy Curtis. I manage the professional services and customer support group. I've been here 21 years. I think other than development, I've been in almost every department.

Mike: You certainly have. You started in support, was it?

Tracy: Implementation. Implementation then went to business analyst, product management. I helped launch a product when we were with Deere, and then ended up in managing professional services.

Mike: Most of our customers know you.

Tracy: I'm not sure if that’s a good idea.

Mike: It’s a good thing, it’s a good thing. Tracy, in this addition of the podcast, we’re talking about how to survive and thrive through mergers and acquisitions. As you’ve rolled with us for quite a few years here now, I know you’ve helped a lot of our customers with mergers and acquisitions. Can you kind of describe to me some of the services that you and your team provide to the customers as they go through the acquisition?

Tracy: Sure. So, I think what’s really important is that even though you have two cooperatives and one is the survivor and one is not the survivor, that you get the groups together and talk about processes. So, what we like to do is we go out on site and do basically an analysis with each department. We have users that are from the surviving company as well as those that are coming in. We sit down and really just talk about how things are going to work now that they're going to become one. 

I feel that’s a good idea because the newer company that’s coming in, you're trying to get their buy-in. You're trying to pacify them. In the end, it may be laying down processes that are already in place. It brings to light new processes that they may not be aware of. So, we offer that type of service to go through processes. 

One of the other things that we do is conversions. So, talking through the data that one company has and the data that the other company has and how we’ll bring that together. For example, customer names. The surviving company, or both companies, may be close to each other. So, they have customers that have done business with both people. How do you bring that data together and end up with just one Mike Terning versus two Mike Ternings and one statement for you? So, customer numbers might be the same. How do we renumber new customers? 

Another thing that comes out is fuel customers. Especially if you're renumbering new customers, you have fuel cards. So, do we need to help you come up with a list of customers that have to have new cards and when do they have to have?

So, we put together a plan after talking through the analysis understanding how we’re going to do the data conversions. Then we give a detailed plan as to these are the things that need to happen. Then sit down with the customer and go, “Okay. What are the pieces that you want to own and what are the pieces that we want to own?” 

A lot of times, the co-op or company will choose to train the new employees. They feel that because they want to make sure they’re doing “their processes”. We’re certainly okay with that as long as you’ve sat down and talked about all of the processes that are going around.

Mike: So, this pre-onsite analysis that you do. Typically, it’s on site, right?

Tracy: Correct.

Mike: You typically meet with both sides before they have merged together. Or is it one side?

Tracy: Well, we like to meet with both sides. We’re actually doing one right now and both sides are present. 

Mike: And how long? Is that a couple of days?

Tracy: It’s at least two days. Then we’ll provide an agenda and we’ll meet between usually about four hours per department. So, depending on the size of the company and the number of departments that they have. We like to at least give four hours to go through what their needs and processes are. I think they’re needs and what does come to light is the person that is using our system. It may be both people are using our system or we’re bringing them together that way. Generally, the surviving one, they don’t realize how much they’re not utilizing of the system.

So, when you're talking about processes and somebody may bring up, “Hey. How do you handle this?” They're like oh this is what we do. We sit around and look and go, what? Why are you going through all those steps when it could really become more efficient? So, I think really it comes to light that they're not as efficient as they should be or could be. 

It’s kind of like if it’s not broke, don’t fix it. So, people are using AGRIS in a manner that gets their job done. We’ve made a number of enhancements or improvements that could help move that along into a smoother fashion, but they’re just not aware of it.

Mike: So, when you and the customer see those sorts of opportunities, what sort of decision making takes place to determine whether or not they want to do the process change premerger, during merger, or post-merger?

Tracy: I think it depends on the process improvement. Most of them like to make the change pre as we’re going through because they are going to be training new people. So, they want to bring them up on the new processes versus bringing them up on an old process then doing the change. That’s when you get into okay. Well those new people aren’t the only ones that need to be changed. We need to bring in the old folks. We may need to make some changes to the data set so that we can help facilitate that. So, we definitely want to have the data set in a manner that we’re going to kick off the new company at whatever date ready to go. 

