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Farmland Industries

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**Farmland Industries**


Slogan	Good Food From the Heartland
Fate	Broken up in bankruptcy

Successor	Smithfield Foods (foods); US Premium Beef (beef); Koch Industries (fertilizer)
Founded	1929 (Union Oil Company); 1935 (Consumers Cooperative Association); 1966 (Farmland)
Defunct	2003
Location	Kansas City, Missouri
Industry	Agricultural marketing cooperative
Peak size	16,000 (2002) employees
Subsidiary	Farmers Petroleum, Inc.; Farmland Foods, Inc.; Farmland Insurance Agency; Farmland National Beef Packing Co.; Pipeline Company; Farmland Securities Co.; Farmland Transportation, Inc.

Farmland Industries was the largest agricultural cooperative in North America when it declared bankruptcy in 2002. The Farmland brand and its slogan "Good Food From the Heartland" is now owned by Smithfield Foods which continues to market meat products under the Farmland brand.

History

It was founded 1929 by Howard A. Cowden as the Union Oil Company (as a successor to Cowden Oil Company which he found the year before). In 1935 it took the name Consumers Cooperative Association (CCA), and in 1966 Farmland Industries, Inc. At its peak, the organization was the largest agricultural cooperative in North America, owned by 1,700 farm cooperatives in the United States, Canada and Mexico, which cooperatives were in turn owned by more than 600,000 farmer families. It had 16,000 employees in all 50 states and 90 countries. In 1977 it ranked #78 on the Fortune 100 company list.^[1] In 2001, its annual revenues were in excess of $11.8 billion. It was listed as one of Fortune's "most admired" companies. It ranked #170 on the Fortune List when it dissolved. The cooperative provided both agricultural supply and marketing services ranging from petroleum refining, fertilizer manufacture, feeds, shipping, crop production, livestock production, and refrigerated foods sales and marketing. The company was a joint venture partner with a number of other companies, including: Archer Daniels Midland in grain storage, distribution and marketing; Simplot in phosphate production; ConAgra in wheat marketing; Land O' Lakes in feed systems and crop nutrients; Cenex Harvest States in lubricants, propane and refined fuels; Mississippi Chemical in nitrogen production and shipping (Trinidad and Tobago); Norsk Hydro in phosphate fertilizer production and marketing; Wilbur Ellis Company in crop protection product marketing and distribution; U.S. Premium Beef in beef packing; and Kansas State University in agricultural research. Farmland also owned Tradigrain, a group of international grain trading companies headquartered in Geneva, Switzerland. The company operated on a cooperative basis. The member/owners shared numerous commercial and financial benefits, including the sharing of costs for the processing and marketing of goods, competitive prices, and better supply and delivery capabilities.

Bankruptcy

The company loaded up on debt in the 1990s. In June 1999 it broke ground for a 280,000 square foot headquarters on a 40-acre campus^[2] just east of Kansas City International Airport to consolidate the offices for 1,000 employees. The building was completed in 2001.^[3]

The cooperative entered Chapter 11 bankruptcy in May 2002 after failing to secure a $500 million loan to meet lender demands on cash requirements (in its filing it listed $2.7 billion in assets and $1.9 billion in debt). It was affected by a prolonged downturn in fertilizer prices, coupled with high energy prices and capital costs. The reorganization process resulted in the sale of virtually all of the company's assets, including the following subsidiaries: Farmland Foods, Inc., the pork processing division to Smithfield Foods for $367M; Farmland National Beef Packing Company to US Premium Beef for $232M; and the fertilizer production division to Koch Industries. Before January 1, 2003, the Co-Op Retirement Plan, which administers retirement funds for member cooperatives' employees, had been administered by Farmland. United Benefits Group, which took over the plan, was staffed on January 1, 2003 by former employees of the Employee Trust Administration of Farmland Industries. United Benefits Group also provides some plan administrative services for the Farmland Foods, Inc. Employee Retirement Plan and various other retirement plans. The reorganization process resulted in the sale of the company's assets, with 100 cents on the dollar going to all of the company's creditors. Farmland was headquartered in Kansas City, Missouri, with branch offices throughout the Midwest and international offices in Buenos Aires, Argentina; Paris, France; Bremen, Germany; Budapest, Hungary; Almaty, Kazakhstan; Tokyo, Japan; Mexico City, Mexico; Moscow, Russia; Seoul, South Korea; Geneva, Switzerland; Kiev, Ukraine; Nikolaev, Ukraine; London, United Kingdom; and Akkala, Uzgekistan.