Landmark Services Co-operative

Larry Swalheim, CEO
Landmark Services Co-operative

Landmark are a very successful Co-operative. In the last year there sales grew from $235 to $332 million with profits increasing from $11.2 million to $14.8 million. For some co-operatives “profits” is a dirty word, not so for Landmark. During the year $41 million of cash was paid back to members – Cash patronage of $2.8 million and $1.3 million in equity distribution.

Since 2006 Landmark has increased the cash proportion of equity from the legal minimum of 20% to 30%.

Each member is required to accumulate and maintain a vested equity account of $2,000. The Co-op aims to reduce the time taken to revolve equity over $2,000 from over 20 years to the goal of 10 years.

Landmark have four main divisions, these are Energy, Animal Nutrition, Grain Marketing and Agronomy, they also have two smaller Transport and Retail divisions.

Energy Division – This includes supplying heating oil, diesel and propane (used for grain drying as well as domestic use). They also own 5 filling stations. Last year they sold 40 million gallons of fuel.

The Animal Nutrition Division supplies a wide variety of livestock enterprises from five locations. Last year they sold $43 million of feed products.

The Grain marketing division has grain storage for 12 million bushels. They have the facilities to load a 100 car train with grain. This gives them a lot of options on where they can sell their grain.

The agronomy division includes sales of seed, sprays and fertiliser along with a team of Agronomists to give advice as to how to use them. This division also has a precision contacting arm which includes John Deere 4930 sprayers with a 120 foot boom and GPS precision fertiliser applicatiors.

The retail division consists of 5 convenience stores (part of the aforemention filing stations), a tyre centre which includes two vans which operate 24/7 to fix tractor tyres and one hardware store. In addition to the five manned filling stations Landmark also operates three unmanned Pump 24 stations.

The transportation division provides the haulage services needed by all the other divisions of the Co-op. This includes 14 “semis” as well as a range of smaller vehicles.

Landmark has 5,000 producer members. These are the farmers who trade with the co-op. Only these members have a vote. They also have another 50,000 customers who are called ordinary members. These are ordinary members of the public or other mall businesses who use the filling stations, buy bulk fuel or use the hardware store and tyre centre.

The co-operative is currently attracting around 80 new members per month with around 20 of these being farmer producer members.

The normal number of Directors on the Board of Landmark is nine. At present it is eleven as they recently merged with another co-op. Two directors came in from the board of the other co-op. Over the next two years as elections are held this will again drop down to nine.

There are three electoral areas, with each area electing 1 director each year for a thee year term. The Board has a nominating committee which trawls the membership for possible candidates for election to the Board. A profile is done on each candidate which is sent out to members along with the postal ballot paper.

New directors are given a thorough briefing by all the division managers as well as the CEO and CFO and are taken round all the companies various operations.

Each year Directors have a minimum of four days training, including a two day retreat.

Director’s pay is modest with $500 being paid for a full day meeting and $350 being paid for a half day meeting.

The Board has a Growth and Opportunity Committee. This spends its time looking for new opportunities including mergers with other co-operatives.

The Board has no term-limits; however the Board does carry out succession planning and Board evaluation. There is a reasonable turnover of Directors on the Board.

The Board has defined written “Position Objectives and Responsibilities” for both the CEO and the Chairman of the Board. The CEO’s objectives and responsibilities is broken down into a number of areas and extends to five pages. The Chairman’s is a little over two pages long.

Landmark will not take on any new project that has less than a 12% projected return on Investment. If returns are lower than this it’s better not to make the investment and return retained equity to its members.

I was incredibly impressed by this operation. The CEO wore a company polo shirt top like the rest of the employees As we went round some of the various operations I was struck by the rapport the CEO has with all the staff right down to the truck drivers. It felt very much like an organisation where everyone was pulling together.

Landmarks Mission Statement reads
“We are a Cooperative business dedicated to providing rural and urban customers with the highest quality products and services. We will enhance producer profitability, exceed customer expectations and keep our co-operative financially strong.”

It was evident to me that these are not just empty words.

Every Chairman and CEO of Irish Agricultural Supply Co-ops should book a space on the next plane to Madison to see this shining example of a thriving and vibrant cooperative.

For completeness I list Landmark’s Vision Statement Below:

We will anticipate and meet the future needs of our customers by:
• Conducting our business with the highest ethical standards.
• Positioning our co-operative to be financial strong.
• Evaluating growth opportunities to better serve our customers.
• Adapting the latest technology to gain maximum efficiency
• Informing our customers of the benefits of co-operative membership.
• Developing values customer relationships.
• Promoting pride of ownership with an aggressive equity revolvement program
• Hiring, educating and retaining the best employees
• Building a strong image in the marketplace.
• Being good stewards of our natural resources
• Supporting the communities that we serve.