History of Agway

Agway was created in 1964 from the merger of three regional cooperatives serving the northeastern United States. The oldest of the three, Eastern States Farmers Exchange, was founded in 1920 and headquartered in West Springfield, Massachusetts. The second, the Cooperative Grange League Federation Exchange (GLF), was founded in 1920 and headquartered in Ithaca, New York. The third, Pennsylvania Farm Bureau Cooperative Association (PFB), was founded in 1934 and headquartered in Harrisburg, Pennsylvania. Cumulative sales for the three totaled $375 million. The idea to merge first arose in January 1960 at the annual meeting of the National Council of Farmer Cooperatives in Atlanta. There the general manager of GLF, Edmund H. Fallon, invited the assistant general manager of Eastern States, William H. Prigmore, to his room for a private discussion on the future of agriculture, particularly as it affected cooperative activity in the Northeast. The men agreed that one large cooperative might better serve the area than the three already in place. In later informal meetings, at Fallon's request, PFB was included in the plans for consolidation. In June 1960 the presidents and the general managers of the three co-ops met at GLF headquarters and launched the "PEG" study (named after the initial letters of the three businesses).

The PEG study offered a cautious approach to merging. Its guiding principle was to discover whether profitability could be enhanced by joint operation of some or all of the facilities of the parent corporations. Another reason for proceeding cautiously was the difficulty of merging three different governing boards, with varying goals, into some new organizational system. However, within three years, an executive study committee had reported that the best and most workable solution was complete consolidation. GLF and Eastern were committed to proceed rapidly, but PFB had, during the interim, contracted with Cooperative Mills of Baltimore to run one of its mills. Furthermore, PFB's committee member, L. A. Thomas, Jr., had neglected to participate in feed deliberations, the primary focus of the PEG study.

Eastern States Merger

GLF and Eastern decided to hammer out an initial merger and then include PFB at a later date; a merger of all three at once, had it been possible at the time, would only have multiplied the many logistical problems that were due to arise. As explained in Nathaniel E. White's "The Birth of Agway," GLF and Eastern "were structured quite differently. GLF was a stock cooperative with the farmer's membership validated by the ownership of common stock. Eastern States was a membership cooperative with no securities outstanding--the farmer's membership was activated solely by patronage." Negotiators for the two co-ops proposed that the new requirements for membership be that a person not only farmed but held common stock in the company and was a user of the company's products and services. The board was to be large at first (27 members) and then reduced over time to the recommended number of 18. Following unanimous adoption of these and other settlements by the directors of both co-ops in November 1963, the first merger was incorporated in January 1964 under the temporary name of GLFEastern States Association. A month later Agway, Inc., was approved by the new board of directors as a concise name signifying the general enterprise while not indicating any geographical restriction. A final mandate for the merger was awarded in a landslide vote by members of the two co-ops. By July a makeshift headquarters had been established in Syracuse, and Fallon became Agway's first general manager.

Map of Eastern States (above) prior to Merger

Member Farm - Agway History

A Member Farm in 1964