Post by Todd B on Apr 4, 2008 23:31:30 GMT -5
Ida Co-op issues refunds, laments high input costs
by Dean Cousino , last modified April 04. 2008 11:18AM
www.monroenews.com/apps/pbcs.dll/article?AID=/20080404/NEWS01/13780454
IDA - The Ida Farmers Cooperative had another profitable year in 2007, but grower concerns about soaring fuel and fertilizer costs and volatile grain markets put a damper on any celebrations.
The co-op reported earnings for the fiscal year ending Dec. 31 amounted to $620,605, a jump of $224,710 from fiscal 2006. That's also $376,769 more than the $243,836 earned in 2005 and $450,244 higher than the 2004 profit of $170,361.
And while the bottom line sounded good on the surface, it doesn't tell the real story of what farmers are facing these days in a hotly competitive global market.
"This was a great year," auditor Hal March told an estimated 200 people at the co-op's 86th annual dinner meeting Thursday night at Ida High School. "But with your inputs going up the way they are and the instability in grain prices, it's going to be very difficult to manage your business."
For the first time in history, the elevator is no longer posting grain prices on an hourly basis, Manager Mike thingy announced.
"It's so erratic. Corn can go up 20 cents one hour and go down 20 cents within 20 minutes," Mr. thingy said. "I've been here since 1971, and I've never seen some like this. We just can't guarantee prices for an hour any longer."
Complicating matters are fertilizer prices that have doubled since last spring. Causing the climb is a worldwide demand for fertilizer from countries such as China and India that want to become more self-sufficient. The demand is creating a severe shortage of fertilizer for growers in the United States, Mr. thingy said.
With the price of 28 percent nitrogen approaching $400 a ton and potash costing more than $560 a ton, growers can see their profits being whittled away by higher expenses. Mr. thingy advised them to investigate their costs and talk with a lender before deciding what to plant next year. They may want to forgo planting corn, which requires more fertilizer than soybeans or wheat.
"There are some real challenges ahead," the manager said. "We have to hope the grain prices stay high to offset it."
The good news was that nearly $212,000 in patronage dividends from 2007 would be mailed later this spring plus $215,700 in dividends from a 1993 reserve allocation for those who were members then. That compared to $133,726 in patronage refunds made last year and $86,387 in 2006.
Dividends are paid partly in cash and the rest in allocated stock that is retained by the co-op for operational expenses. The co-op enjoyed about $21.6 million in patronage business in 2007, up sharply from the $16.1 million in 2006.
Refunds are based on how much business farmers make at the elevator. The more business, the higher the refund. There are about 1,300 common stockholders in the co-op.
John Stefko of Monroe, a co-op member for 59 years, said he keeps coming back because of the stock he has invested.
Mr. March said the profit was not the largest for the co-op. He said back about 25 years ago, the co-op had earnings of about $900,000 when soybeans sold for $12 a bushel and there were more patrons doing business.
The elevator sold $4.5 million in fertilizer last year, about $1.6 million more than in 2006. Employees spread fertilizers on a record 36,000 acres, about 5,700 acres more than the previous year. Custom spraying was done on 30,360 acres, an increase of 9,700 acres.
Other highlights:
More than 2 million bushels of grain were delivered to the elevator in 2007, an increase of 318,000 bushels from the year before. A total of $15.3 million in grain was sold, a jump of $4.45 million from 2006. Total sales of both grain and supplies amounted to $21.8 million, an increase of $6.5 million over the previous year.
A total of $289,320 was spent on capital improvements, including $83,600 for purchase of the VanDaele property next to the former road commission building the co-op bought in 2007. Another $34,000 was spent on surveying and an environmental review of the property.
Among the capital purchases were leasing a 2007 Dodge one-ton pickup for $36,900, a new 28 percent nitrogen applicator and supply tanks for $25,840 and three fertilizer carts for $33,235.