Mike: You mentioned a little earlier some of the data conversion challenges and that. What are some other challenges that you and your team experience during the migration process, during the conversion of the data and during the role out of the system and to the united organization?

Tracy: I think a lot of it is getting the buying of the employees. We end up working with both sides, right? It’s very evident that the merge company, in some instances, hasn’t been talked to and basically handed a piece of paper that says this is what you're going to do, and this is how it works with no input given. It is a struggle. They don’t appreciate that. That kind of comes back on us even though it’s not us, right? They look to you as kind of the bad guy. We’re really not the bad guy. 

That’s why I think the whole getting the company together, especially all the department heads and even down the worker though and saying here’s what we’re going to do. Here’s how we’re going to do it. We need your input. We’ve seen companies lose good people because of this.

Mike: So, it’s almost that sort of the new culture needs to be enforced or put into place as soon as possible to make this successful.

Tracy: Right. I think of it like a new implementation. We do a kickoff meeting with the organization and we say here’s the plan. This is what’s going to happen. We need to do a kick off meeting, or even the merger needs to do a kick off meeting with the company that says hey we’re all going to become one on 9/1. This is what we’re doing.

Mike: Would you say that’s also… If that doesn’t take place, is that typically the largest stumbling block there is in having a successful merger? Not having the leaders really reinforce the new culture and what’s going to happen with the processes going forward? Is there something else?

Tracy: No, I think it is. You can convert data. It is a challenge, but you need to look and decide if you're going to sit down and enter it and use it as a training tool? Or is there just too much data out there and we really need to take a look at it and bring it into our system. There’s challenges that way, right? When you have different commodity codes. We've got to bring it under our code, different discount schedules we need to bring it under. So, is it worth the data manipulation or is it better to take that as an opportunity to train people?

Mike: So, we’ve kind of talked about what happens before, during. What are some of the things you’ve seen after a merger takes place that have lead to successful unifications? Have you seen anything that works well?

Tracy: I think if you do the training right and you prepare your people, it works well.

Mike: Do you ever go back into the unified organization, say five/six months later, and maybe start to talk about or reintroduce the business process, optimization ideas, and help implement some of those things after the fact? 

Tracy: Yeah because I think as you're talking through processes, especially if somebody’s merging and they don’t have a department. For example, if you're a company maybe you don’t have a feed department. So, we talk through the feed processes that these new people are used to doing. But once you get into it and they really start utilizing the system, perhaps they weren’t a user, things come about that oh, this is what they meant. Or that type of thing. Yes, we do go back and try to help improve on processes.

Mike: Okay. On the occasions where you do go back in months later, any observations that you see?

Tracy: I think anytime somebody lets us come back in and do observations, we can help them improve a process. Even if it’s just one or two. We are doing things within AGRIS that can help, but if you're reading your email, they don’t interpret that to them and to their job. So, we can help bring that to light by sitting down and just going hey these are the new things. This is what you could be doing and so forth.

Mike: Have there ever been any circumstances where you or your team have gone back in months after the initial unification date, and you’ve just noticed boy this isn’t looking good. Maybe it’s a culture thing. Maybe lots of dissatisfaction, anything like that. Any tips that you could give on preventing them other than what we've talked about through communication. 

Tracy: I mean we have seen that, right? I think that stems from good communication or not trying to get their buy-in. Don’t slam a merger down all the other employee’s throat. Let them have a voice.

Mike: Well, we've certainly seen a lot of mergers through the years. This year, we've experienced a couple of large mergers in the industry that we've assisted with. With, thanks to you and your team, great success. 

Tracy: I think we've had a really successful merger, couple of them. Hopefully we’ll continue to do that because the industry is, that’s where it’s headed right? I mean the last one we did, granted it was a large one, I mean we spent an entire weekend importing files and verifying data. I would hate to have thought how long it would have taken to manually enter that.

Mike: Let me ask you one other question, Tracy. Do you enjoy doing this type of service for our clients?

