Cenex Harvest States and Farmland Industries today announced they will explore the benefits of
combining certain aspects of their grain operations.

Kansas City-based Farmland and St. Paul-based Cenex Harvest States already have many common owners and customers across multiple lines of business and are involved in several joint ventures together. Upon consideration of business direction and strategic fit, the boards of both cooperatives have directed that these discussions proceed on an aggressive schedule. The discussions will address a rapidly changing grain industry that will require continuing adaptation and a focus on efficiency and market access.

Al Shivley, Farmland Board chairman, said these discussions reflect the changing structure of the grain industry. "To continue to offer our owners the best possible grain service, it is time for the cooperative sector of the industry to bring our resources together where possible to gain efficiencies."   Elroy Webster and Gerald Kuster, Cenex Harvest States Board co-chairs, emphasized the strong relationships that already exist between the two companies. "Farmland and Cenex Harvest States have found through our petroleum marketing alliance, Country Energy, LLC, that we can work well together; and the benefit of that relationship flows both to our customers and owners. By aggressively pursuing the opportunities to work together in other areas, we would expect to generate even greater benefit to local cooperatives and producers."

N1648