Friday
Apr032015

From the Manager - April 2015

Spring is surely coming upon us in a hurry, but can’t come too soon to suit me. It won’t be long before we are in the fields planting, mowing the grass and hay, or just enjoying some nice weather outdoors with our friends and families. 

Along with spring comes new starts, and here at Equity Elevator we are going to experience a huge new start. The Board of Directors has authorized the remodeling of the South Elevator to speed up our ability to weigh and dump grain. This extensive remodeling project will include: two 20,000 bu./hr grain legs, new conveyors on top of the South Concrete to handle dumping 20,000 bu./hr, new 20,000 bu./hr double swing set distributor, new grain cleaner, a new pit that will allow us to dump semi trailers without moving, as well as a new electronic scale. This project will start shortly after the first of May and will be finished before soybean harvest in the fall.

This seems like a major undertaking, and it is.  During this project, WE WILL NOT BE ABLE TO DUMP GRAIN IN THE SOUTH ALLEY. We will be limited to dumping in the North Alley where we currently unload feed ingredients and load finished feed out in our bulk trucks. As you can see this will require a lot of coordination and severely limit the amount of grain we will be able to handle during the construction period this summer. This is also the reason we are not able to open up for 'Free Price Later' for corn. We simply will not be able to use the steel bin or cement silos on the south side during the construction period. We ask for your patience and cooperation to work through and complete this extensive remodel and update.

During this period, contact Travis and he will be able to help you with marketing, including direct ship. He will have trucks available to move your grain. Call him and let him help you develop a marketing plan for moving your grain.

I realize this is going to be a giant inconvenience this summer, but by harvest it will pay big dividends by allowing us to dump your grain faster and get you back to the combine in timely manner. The Board of Directors realizes that for Equity Elevator to continue being successful it is vital to invest money in the assets that will have a good return as well as better serve the member-owners. Hopefully, as we move forward, this will be only the beginning of improving and expanding Equity’s facilities and services to provide you, the members, with the tools necessary for your success. 

If you have any questions, please contact me and I would be more than happy to discuss this project or any other items you would like to visit about.

Now is the time to set up your fertilizer and chemical application programs with Brooks. With spring looking like it may be on time this year and we want to make sure we take care of your needs on a timely basis. Planning now can save valuable time when we get in the heat of the season.

“TOGETHER WE CAN BE SUCESSFUL”

Rod Winter
General Manager

Monday
Nov172014

From the Manager - November 2014

The '2014 Grain Harvest' is behind us and now it is time to focus on marketing. Many grain analysts have been totally surprised at the October rally and find it difficult to explain. With the USDA’s projected 'record' production numbers in both corn and soybeans, this market doesn’t fit our idea of the way things are supposed to work. 

Looking at corn:  On the surface a carryout number like 2 billion bushels would seem very 'bearish'. But, looking at the big picture it is conceivable that it may not burden the market as much as you might think. It has not been too many years ago that a 10 billion bushel corn would pretty well choke us. That was before ethanol production came on the scene along with a bigger global appetite. Today we will use 5-6 billon bushels for ethanol production and another 5 billion for feed production, let alone export demands. Today there is record global demand, due in large part to the price decrease over the last several years. I think you could see the current prices level off through the winter into the spring. I also think the key to making or breaking this year’s corn market is 2015 weather, which will affect us in the spring and summer markets of 2015. If the US or China encounter any kind of weather to adversely affect our corn harvest a year from now, it will drive our summer prices up. Conversely if the US or China experience weather that gives us a trend line or above fall yields, we could see prices soften up next summer. As you formulate your marketing plan you need to pay attention to all these factors. One comment I would make is that in the Wood Lake area we did not have a record crop in any way, shape or form. At the same time as I visit with other managers in the western corn belt, nobody is bragging about yields or how big their ground piles are. Apparently the bumper crop is confined to the eastern corn belt. 

Looking at soybeans:  Soybeans are an even more interesting dynamic. According to USDA, we just experienced a record yield in the US, yet processors are having trouble buying enough soybeans to crush to meet the demand for soybean meal. Be careful, we could easily catch up to demand and this strong soybean market could fall like a house of cards. Export demand and domestic demand are fueling the market right now. Much like corn, soybean usage is better than in years past, which means we can utilize more bushels than we used to, and it is a good thing. We had record soybean yields this year and harvested a 4 billion bushels soybean crop. On the surface, this would also appear 'bearish', but do not underestimate demand. One interesting thing I recently saw was how one commodity's guess is already pegging soybean acres equal to corn acres next year. It will be interesting over the winter to see how prices try to buy acres for 2015 production.  