Tracy: Oh, I do. Yeah.

Mike: What do you enjoy about it?

Tracy: I think with us getting in there, we do help facilitate out the communication piece. I feel good when I can assure somebody that isn’t used to our system or just coming that we’re really there to listen to their voice and take things into consideration. It isn’t just a slam dunk.

Mike: Anything else you’d like to inform our audience about, Tracy, on how to not only survive a merger, but also thrive in the unification?

Tracy: Well I think you don’t try to do it alone. I will say that we have recently had customers, even customers that we've helped today. They’ve done mergers on their own because they're the small ones in their mind. Now they’re merging with larger companies, so that’s why they're reaching out to us. I would say even in a small merger, at least reach out to us and let us help you formulate the plan. If you want to act on the plan, that’s fine. Let us help you formulate the plan because we’ve done it.

Mike: I had the privilege of having lunch with Travis at the National Grain and Feed Association Country Elevator annual conference in Louisville, Kentucky back in early December. We sat at a table with some grain regulatory officials. Coincidentally, we ended up meeting again here in Sioux Falls, South Dakota as we were invited both as speakers at the Association of Grain Regulatory Officials annual conference in Sioux Falls. So, it’s been fun getting to know Travis a little bit. I really appreciate his perspective on working with growers and grain marketing and just the way he goes about it. He’s a very pleasant gentleman to speak with, and I'm happy to have him on the podcast today.

Travis Antonsen: I'm Travis Antonsen, grain origination manager for Agtegra Cooperative. I've been with a cooperative for going on nine years, back to its legacy roots at South Dakota Wheat Growers. 

Mike: Prior to Agtegra, who were you with?

Travis: I was with South Dakota Soybean Association, soybean processors. They were crushing beans in Bowdle, South Dakota and Brewster, Minnesota. I was at both of their plants there. Prior to that, I graduated at South Dakota State University. I was able to get an internship with South Dakota soybean processors during my junior year. It turned into a full-time job when I graduated. 

Mike: They're the jackrabbits, right? 

Travis: Jackrabbits, yes. That’s correct.  

Mike: The very up and coming ag school. It probably has been for a while, but it’s getting a lot of attention these days it seems.

Travis: Yeah. More and more attention. Especially since they just went to D1 in athletics, and more recognition and more money coming in for research and things like that too. So, it’s changed a lot since I've been there.

Mike: It’s got a great reputation. Super. Well this episode of the podcast is about surviving and thriving a merger or acquisition. So why don’t you give the audience a little bit of background about what’s happened and how Agtegra has basically formed. 

Travis: Sure. So as of today, we’re five months and 23 days old. We came as a result of a merger between the two largest co-ops in South Dakota. Grain Agronomy Fuel and Feed. So, South Dakota Wheat Growers Association and North Central Farmer’s Elevator came together on February 1. So, prior to that… Let’s see. That would have happened in September with the February 1 unification date as we’ll call it. So, it was very, very busy from September when the vote was finalized with the membership between both co-ops and then when implementation actually hit the ground running in the fall. Then we were ready to go and put together as one on February 1.

Mike: This was really the second attempt as well, right?

Travis: Correct. Yeah. We had tried two years ago. The board of directors got together and said, “Hey, we need to look at this. We’re duplicating a lot of assets. We have a lot of producers doing business with both of us. A lot of the locations we’re doing business in the same communities, wasting a lot of producer’s money.” Then they say, “Hey can we do things between together?” We found I think the first pass around we had $11 million in inefficiencies. Then we said, I think these are real and they're there. So, we put that to a vote, I believe it was 2015. I believe so. The vote failed by, I think it was 40 votes on one side. So out of 7,000ish agri-growers between the two, 40 votes kept us from joining back then.

So, merger talks were left alone and then were picked back up. The board says, “Hey if those were truly there, we need to look at those again.” They did revisit that and brought the membership to a vote again in 2017.

Mike: What do you think caused the first vote to fail? Did anybody do any sort of root cause analysis?

