Reuters — Loss-making U.S. grain handler Andersons Inc. said Sunday it plans to exit the retail business, affecting over 1,000 employees, at a time when the U.S. farm sector is facing a downturn due to a sharp decline in grain prices.
The company, which buys grain, produces ethanol and leases rail cars, said it will shut its four retail stores in the second quarter of 2017, affecting 650 employees in the Toledo area and 400 in Columbus.
“Choosing to cease a business that has spanned 65 years and employs about 1,050 people is tremendously difficult,” CEO Pat Bowe said in a statement.
The closure will have no impact on the company’s grain, ethanol, plant nutrient and rail operations and the full financial impact has not been determined, Andersons said.
However, the company said it expects to record a pre-tax charge in the range of US$9-$14 million in the first half of 2017.
There has been a sharp downturn in the U.S. farm sector with farmers finding it tough to make money due to weak prices for conventional grains because of a global supply glut.
“Net farm income is down 46 per cent from just three years ago, constituting the largest three-year drop since the start of the Great Depression,” agricultural trade groups said on Tuesday in a letter to U.S. President-elect Donald Trump.
In June last year, the Ohio-based company rejected a US$1 billion takeover offer from HC2 Holdings Inc., calling the bid an attempt to capitalize on a sharp downturn in the agricultural economy.
— Reporting for Reuters by Vishal Sridhar in Bangalore.