What started out as a venture by 25 farmers to get a better price for their grain in 1908, has turned into $475 million business 100 years later.
The Aurora Coop of Aurora is celebrating its 100th anniversary this year.
According to George Hohwieler, Aurora Cooperative's president and CEO, what drove those farmers to form the cooperative was desire to have more control over their livelihoods.
"It didn't seem right to them that prices at the terminal market were considerably better than the prices paid to local farmers," said Hohwieler said.
And from that dissatisfaction, he said they started a cooperative that continues to grow 100 years later.
Hohwieler said that on Feb. 15, 1908, the Aurora Elevator Co., known today as the Aurora Cooperative Elevator Co., was incorporated in Aurora.
"Cooperatives were following a new set of ideals in the early 1900s and were rising in popularity," he said. "That by no means ensured success. The cooperative's pioneers worked tirelessly and recognized that they would have to continuously adapt if they were to succeed into the future."
According to Hohwieler, within weeks of forming, the company had raised $9,800 and in August 1908, a 31,000-bushel, wood-cribbed elevator had changed the Aurora skyline. By the end of that first year, the company handled 128,721 bushels of grain --much of which was wheat. Accounts receivable stood at $3.
"That early success brought farmers from a nearby community who wanted to join, giving the company two locations by 1910," Hohwieler said.
Hohwieler said that next growth outside didn't occur until 1969. Then in the 1980s, he said mergers and acquisitions came more frequently.
"As we celebrate our 100th anniversary this year, we serve members and patrons in 43 locations across Nebraska and into Kansas," Hohwieler said.
In its 100th annual report, he said the company reported record 2007 sales and income of $475.0 million and total net earnings of $23.5 million.
It also approved $12.0 million in patronage refunds, with $5.6 million of that being in cash payments to members, the largest in the history of the cooperative. Grain storage capacity stood at 38.2 million bushels and the company employed 460 people.
"We had a good year in 2007," Hohwieler said, "but that was possible because of the hard questions the company's management and board asked themselves over the past 100 years."
He said that to be successful a cooperative must be able and willing to change as quickly as possible, with an eye on helping members succeed to gain their continued support and loyalty.
"Aurora Cooperative continuously faces challenges -- and we've been fortunate over time to see those as opportunities, respond with a solid plan and then have the courage to act and follow through," he said.
That philosophy has been true through the years that helped the cooperative through the Great Depression and Dust Bowl of the 1930s, its expansion of grain storage during the 1950s, its decision to enter the petroleum business in the late 1960s and the mergers and acquisitions in the 1980s and 1990s.
Hohwieler said thE ability to be nimble and adapt to the ever changing global agriculture market led the coop to be one of the pioneers in the development of Nebraska's ethanol industry.
And now Hohwieler said, as the co-op embarks on its second century of existence and meets the challenges of a constantly changing agriculture industry, its patrons and board decided to build its latest endeavor, Aurora West -- a multi-faceted, 142-acre agribusiness campus that became the largest project in the cooperative's history in April 2006.
"It took a lot of effort by patrons, employees and the board to get the pieces of the puzzle together and make Aurora West happen," Hohwieler said. "Today, Aurora West represents a class-leading model of how North American agri-business will operate in the 21st century and beyond."
He said Aurora West will include a 226 million-gallon-per-year ethanol plant, which is under construction; a state-of-the-art grain handling facility; a dry fertilizer complex, and a double loop railroad system serving the entire Aurora West complex. A 75,000 square foot warehouse leased by a seed company occupies a corner of Aurora West, while in the opposite corner a 50 million-gallon ethanol plant has been operating since 1994. There is also land available for future development.
Hohwieler said the cooperative built and operates the grain and fertilizer terminals and is the exclusive grain supplier to the existing and new ethanol plants. Aurora Cooperative will also market much of the ethanol co-product distiller's grains to local livestock operations.
"The facilities planned and built by Aurora Cooperative at the Aurora West campus will allow us to better serve patrons and customers -- and provide important efficiencies during these exciting times in agriculture," Hohwieler said.
He said cooperatives are as relevant now as they were 100 years ago when it comes to allowing farmers to determine their own future in the global marketplace.
"I think it is becoming very relevant today in this chaotic, global market," Hohwieler said. "All of a sudden there's a relevance in coops and the cooperative system. Maybe not the exactly the way it was setup 100 years ago, but just as important."
He said the reason cooperatives were formed and the Capper Volstead Act was passed in 1922 (to authorized agricultural producers to form voluntary cooperatives for producing, handling and marketing farm products) was that "farmers felt they did not have the ability to access markets because of such large entities dominating the marketplace at that time.
He said if the co-op movement didn't take place early last century, the marketplace for farmers would now be totally different and the landscape dominated by a handful of multi-national private grain companies.
"These are companies that would have taken the wealth and value that is produced through the Platte River Valley and move it from other places," Hohwieler said.
He said the key now and into the future is allowing the farmer "to have a true say" in how their grain is marketed.
"I think all of a sudden, the relevance of the cooperative system is back in play," Hohwieler said.
He said members expect the company to adapt as the marketplace evolves, to drive change within the cooperative and to work as hard as they do -- all while maintaining the values and integrity the cooperative was founded upon.
"As years turned into decades, this business philosophy and determination built a reputation that has served the cooperative well," Hohwieler said. "Our name stands for something and has 100 years of history behind it."
Aurora Cooperative Milestones
- 1908 -- Aurora Cooperative is formed
- 1934 -- Omaha Bank for Cooperatives was organized, providing the cooperative with an operating loan during the Great Depression and widespread drought
- 1943 -- The cooperative's by-laws were changed to allow patrons who could not previously own stock to earn shares; this significantly increased business
- 1955 -- The company's first anhydrous tank allows it to cut anhydrous costs by members in half
- 1959 -- Aurora Cooperative becomes the second-largest grain elevator company in the state
- 1962 -- Sales reach $3.0 million; the only debt is on a feed mill built the prior year
- 1975 -- Sales surpass $33.0 million
- 2001 -- Online statement viewing becomes available
- 2006 -- Groundbreaking takes place for Aurora West, the largest project in the company's history
- 2007 -- Sales reach $475.0 million, grain storage capacity stands at 38.2 million bushels and the company has operations in 43 locations
- 2008 - Aurora Cooperative celebrates 100 years
Courtesy of the Aurora Cooperative