Travis: Not really. I mean everybody had their own thoughts and things like that. It was kind of before the Monsanto-Bayer. We’re seeing the consolidation happen everywhere in ag, whether it’s on the input side of the grain side. You're seeing consolidation happen worldwide. I think we’re maybe in front of that a little bit. Now as that’s happened, Monsanto-Bayer put together. Dow-DuPont. Stuff like that’s coming down the pipe. Hey maybe we should look at this again and take a look. A lot of things probably went into it, but maybe just a little bit before our time.

Mike: How are you defining success? 

Travis: Being open every day, having a bid. Having systems up and running, that says hey, we’re able to buy grain. Just being functional was goal number one. Maybe pull that size and scope and the amount of people together into one. There’s roughly a third of the employees that had to learn a new system. Making sure that our customer service didn’t drop. That was probably goal number one. Then once we get that, where we go from here as far as now we’ve got to prove what they were saving—the $11 million plus. That was probably the measure of success there was that seeing drop in service, drop in availability, making sure producer’s grain was still there and checks were good, and processes worked.

Mike: So, leading up to that, how did you get ready for day one?

Travis: A lot of time, a lot of planning all fall. The last nine months has pretty much been consumed with a lot of that. Planning and getting together as soon as the vote was final. We didn’t have a name until after, they started working on that after we got a vote approved. So that also started the wheels turning on hey what does the grain look like? What does agronomy look like? Getting stuff put together and what do we have to tackle. That started in September. A lot of work, a lot of meetings, a lot of planning and getting information down to the field level and also information back up from the field level. Hey this is a good chance to change what we do and why we do. That was a lot of it.

Mike: Did you have any third-party assistance with the whole transition?

Travis: Yeah, we had a little assistance from our parent co-op or one of the regional co-ops. A little bit of assistance. You’ve been through it before a little bit on that. So, we kind of learned it from past experiences, probably more. More of what helped there I think. 

Mike: In terms of, so you mentioned you're five months 23 days into it. How much grain have you handled during that time frame? Do you have a rough amount?

Travis: We’re 110 or 115 million in a short six-month time period. So yeah, I’d say what really went well. February first hit and the markets really started to appreciate. We had a good cash price rally and producers sold a lot of grain in Feb, March, April. I think we were almost at a point where we were too busy to think about it. It was just go, go, go. Yeah, we’ve had a good year. Forecast to hit around 240/245 million will be our yearly handle as long as we have production.

Mike: Well that’s pretty impressive. $115 million in five months, even six months. 

Travis: Yeah. That’s not even your harvest window. That’s your post-harvest. 

Mike: So, in terms of merging cultures, how did Agtegra go about doing that?

Travis: It took a lot of time, a lot of focus on that. A lot of it’s not us versus they, it’s we. So, we spent a lot of time on… It’s sort of the point now where we’re not saying legacy co-ops. It’s we. It’s Agtegra. So, it was a lot of we may have went to bat against each other and competed, but now we’re one. So, it’s a lot of focus on that. A lot of time spent on that.

Mike: Did you have many employee meetings where that was part of the discussion?

Travis: Yeah. I’d say we probably over communicate a lot of stuff. Really you had to make sure your employees were on board and in with it. So yeah, we spent a lot of time, a lot of location visits, a lot of patrons. You know patrons as well. They have some of the same concerns of the employees of what’s going on? What’s change going to look like? It made the winter go really fast.

Mike: I bet it did. They usually last a while. 

Travis: They can last a while, but yeah. It seemed to fly by this year. 

Mike: Well, one of the things I've noticed driving through South Dakota is your signage. I was impressed that every agri-facility I've driven by has a beautiful new sign up. How did you guys pull that off?

Travis:  Planning, planning, planning. We had that all laid out, signs ready to go, inventoried. We want to have an image on day one of being Agtegra and not one of the parent legacy co-ops versus the other. So yeah. Maintenance staff and everybody had that all laid out and planned. When we hit the ground running Feb 1, we had signage. Actually, it started the weekend prior to, we started putting some stuff up. We made a concerted effort of here’s our image, here’s who we are. Getting that done day one and not letting it drag on.

