MEMBERS VOTE TO DISSOLVE U.S. FARM CO-OP
The shareholders of Illinois
Cooperative Futures Co voted to dissolve the 26-year-old firm,
the futures trading arm of 85 farm cooperatives, its president
said.
    Thomas E. Mulligan, president of the board of directors,
said 87 pct of the 61 members voting favored dissolution.
    The directors recommended the move, citing falling volume
and higher costs, when it called a special shareholders meeting
last month.
    Mulligan said the cooperative would continue operating
until April 24, when the member cooperatives will have to begin
clearing their futures trades through other companies.
    Mulligan said one of the members, Farmers Commodities of
Des Moines, Iowa, was attempting to organize a new cooperative
to replace Illinois Coop as a clearing company.
    Sources close to Farmers Commodities confirmed its plans,
but Hal Richards, president, could not be reached immediately
for comment, and it was unknown how many cooperatives might be
willing to band together.
    Industry sources said Farmers Commodities would face a
difficult task in setting up a new clearing organization by
April 24, the day Illinois Cooperative will be dissolved.
    They would have to obtain commitments from a sufficient
number of cooperatives to meet minimum capital requirements,
obtain trading memberships, and set up the office mechanisms to
handle futures trading.
    In the meantime, commercial clearing firms have been
courting the individual coops, trying to obtain their business
with low trading rates.
    If Farmers Commodities is unable to set up a clearing
organization by April 24, individual members will find other
homes, and they're unlikely to change clearing firms a second
time, one industry source said.
    The demise of Illinois Coop was set in motion by the
withdrawl of Growmark, Inc., the largest member with more than
70 pct of the capital stock, according to sources within the
cooperative.
    Mulligan acknowledged prior to the vote that Growmark had
no need to belong to the cooperative since it became affiliated
last year with Archer Daniels Midland.
    But he said Illinois Cooperative would still have been able
to meet minimum capital requirements without Growmark.
    The vote to dissolve the organization was met with "a
certain amount of pang," he said. "But in the final analysis,
the decision has to be economic, not emotional."
 Reuter
