Miller Magazine Issue: 117 September 2019

44 NEWS MILLER / SEPTEMBER 2019 Skyland Grain and United Prairie join forces Kraft, Mondelez to pay $16 million in wheat price manipulation case Kansas beased Skyland Grain, LLC and United Prairie AG, LLC (UPA) announced that the two companies will merge on September, 1st, 2019, and operate Skyland Grain, LLC. This Pro-active unification of two successful, financially strong, producer focused companies will allow for better opportunities to better serve producers in the fu- ture. David Cron, current CEO of Skyland Grain will be the CEO of the combined company. Sky- land will have their Corporate Office in Ulysses with Regional Administrative Offices in Johnson and Cunningham. The new Skyland Grain, LLC will have 87+ million bushels of storage capacity in 36 locations. Sales for the combined compa- ny will be in access of $400 million. Skyland will employ 250 employees with the addition of UPA. United Prairie Ag was formed in January 2006 as a joint venture between Cropland Co-op Inc. and ADM Grain Division. UPA is a full-service agriculture partner, offering grain operations, agronomy products and services, refined fuels and marketing expertise. UPA op- erates elevator facilities in nine communities, with a total of 30 million bushels of well-main- tained storage capacity. Skyland Grain with cooperative roots from 1915, is headquartered in Johnson, KS, and began operation August 1, 2004, with Johnson Coop- erative Grain Co. and ADM Grain Company as the founding parent companies. Today, Skyland Grain operates grain receiving facilities at 27 lo- cations across Kansas, Oklahoma, and Colorado. They have a total licensed grain storage capacity of over 56 plus million bushels. The U.S. Commodity Futures Trading Commis- sion (CFTC) said Kraft Heinz Co and Mondelez International Inc will have to pay $16 million in penalty regarding a wheat manipu- lation case that dates back to 2015. Kraft Heinz, which was Kraft Foods until 2015, and Mondelez bought $90 million of December 2011 wheat futures, which gave the companies a dominant position in the market, even though they never intend- ed to take possession of the grain, the CFTC said. The move sent a false signal that the companies had demand for wheat and caused an artificial price fluctuation that earned them more than $5 million in profits, the CFTC said. Both companies said they strongly disa- gree with CFTC’s statement, which “blatantly violate and misrepresent the terms and spirit of the consent order”, and will be seeking immediate relief from the court. The commission said the companies’ goal was to narrow the price spread be- tween the December 2011 and deferred-month wheat futures contracts, causing the market to sell cash wheat to the companies at lower prices, while earning them a profit on their speculative futures positions. Wheat futures and options traders had also accused the companies of illegally ma- nipulating the grain’s price at their expense. The penalty is about three times the companies’ al- leged gain, the CFTC said in a statement.