A proposed cooperative combination could bring Minnesota farmers better market access as global competition puts pressure on producers.

West Central Ag Services, based in Ulen, Minn., has agreed to join forces with Inver Grove Heights-based CHS, the nation's largest agricultural cooperative.

The deal with West Central follows scrapped merger discussions between CHS and Illinois-based Growmark.

"Our two cooperatives are aligned in our vision to advance the cooperative system and best serve our owners by connecting our producers to the global marketplace," Duane Brendemuhl, West Central Ag Services Board president and chair, said in a statement.

Financial terms were not disclosed. It could take several months to finalize the deal, which so far consists of a non-binding letter of intent.

West Central Ag Services, which markets grain and sells crop inputs through nine locations largely in the Red River Valley, reported $713 million in sales in 2022 and an $18 million profit.

The cooperative was founded in 2000. In 2009, West Central formed a joined venture with CHS, which is called Central Plains Ag Services, to serve North Dakota farmers.

CHS expects a combination with West Central to mean "enhanced market access," a key benefit for farmers facing global competition from rising agricultural exporters like Brazil.

"Better connecting the global agriculture supply chain and investing in the speed and space of our assets provides better market access and creates more value for farmer owners," said Rick Dusek, executive vice president of ag retail, distribution and transportation at CHS.