Paul Katovich – HighLine Grain Growers Inc.
It’s easy to envision the state of Washington state as an unending forest of towering fir, spruce and hemlock trees forever moistened by storm systems riding in from the Pacific Ocean.
But the HighLine Grain Growers Inc. website shows aerial views of grain silos and railroad cars lined up in a landscape that belies this vision—it’s as treeless and fertile as any Midwest Grain Belt state.
Led by CEO Paul Katovich, HLGG supports farmers from seeding their crops to shipping their harvest from storage facilities using major railroad and barge transportation options.
The co-op also provides information and bulletins on market prices and bids, crop varieties and weather, and an online course on dealing with stress as farmers. All of it is available on an app, too.
“We exist to serve the multi-generational farm family,” Katovich says. “We recognize that we didn’t build the platform we’re responsible for today. It was passed down to us and we’re charged with being good stewards of it.”
On April 1, 2018, the Central Washington Grain Growers, Odessa Union Warehouse Co., Reardan Grain Growers, Davenport Union Warehouse Co. and Almira Farmers Warehouse Co. joined together as HLGG. Reardan Seed Co. was acquired six months later, and the co-op currently serves a 9,000-square-mile area of Eastern Washington.
Agricultural co-ops aren’t new—according to the University of Wisconsin at Madison, the first ones were formed around 1810 to market dairy products including cheese.
The companies that combined to create HLGG were each more than 100 years old, but Katovich says the support to merge was overwhelming. However, he adds success is measured in merging operating cultures, especially because statistics show 28 percent of employees leave a company after a merger, and 36 percent of the co-op employees were approaching age 65 and possible retirement.
To help retain employees, Katovich helped create strong 401(k) and performance bonus packages among other benefits such as extending health care insurance to employees’ families.
“We needed to make the merger successful for both the employees and our patron base,” he says.
Though there are 16 types of grains and legumes HLGG farmers cultivate, including barley, canola, peas and flax seed, more than 90 percent of what’s grown is soft white wheat. The wheat is used to make noodles and flatbreads and is especially popular in Asia, where it’s used in confectionary items such as Japanese wagashi.
Unlike many Midwestern co-ops, HLGG stores grains for its members in a network of 50 storage sites from the time it’s harvested instead of accepting crops only as they’re about to be shipped to market. The co-op’s storage and shipment facilities are served by the BNSF Railway as well as barges operating on the Snake and Columbia rivers.
“We absorb as much of the logistical battle as we can,” Katovich says. “We can ship in every mode and can deliver any quality our customers require.”
Of rails and rivers
Managing the logistics for co-op members is a significant benefit, but Katovich says he also works to balance the competitive tensions between rail and barge carriers while lobbying federal, state and local governments to keep the transportation platform competitive. He’s also part of efforts to prevent removing four dams on the Snake River.
Katovich also advocates for rehabilitating Washington’s state-owned short-line railroad system because it’s crucial to competitive shipping in the Pacific Northwest and beyond. There’s funding to be had, too, because of the federal Infrastructure Investment and Jobs Act passed in 2021. As Katovich chatted with Terra Firma, he was also preparing to lead three tours of short-line rail operations with state legislators.
“Our individual patron lacks the political leverage to move the needle on any of that,” Katovich says. “So, we engage decision makers to educate them on the consequences of their actions.”
While protecting the strength and viability of the transportation networks that get grains to market, Katovich, Chief Financial Officer Beau Duff and Merchandising Manager Ty Jessup are working on HLGG’s internal structure to ensure it meets members’ needs.
For instance, Katovich says the co-op has built its own millwright team to maintain the grain storage and elevator facilities. Two years ago, HLGG completed a digital conversion that included adding Wi-Fi infrastructure on top of grain silos as well as upgrading scales, loading and unloading equipment.
Though Katovich has been instrumental in developing HLGG and assisting its members with their operations, he’s not from a farming background. Originally from Colorado, he grew up in Saint Maries, Idaho, he didn’t take any agriculture courses as he earned his bachelor’s degree in economics from the University of Idaho.
However, Katovich did have friends from farming families, which he says inspired him to start his career in the grain business with Columbia Grain in Lewiston, Idaho. He envisioned using his economics degree to help those families with trading and logistics. It was a great place to start—giving him the opportunity to learn about grain trading and handling in the diverse cropping systems of the Palouse, a region adjacent to HLGG’s footprint.
Katovich eventually transferred to Columbia Grain’s Portland, Oregon, headquarters and spent several years participating in the export trade. He says the experience was an education in cultures and relationships that taught him, above all else, business is about personal relationships.
“Integrity is your currency in the close-knit grain industry of the Pacific Northwest,” Katovich says. “A Ph.D. in the grain business is earned only by working in the real world. No school can teach that in the Pacific Northwest—or anywhere else for that matter.”
View this feature in the Terra Firma Vol. III 2023 Edition here.
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