The co-op will offer variable rates on high-tech dry spreading to assist growers in not overfertilizing or underfertilizing their crops.
by Dean Cousino , last modified April 04. 2008 11:18AM
www.monroenews.com/apps/pbcs.dll/article?AID=/20080404/NEWS01/13780454
IDA - The Ida Farmers Cooperative had another profitable year in 2007, but grower concerns about soaring fuel and fertilizer costs and volatile grain markets put a damper on any celebrations.
The co-op reported earnings for the fiscal year ending Dec. 31 amounted to $620,605, a jump of $224,710 from fiscal 2006. That's also $376,769 more than the $243,836 earned in 2005 and $450,244 higher than the 2004 profit of $170,361.
And while the bottom line sounded good on the surface, it doesn't tell the real story of what farmers are facing these days in a hotly competitive global market.
"This was a great year," auditor Hal March told an estimated 200 people at the co-op's 86th annual dinner meeting Thursday night at Ida High School. "But with your inputs going up the way they are and the instability in grain prices, it's going to be very difficult to manage your business."
For the first time in history, the elevator is no longer posting grain prices on an hourly basis, Manager Mike thingy announced.
"It's so erratic. Corn can go up 20 cents one hour and go down 20 cents within 20 minutes," Mr. thingy said. "I've been here since 1971, and I've never seen some like this. We just can't guarantee prices for an hour any longer."
Complicating matters are fertilizer prices that have doubled since last spring. Causing the climb is a worldwide demand for fertilizer from countries such as China and India that want to become more self-sufficient. The demand is creating a severe shortage of fertilizer for growers in the United States, Mr. thingy said.
With the price of 28 percent nitrogen approaching $400 a ton and potash costing more than $560 a ton, growers can see their profits being whittled away by higher expenses. Mr. thingy advised them to investigate their costs and talk with a lender before deciding what to plant next year. They may want to forgo planting corn, which requires more fertilizer than soybeans or wheat.
"There are some real challenges ahead," the manager said. "We have to hope the grain prices stay high to offset it."
The good news was that nearly $212,000 in patronage dividends from 2007 would be mailed later this spring plus $215,700 in dividends from a 1993 reserve allocation for those who were members then. That compared to $133,726 in patronage refunds made last year and $86,387 in 2006.
Dividends are paid partly in cash and the rest in allocated stock that is retained by the co-op for operational expenses. The co-op enjoyed about $21.6 million in patronage business in 2007, up sharply from the $16.1 million in 2006.
Refunds are based on how much business farmers make at the elevator. The more business, the higher the refund. There are about 1,300 common stockholders in the co-op.
John Stefko of Monroe, a co-op member for 59 years, said he keeps coming back because of the stock he has invested.
Mr. March said the profit was not the largest for the co-op. He said back about 25 years ago, the co-op had earnings of about $900,000 when soybeans sold for $12 a bushel and there were more patrons doing business.
The elevator sold $4.5 million in fertilizer last year, about $1.6 million more than in 2006. Employees spread fertilizers on a record 36,000 acres, about 5,700 acres more than the previous year. Custom spraying was done on 30,360 acres, an increase of 9,700 acres.
Other highlights:
More than 2 million bushels of grain were delivered to the elevator in 2007, an increase of 318,000 bushels from the year before. A total of $15.3 million in grain was sold, a jump of $4.45 million from 2006. Total sales of both grain and supplies amounted to $21.8 million, an increase of $6.5 million over the previous year.
A total of $289,320 was spent on capital improvements, including $83,600 for purchase of the VanDaele property next to the former road commission building the co-op bought in 2007. Another $34,000 was spent on surveying and an environmental review of the property.
Among the capital purchases were leasing a 2007 Dodge one-ton pickup for $36,900, a new 28 percent nitrogen applicator and supply tanks for $25,840 and three fertilizer carts for $33,235.
The co-op will offer variable rates on high-tech dry spreading to assist growers in not overfertilizing or underfertilizing their crops.