PGG to sell retail locations

<p class="p1">Pendleton Grain Growers Inc. plans to sell its six retail stores, including the one in Pendleton.</p>

Pendleton Grain Growers Inc. announced Friday it will no longer operate its retail stores across Eastern Oregon, as the local farmers’ co-op looks to cut costs and restructure business.

The move comes at a time when PGG is also seeking to negotiate a possible alliance with CHS Inc., of St. Paul, Minn., for much-needed capital to help members keep up with changes in agriculture.

Spokeswoman Maddee Moore said PGG plans to sell its retail division of AG Supply stories within 4-6 months. During that time, none of the stores will close and no employees will be laid off.

“All business will continue to operate as normal,” Moore said. “Nothing will be changing, in the short-term. We will be here to conduct business as we’ve always done.”

PGG has six stores, located in Pendleton, Hermiston, Athena, Milton-Freewater, Island City and Joseph. They carry products ranging from pet and livestock supplies to hardware, automotive and garden equipment.

In addition, the Pendleton store has an automotive service center that will also be sold. The goal, Moore said, is to find a buyer that will keep those businesses going in the communities.

“We always knew we would have to make some changes,” she said. “Our number one focus is making sure our members are taken care of and providing the services they need.”

By dropping retail from the fold, Moore said the co-op can focus more on what they consider to be their core areas of business: the grain, seed, energy, agronomy and fleet divisions.

The PGG Board of Directors began looking through its business model several months ago to find which services were most important to members, and how they could be restructured for maximum efficiency. The decision came last week to drop the retail business in order to make other services such as grain marketing, fuel and agronomy more useful and profitable.

“We have struggled the past few years to pay patronage,” Moore said. “It’s about ensuring our network of services do meet modern agriculture standards ... It’s continuing what we do have and doing it better.”

In an announcement, PGG Board President Tim Hawkins said the decision was not an easy one to make and the board recognizes the impact that selling the stores could have in the community.

“As we work through these changes, we are dedicated to providing support to those affected while still being focused on delivering value to the membership today and into the future,” Hawkins said.

General Manager Rick Jacobson was not available Friday to discuss the announcement. In a previous interview with the East Oregonian editorial board, he said profit returns to the co-op have been marginal for decades.

PGG will hold its annual meeting Tuesday, June 24 at the Pendleton Convention Center, where Moore said the board should have more information about the sale and potential talks with CHS. Any formal partnership would have to be approved by a vote of the membership, she said.

Established in 1930, the co-op currently has 1,850 members and 229 employees.

“It’s going to take a lot to make these changes, but change is inevitable in any business,” Moore said. “We are focused on what needs to be done.”

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Contact George Plaven at gplaven@eastoregonian.com or 541-564-4547.

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