Mike: You had some pretty good social media posts I noticed as well February 1 when it opened.

Travis: Yeah. We definitely hit the ground running with that and image. Then we got our mission vision, kind of put a statement out as well. So been working on all that.

Mike: So, this morning I learned that you serve about 7,000 producers helping them market their grain. What are some of the challenges you're seeing this year versus prior years in helping them?

Travis: Taking advantage of marketing opportunities when they exist. Being a little too caught up in the backyard-itis kind of thing. We had great opportunities this spring. We had those same opportunities a year ago when the market fell off. I’d say that’s been the biggest challenge is trying to make sure the guys are marketing when we had profitable numbers to market from old crop and new crop. I’d say they did more than they have in the past. They’re also looking at the weather. Thing is, it’s going to be a little bit dry in the Dakotas. Which it started out fairly dry, but as we sit here today, and the crop looks really good, producers wish they had more new crop sales on the books. That’s probably the biggest challenge is getting them to execute and take advantage of those opportunities when they exist.

Mike: Have you—you don’t have to answer this if you don’t want—have you moved all your old crop at this point?

Travis: No, not yet. The market is still showing good carries in the market. So yeah. We’re still working through inventories, but kind of hitting the fast forward button as we’re looking at potentially another good crop coming in. We’re still supplying ethanol plants for another two months until we get to knew crop. So, there’s still a lot of old crop sitting both commercial and on farm.

Mike: I drove by a terminal this morning that had a couple of really large ground piles still. 

Travis: Yeah. There’s a fair amount of piles still throughout South Dakota.

Mike: What sort of mix do you typically get of producers marketing new crop in advance? Forward contracting. What percent of the crop do you typically?

Travis: Typically, I would say a third, a third and a third. A third’s forward contracted. A third might be spotted out, and a third is marketed later. Usually a good rule of thumb.

Mike: How long has that been in place or [inaudible] is that?

Travis: You know we went from pretty much all wheat, majority wheat as a cash crop in South Dakota. Now the corn and beans. So, the last 10 years I suppose. All sorcrossination [38:41 ph?], they’re probably half marketed from what I hear talking to growers that took advantage of really good soybean prices back in May. And corn prices for that matter. So, we feel a little bit higher than that this year, but average is probably a third.

Mike: Any concerns about how you're working with growers with these Chinese tariffs on soybeans? How are you helping your growers through that?

Travis: A lot of holding hands and trying to plan for when they do come back to the market or when somebody’s in the market. Right now, there really is not a lot of demand for South Dakota beans growing off the pacific northwest. It really doesn’t, at this point, time doesn’t look that great for new crop. Somebody will need our beans. The world’s going to need soybeans somewhere. Definitely talking with them about what potential could look like. Maybe a January forward marketing window versus a new crop marketing window. It’s kind of walking them through them steps and what it’s going to take to get there and what we’re gonna do when it does show up. Cautious optimism I would call it.  

Mike: Yeah. If we listen to the news a lot, it can be a bit of a downer, right, and overwhelming. I suppose you look at your historical trends and basis on those and try to keep going the same. You’ve probably been through this before.

Travis: Yep. 

Mike: Been a while.

Travis: Now it’s kind of the older fellows in the industry are kind of reverting back to what the early ‘80s looked like. There’s not a lot of those people still left that remember a lot of that of actively being involved in the industry. We go back to trade wars and tariffs and things like that. It’s a little bit unprecedented. 

Mike: As you’ve heard today, surviving and thriving through a merger acquisition depends a lot on the planning of the merger and acquisition. A bit element of it as well, as you’ve heard, is the culture. Creating a culture of collaboration going forward rather than competition. Then lastly, lots of people who have merged or gone through acquisitions is they rely on third parties to help them be successful through the transition and even beyond. So those are a few takeaways from this episode of outstanding in the field. Thanks for joining us. 

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