Kermit Kalb is preparing to apply potash to his corn and chemicals on his soybeans near Baldwin.
He just wishes that he and other area farmers could secure all of it from Farmers Cooperative Assn. or, more accurately, whatever cooperative ends up buying the bankrupt association's assets.
Business continues at Farmers Cooperative Assn.'s south elevator in Lawrence as the spring season looms.
Since filing for Chapter 11 protection in September, FCA's fate now rests in the hands of a judge who has pledged to seek the highest return for creditors. The co-op's largest creditor, CoBank, says it is owed $10.6 million.
But Kalb and other farmers fear that keeping the state's largest farmer-owned cooperative intact may be low on Judge John Flannagan's priority list.
"Dollars aren't everything," said Kalb, a farmer and chairman of the Lawrence-based co-op's board of directors. "His job is to get the most money back, but we need a place to do business a place to go and get supplies, feed, and sell our grain."
Last week, FCA officials filed into a courtroom in Kansas City, Kan., with hopes for sealing a deal to sell the bulk of the co-op's assets to a subsidiary of Omaha, Neb.-based Ag Processing Inc.
AGP Grain Processing, a regional cooperative, had offered to pay $4.5 million for most of FCA's elevators and other hard assets, plus market prices estimated at $7.23 million for grain, fertilizer, propane, oil and other inventories.
But Flannagan wasn't ready, and hinted during the hearing that expedience would not outweigh financial prudence on his scales of justice.
"I'm going to be pretty impatient with any argument that this case needs to be taken care of quickly. This process takes a little time," he said.
Planting anxiety
The wait has farmers and other creditors wondering how long it will be until they not only can collect the money they're owed including millions of dollars in member equity but also have viable locations to conduct business. When it filed in September, FCA said it had debts of $19.7 million against assets of $25.3 million.
Ron and Mary Lou Bowen, who farm more than 300 acres of row crops near Holton, have been doing business with the Lancaster co-op for 30 years. FCA bought the co-op in 1995.
The Bowens aren't sure what effect a sale or restructuring would have on their farm, but they do know that the sooner a resolution comes for FCA, the better.
"It's all kind of sad," said Mary Lou Bowen, acknowledging that her family farm's name Bittersweet Farms holds a hint of irony. "I'm old enough that I've seen a lot of the rural services swallowed up by the urban. But most things don't remain the same. You just have to keep moving forward."
Flannagan is scheduled to meet Monday morning with attorneys for FCA and assorted creditors in an attempt to iron out a process for accepting bids for assets.
Competing offers?
At least four other agricultural concerns Archer-Daniels-Midland Co., Bunge Corp., DeBruce Grain and Midwest Fertilizer Co. have expressed interest in bidding for FCA assets, said John Cruciani, an FCA attorney.
Representatives of Bunge, in St. Louis, have talked about getting back into the origination business in Kansas, said Don Dumler, FCA's president and chief executive officer. The company has a processing plant in Emporia to process soybeans; adding FCA's elevators would open a pipeline from farmers to the plant.
Such talk could reach a more formal phase in the coming weeks, as Flannagan determines how to open up the process to other bidders, Dumler said.
In the meantime, FCA is gearing up to keep conducting business as it awaits a resolution to its case.
FCA is owned by 3,700 farmers who patronize its locations throughout northeast Kansas and into northwest Missouri. They buy seed, sell grain and contract for fertilizer services.
"They can't all abandon us and go to Ottawa or St. Marys or Tarwater, because they've only got so much equipment," Dumler said. "We know we are going to have to operate this thing, and we think we have enough people left in the key areas to supply and furnish product. On a cash basis we have enough inventory or access to enough inventory to get the spring needs satisfied."
No comments
Commenting is turned off for this story.