Fertilizer Comments:  I have heard some talk about cutting fertilizer rates, waiting until next spring to have the option to change planting intentions or simply waiting for the fertilizer prices to come down. A few things to keep in mind... 1) Keep your 'bases loaded'. Make sure you have adequate nutrients available in case we do have that record year. Make sure you know where your soil levels are at and adjust your fertilizer accordingly. Wise use of fertilizer is part of a good crop production plan. 2) Waiting until spring may make good sense, if you can change up your rotation without hurting yourself in the future. 3) Prices could get cheaper; I don’t know. But a couple things that could temper that are transportation and manufacturing.  At this point in time it doesn’t look like the railroad will necessarily be our friend when the crunch is on. It looks like we will have to depend on the river and trucks to keep things working. Manufacturing is an interesting thing to take a look at. Over the years we have put a lot of the manufacturers out of business with fertilizer cost wars, due to a flood of material on the market. Today we have fewer players in the phosphate and potash industries and I feel they will slow down production to match demand and maintain their profitability. These are just a few things to consider. Please feel free to stop in and visit with Brooks or myself at any time about your crop production plans.

Thanks all for checking in, and stay safe this winter season!

Rod Winter
General Manager

Wednesday
Oct152014

From the Manager - October 2014

“But by the Grace of God, Equity Elevator has been blessed with another good year!” 

We had challenges this past year, much like each of you has experienced, but together we are all weathering them. This past fiscal year, reported on at our 102nd Annual Meeting, showed that we made about the same amount of local savings as we did last year, plus showed some significant improvements to our Balance Sheet. We saw an improvement in our Working Capital, Percent of Local Ownership and other ratios that show that in the last two years we have been making some steady, but significant financial progress. If you were unable to attend the meeting, please stop at the office and pick up a copy of the financial report. And, as always, if you have any questions feel free to contact me. I always enjoy getting a chance to visit with you.

Last year at this time I used the example of the three-legged milking stool as the secret to EET’s success. That philosophy is still applicable. The first leg is you. You, the members, have made this success possible with your loyalty and patronage over this past year. For that I sincerely THANK YOU, THE MEMBERS. You are the reason we are here and everyone here looks forward to working with you this upcoming year. The second leg is your Board of Directors; they are responsible for protecting EET’s Balance Sheet and planning for the continued success of EET. This is a responsibility they take very seriously and for that I want to SINCERELY THANK THE DIRECTORS for their contributions. And finally I want to THANK ALL THE EMPLOYEES for their hard work and dedication. The employees are definitely the third leg that adds stability and makes our success possible. 

SPECIAL RECOGNITION: At the meeting both Pam and Jeanne were recognized for twenty years of dedicated service to EET and the Members.  

Thank you Pam and Jeanne for your contributions over the past twenty years in making EET the company that it is today!  

On behalf of the Board of Directors, thank you to everyone that promptly returned their mail-in ballots on amending the Articles of Incorporation and Bylaws or voted at the Annual Meeting. The membership overwhelmingly  approved amending the Articles of Incorporation and Bylaws as presented.

One question that often gets asked is "What does EET do with the money when they show a profit?" The answer to this question is three-fold. We can use profits to buy and/or replace property, plant and equipment. We can use profits to improve the Balance Sheet. We can use profits to return money to the Members. We can use any one of these options, or a combination of the three. This past year the Board decided to use all three of these options.

Property, plant and equipment: EET purchased a new Miller Sprayer with Nitrogen Application Bar, updated Lonnie’s feed truck, upgraded legs and equipment in the mill and elevator and started several new projects that will be completed in this fiscal year. The projects include: new load out distributor at the mill, new chemical containment, load pad and chemical storage, roof over roller mill and upgrades to the roller mill system that will increase capacity and improve the quality and consistency of ground feed.  

Improve the Balance Sheet: As I stated earlier we were able to show progress by improving a lot of our operating ratios, which in turn adds to the stability of our Balance Sheet. 

Return money to the members: This past year, EET has returned more than $388,000 to the members in the form of cash dividends, estate retirements and age retirements.

(Please note on your patronage checks, the check stub is not your 1099. The reason for the change is that the Board of Directors has decided to pass through a DPAD tax deduction to every member that sold grain to EET this past year. DPAD (Domestic Production Activities Deduction) or Section 199 is a pass-through from EET to you. This deduction will be available for your 2014 individual tax use, and as such will be reported on your 2014 Form 1099-PATR. Please consult your tax advisor regarding this matter.)

NEW AND IMPROVED WEBSITE FOR EQUITY! As mentioned in our newsletter, in the last few months we have been working on improving the appearance and usability of our website. We have enlisted the help of Laura Horesji, and she has been busy getting it ready, and as you can see, it is now up and running! It is different from what our former website, but I think you will like some of the new features, such as the smart phone app that will allow you to view the website on your cell phone. I am excited about what Laura has done with the website and feel that it will allow us to communicate better with you the member.

At the Annual Meeting I mentioned the fact that we are in the process of instituting a new 'Customer Loyalty Program' for Agronomy/Grain customers. The basics are that if you purchase your agronomy needs from Brooks, you will be eligible for premiums on grain that you sell to Travis. Brooks and Travis will be around to visit with you on this program. Check it out and see if we can put more money in your pocket.

Every year offers new and unique challenges. Along with each challenge comes opportunities and I see a host of opportunities coming our way.

“TOGETHER WE CAN BE SUCCESSFUL”

Rod Winter
General Manager