Wilco grows to keep pace with farm industry
As agricultural operations grow larger and more consolidated, the Wilco farmers’ cooperative is aiming to keep pace.
The company recently merged with another cooperative, Hazelnut Growers of Oregon, and has broken ground on a new processing and distribution facility.
Meanwhile, Wilco has expanded its reach as a farm supplier through a new joint venture agreement with other agronomy companies.
“We gain size and scale,” said Doug Hoffman, the cooperative’s CEO. “Size dictates pricing, sharing of technologies, efficiencies in administration and attracting employees.”
The new facility in Donald, Ore., which will be completed in 2018, marks an expansion for both Wilco and HGO.
The hazelnut company’s current facility in Cornelius, Ore., is roughly 55,000 square feet, with separate buildings for storage and processing.
In the new building, HGO will occupy nearly 120,000 square feet and bring storage and processing under the same roof, reducing material handling and improving productivity.
With the new location, the cooperative will also be more centrally located — roughly 70 percent of its members will be within a 100-mile radius of the plant, said Jeff Fox, executive vice president of the hazelnut division.
“For us, it’s about production efficiency and being close to our grower base,” Fox said.
For Wilco, the new facility means an increase in size from 50,000 square feet at its current agronomy products distribution facility in Mt. Angel, Ore., to about 119,000 square feet.
Because Donald is much closer to Interstate 5, the cooperative expects to save hundreds of thousands of dollars in trucking costs, said Hoffman.
The building is being constructed by a real estate developer who’s shouldering the costs of its exterior, while Wilco and HGO will lease the facility and pay for interior structures, said Fox.
Some hazelnut processing equipment will simply be moved from the Cornelius facility, which will be shut down and sold, he said. “A lot of that equipment is coming with us.”
Wilco offers agronomy services and farm supplies through a joint venture with Winfield Solutions, called Wilco-Winfield, which operates in Western Washington and Western Oregon.
That joint venture is now merging with Valley Agronomics, an agronomy company operating in Southern Idaho and portions of Utah and Wyoming that’s a joint venture between Winfield Solutions and the Valley Wide Cooperative.
The deal reflects a pattern of consolidation throughout the agricultural industry, such as the proposed merger between Monsanto and Bayer, said Hoffman.
“What’s really driving all this is that our farmers are getting larger,” he said.
Though the merger between Winco-Winfield and Valley Agronomics will create some redundancies at the administrative level, Hoffman said he doesn’t expect any lay-offs because employees will be shifted into new positions.
“We’re going to grow the workforce, grow the business,” he said.
Wilco is also opening new farm retail stores in Salem, Ore., and Puyallup, Wash., and is planning a 19th outlet at an undisclosed location.
Last year, the cooperative earned $230 million in total revenues and this year it expects to earn $280 million due to the merger with HGO, Hoffman said,
Wilco typically earns profits of about 3 percent of sales, with the retail division earning the strongest net income, he said. “It’s a good model, it does well.”