United Cooperative Returns $23.2 Million in Patronage
As you know, the purpose of a cooperative is to work together for the benefit of all the members: creating more buying power and, in turn, offering products and services to you at competitive prices and helping you to be more financially successful. Despite a challenging year at the farm-gate, your cooperative continues to be well-positioned financially into 2020.
Returning Value to Members
Revenues for 2019 were $767.6 million. United Cooperative’s core businesses of agronomy, grain, feed and energy generated $26 million in profits. The investment United Cooperative made in ethanol contributed $5 million to our net income in 2019. Patronage from regional cooperatives was $5.1 million dollars. All combined, United Cooperative had a total net margin before income taxes in 2019 of $31.3 million dollars.
With those numbers, United Cooperative has returned $23.2 million in total patronage to members. Forty percent of this patronage, or $9.3 million, was distributed in cash to our patron member-owners in May, while 60 percent, or $13.9 million will be retained in equity credits. In addition, we plan to revolve stock in October, retire stock at age 77 and pay all estates as requested.
Advancing the Cooperative
Your cooperative is advancing with several construction projects during the year that will add value in our agronomy, grain, feed and energy divisions. These upgrades were only made possible in your communities by your support and the cooperative being committed to your success as producers.
These building projects not only provided jobs during construction, but also keep jobs in the area long after the project is completed. In agronomy, a new 5,500-ton dry fertilizer plant and a 150-ton blending tower is being built at Darlington. A 12,000 sq. ft. warehouse was built at the Pickett location. In addition, your cooperative made upgrades to the Westfield location. Several enhancements were made to the cooperative’s grain facilities to improve market access include the expansion of the Belmont location with the addition of a 1.2-million-bushel grain storage bin and receiving pit. Your cooperative made additional upgrades to the grain handling capabilities at the Westfield and Boscobel locations. In our energy division, we added a convenience store at the Greenville location, with an ACE Hardware store opening at the location as well.
Advancing Communities & People
United Cooperative recognizes the importance of giving back and helps advance many non-profit organization’s initiatives throughout the year. The cooperative’s approach is to target community giving to three areas that support members the most: rural health and safety; youth education; and food pantries. Total giving to initiatives in these three areas reached $205,713.56. In 2019, 50 high school and college students were awarded a $1,000 United Cooperative scholarship, bringing the total number of students supported through this program to 368 over the last eleven years since the program’s inception.
With hand sanitizer being almost impossible to find during the Coronavirus pandemic, United Cooperative and United Ethanol are stepping up to help fill the shortage. In a small way, United Ethanol can provide much needed alcohol for the production of hand sanitizer to do our part. They are currently producing about 100,000 gallons of alcohol a day.
Board members re-elected to posts
This year, United Cooperative had three incumbent directors seeking re-election from each of the three district areas (northern, central and southern). Rodney Leiterman, Denmark, Northern District; Peter Mlsna, Hillsboro, Central District; and Gary Nolden, Prairie du Sac, Southern District, were re-elected to three-year terms.
We strive to uphold United Cooperative’s promise to build on all available resources to create positive customer experiences while growing profits for members and the cooperative. We want members to “Rely on Us” for high quality, reliable products and exceptional service, all backed by up-to-date, efficient equipment and facilities.
Thank you for your support of the cooperative this past year and may you have a safe and productive 2020.
President and Chief Executive Officer