Frequently Asked Questions

Below is our base of frequently asked questions with answers. We will strive to keep this section growing and up-to-date with the feedback we are gaining from our member-owners. You are welcome to submit questions to laura.underwood@fivestar.coop for answering or use the Contact Us page.

What have the boards decided?

A:         In February 2020, the Boards of Directors of Five Star and Farmers Win met and voted to sign a Letter of Intent to pursue the study of unification of the cooperatives. Over the last 11 months, employees from both cooperatives have completed a Due Diligence study and presented those finding to the joint Boards. Each employee team recommended proceeding with the unification process. On January 14, 2021, the joint Boards signed a Definitive Agreement to move forward with a member vote to merge the two cooperatives.

What is due diligence and what are the findings?

A:         The due diligence process identifies opportunities and benefits for both members and employees as well as any potential risks to mitigate during the merger process. Employee teams from both cooperatives formed 8 department/business unit teams to investigate the due diligence for this potential merger. The benefits for members include the ability to continue to grow successfully in the future, leverage investments in facilities & technology over a larger business, ability to best support talent resources, and operations best practices implementation.

Are both cooperatives financially sound?

A:         Yes, both companies are financially sound with strong balance sheets. There have been multiple business ratio evaluations determining that this would be a merger of equally strong cooperatives.

Are we limiting competition?

Both cooperatives are aware of some member-owners’ concerns in regards to limiting competition and the potential impact on their operations. In recent years, we have experienced significant growth of competition within our footprints to the point of saturation. By unifying our cooperatives, we will be taking on today’s competition and those in the future who come in with more untraditional assets. Below we have included two maps, one for Agronomy and one for Grain, to show competitors with physical assets near our own. Not specifically shown on those maps are a new style of competitor
through online grain origination or online ag retailers.

We want to continue to be highly competitive with a successful merger by creating a cooperative that is stronger together than alone. The cooperative structure lends itself to pass the gained efficiencies back to our member-owners through strengthened price points, improved services, and patronage.

What will it take for a successful member vote?

A:         Under Iowa law, both cooperative’s membership must have 50%+1 ballots properly returned and of those, there must be a two-thirds majority in the affirmative. If one side fails to meet either of those thresholds, the merger will be unsuccessful and both cooperatives will continue to do business as separate entities.

How many board members would the combined cooperative have?

A:         The newly merged cooperative will have 12 board members represented by members from 4 informal districts.

If the merger is approved, how will equity and patronage be handled?

A:         If the merger is approved, the new cooperative will have a fair and equitable approach to patronage and equity distributions. All current allocated equity will be redeemed consistent with each cooperative’s past practices. Existing and future equity allocations and redemptions will remain at the discretion of the Board of Directors.

How will employees be impacted?

A:         Employees are our most important asset and there is a potential role for them in the new cooperative. Roles may be different and job responsibilities may be shifted, but opportunities for employees will be greater. Decisions on specific benefits will be made after a positive member vote. Benefits are anticipated to be competitive and consistent with current offerings.

Will member services change?

A:         If the merger is approved by the membership, the cooperative will work to enhance current services for members and continue to offer products that support our patrons in this competitive environment. With the combined footprint, we will be able to leverage locations, assets, and employees to better service the membership.

Will the merger reduce competition in the marketplace?

A:         There are significant competition with physical assets in our local marketplace today for all departments and there will be in the future. There are also those competitors who we will not see with physical assets in our footprint but as an online marketplace with an endless reach. As a cooperative, we are owned by producers and operate for the benefit of producers. This proposed unification will not change that.

What happens after the voting period ends?

A:         Should both Five Star Cooperative and Farmers Win Cooperative members vote to approve the merger, the target effective date would be late summer 2021. During that time, departments will evaluate and create go-forward strategies that will allow for a seamless transition into the newly formed cooperative. Until then Five Star and Farmers Win must continue to operate separately.

What will the name be?

The new cooperative will boast the name of Farmers Win Cooperative as decided by both current Boards of Directors.

Where will headquarters be?

Although day-to-day at your local cooperative will not be affected, headquarters will be in New Hampton, IA.

What will the logo be?

While both have a long history, a new logo with be developed paying tribute to the historical five stars in the Five Star logo.

Who will be CEO/GM?

After a successful membership vote, the two current Boards of Directors will select the go-forward CEO/GM.

What timeline will things be taking place on?

The Joint Boards of Directors have established a longer timeline for a member vote being mindful of the seasonality of our industry and CoVid-19 precautionary measures. The health and wellbeing of our employees
and members will remain a priority throughout this process. There will be employee training in the coming weeks and expect someone to be reaching out to talk about our merger. We will be mindful of spring planting but keep watching your mailboxes and inboxes for more merger information. In-person membership meetings are targeted to take place in early July with virtual options as well. Those will be fluid around CoVid-19 restrictions/executive orders. Ballots are expected to mail in mid-July with a special meeting to certify the election results in mid-August.