(Bloomberg) —
Two of the biggest US farm cooperatives are exploring more potential opportunities between their businesses at a time when falling grain prices have pressured agriculture companies.
CHS Inc., the top US farm co-op, will explore ways to further collaborate with Growmark over the coming months, according to a Friday joint statement from the companies.
Farm co-ops have been consolidating for decades to benefit from economies of scale and better compete with the crop trading giants that dominate global agricultural markets. Expanding world harvests have been crimping profits in the sector recently, with Minnesota-based CHS earlier this week reporting a 33% drop in quarterly revenue.
CHS and Bloomington, Illinois-based Growmark already collaborate with a venture capital fund started in 2021 to seek breakthrough advancements in agriculture. Growmark, which serves nearly 400,000 North American customers with agronomy, energy and other products, also has a partnership with China’s Cofco.
“We believe that by working together we can better serve our farmer- and cooperative-owners,” CHS Chief Executive Officer Jay Debertin said in the statement.
The companies declined to comment on whether the potential outcome could include a merger or acquisition.
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