Mid-Iowa Co-Op purchases minority stake in Sinclair Elevator

By: 
Robert Maharry

PARKERSBURG- Mid-Iowa Cooperative’s northward expansion entered a new phase last week with the announcement of an initial investment in the Sinclair Elevator near Parkersburg and plans to buy a controlling stake at a later date.
           
“It’ll be a gradual process over a number of years. The investment in the new elevator at Grundy has brought us new opportunities such as the investment in Sinclair,” Mid-Iowa CEO Mike Kinley said, also referencing the construction of a large new grain storage facility north of Grundy Center.  
           
According to a press release sent out on February 13, the two companies have long shared a mutual admiration for each other, and Sinclair’s facilities include one of the largest feed mills in the state—capable of producing 750,000 tons annually. Presently, Mid-Iowa which includes eight locations, operates just one feed mill, a small unit in Beaman.
           
Both Kinley and Sinclair President Roger Baker, who has held his position since 1979, see the move as a win-win for employees and farmers, and personnel changes are not expected.
           
“They have top notch personnel and facilities there and are located in a very complimentary fashion to our asset base. The opportunities for both companies to grow together are tremendous,” Kinley wrote in the release.
           
Baker has no plans to retire, and the other owners of Sinclair will remain involved in the operation for the foreseeable future.
           
The move comes on the heels of an update to section 199A of the federal tax code that the owners of private elevators say puts them at a great disadvantage because of the 20 percent deduction it provides to farmers who sell to cooperatives. Kinley noted, however, that negotiations commenced well before the change, and the timing of the investment is not tied to it in any way.
           
“It didn’t have anything to do with it. We started our discussions on this five months ago,” he said. 
 
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