Thousands of Pacific Northwest farmers soon will get a chance to invest in the flour mill and food processing division of Harvest States Cooperatives, one of the nation’s largest grain merchants and food companies.
The St. Paul, Minn.-based cooperative, which has thousands of Northwest members and grain elevator affiliates, said Wednesday that it will sell $100 million of “participation units” in the division that turns durum into pasta flour and soybeans into meal and oil.
The units will require farmers to bring their crops to Harvest States in exchange for receiving dividends on their investment.
Pending approval by the U.S. Securities & Exchange Commission, Harvest States said, the units will be offered to the cooperative’s 160,000 members in late February.
“This will give farmers one more chance to reap benefits from the crop they grow,” said Edward Hereford, a Thornton, Wash., farmer and 13-year member of Harvest States board of directors. “We’re trying to get our farmers involved in one more step of the value-added food business.”
The sale will be open only to Harvest States farmers and farm cooperative affiliates. The price of the participation units will be set after federal regulators approve the offering.
Harvest States is a major player in Northwest agriculture, with interest in four Columbia and Snake River terminals, two Pacific Coast export terminals and grain marketing offices in Lewiston, Portland and Great Falls, Mont.
Thousands of farmers are members of Harvest States and bring their crops to the cooperative’s 29 Northwest grain elevator affiliates. These include Ritzville Warehouse Co., Whitman County Growers Inc., Fairfield Grain Growers Inc., Rosalia Producers Inc., and Central Washington Grain Growers Inc. It also operates a grain elevator at 310 N. Madelia in Spokane.
The sale comes on the heels of Harvest State’s biggest year ever. But the company warns in filings with the securities commission that the success may not continue. World wheat production is up and U.S. exports have slowed, meaning demand for Harvest States flour and soybean products could slow in the future.
Harvest states reported a $51 million profit on $8.1 billion in revenue for the fiscal year ended May 31, 1996. That compared with a $45 million profit on $5.1 billion in revenue for the same period a year earlier.
Harvest States said it mills durum and hard wheats under its Amber Milling Co. subsidiary. It processes soybeans under its Honeymeal Products Co.
Proceeds for the sale will be used in part to construct a flour mill in Houston and Pocano, Penn., the filings said. The cooperative also hopes to retire old debts to members holding dividend certificates that usually cannot be cashed until age 72, or their death.