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  • By Lynda Kiernan-Stone, Global AgInvesting Media

Pendleton Grain Growers to Divest Grain Unit

Member-owned agricultural marketing and supply cooperative, Pendleton Grain Growers (PGG), is investigating options for divesting its grain business assets to a third party before the 2016/17 season. Until a transaction is completed, the grain unit will continue to buy and operate its normal business activities serving the farming sector in Eastern Oregon and Eastern Washington. The decision to divest was reached by the board after evaluating the 2015 harvest.

“The grain business is one that requires scale to ensure competitiveness, and our grain division did not attract enough handle this year for us to effectively move forward,” said Tim Hawkins, chairman of the co-op board. “Without sufficient grain producers using PGG’s grain services, it does not make economic sense to continue to operate these assets ourselves.”

The board’s first choice would be to spin off the grain business to another co-op, however, Mr. Hawkins states that PGG has been approached by exporters who are considering investing. Others who have expressed an interest include the McNary river terminal, Feedville piles and numerous upcountry elevators.

​“The decision will come down to who offers the greatest value for our members. As always, our goal is to find a balance that guarantees marketing options for our members, while also maximizing the value that members realize from their co-op assets,” says Mr. Hawkins.

PGG restructured its operations last year in a move to reduce its total debt and create reserves of working capital. At the end of June, earnings increased $4 million year on year and the co-op reports that it has the cash and income to meet its commitments and continue operating.

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