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

Thursday
Apr032014

From the Manager - April 2014

It has been a long, cold winter and I for one have had enough. These sunshiny, warm days we have just experienced have served only to stimulate our appetite for more. But, nice weather is just around the corner and before we know it we will be in the field and will have long forgotten the below zero days, the whiteouts and the icy roads and highways. Thank God for the changing of the seasons!

We recently finished up our six month audit and the results were pretty much what we expected. We are right on track with our budget and so far the year looks very similar to last year. That being said, we still have six months of business before we close our books for the fiscal year. Right now we are hoping for a good spring and productive summer. Several things to note about our first six months was that even though we took in the same amount of fall corn as we did in 2012, we marketed a lot less, due to the fact that the farmers retained ownership of the corn through the end of the year and the beginning of the new year. We have seen a pickup in corn sales recently with the spike in the price and I am hopeful that we will be able to move a lot of this corn out before harvest, thus making more room. Soybeans, on the other hand, have been moving at a steady pace, and at the end of our six month audit our sales were within a few thousand bushels of a year ago. Fall fertilizer tonnage was down a little from a year ago, based on the fact that producers are looking at spreading out their nitrogen applications over several different times during the season hoping to get the most bang for their 'nitrogen buck.' Keep in mind that Brooks and the guys can play an important part in your nitrogen side dressing program with the new Miller Tool Bar for putting down 28%. Contact Brooks and get your spot on the fast growing side dressing list.

GRAIN:  The grain world is currently caught up with the happenings in the Ukraine with Russia, the “Planting Intentions Report” due out on March 31 and the same as every other year, “Weather.” All unknowns at this time, but important to setting the tone of the market. Although no one knows exactly what will happen, there are things to keep in mind. 1) Rest assured if Russia wants Ukraine there is not much the rest of the world is going to do to stop them. Europe is not going to be able to do much as they depend on Russia for natural gas and they also want their grain. So, in effect, the grain will keep flowing through, thus not creating the marketing flow interruption that many were thinking was going to happen. Thus, I doubt there will be a long lasting effect on grain prices (mostly wheat and corn). 2) “Planting Intentions Report,” which will be out on March 31, will probably not tell us anything we do not already know. So long term this would probably not help support prices, but more likely contribute to putting downward pressure on prices. And 3) Weather, on the other hand, will be the wild card with commodity pricing as we go forward. Delayed planting, lack of rain, lack of sunshine and warm weather, too much rain, early frost or anything else you can think of will be what shapes markets from here on out for the 2014. At this point no one really knows what the weather will be, but it will be important to keep abreast of the markets and watch what is going on around you and maybe consider marketing a portion of your crops on rallies, if it will produce some kind of a profit. Keep an open mind and think about marketing as a year-round function. 

FERTILIZER:  The price of all the fertilizers has moved up since last fall. Not only has the industry been able to get prices turned around, but logistics is also going to run prices up and make product hard to get a hold of in the spring. With the problems the railroads are having coupled with late thaws on our major waterways, we could see transportation as one of the biggest challenges in the business. EET should be in pretty good shape. The only product we will need in season is urea. As of now, we have things scheduled in a timely manner. Hopefully it stays that way, but the truth is we can still be subject to transportation problems.

During March, April and May we have numerous holidays such as St. Patrick’s, Start of Spring, Administrative Professionals Day, May Day, and Memorial Day. But, none is more important than Easter and Mothers Day. Easter celebrates the forgiveness of our sins and our assurance of eternal life. Mother’s Day celebrates the most important person God has put in our life. A mother is indeed a 'special person.' My Mother is indeed a 'special Person.' My mother is currently 85 years old and has Alzheimer’s. When I visit her, she seldom recognizes me. But, those are not the things that make her special. Mom is special because she has been a good wife, partner and friend for my Dad. Mom has been a good Mother, giving birth to five children, and willing to 'mother' many more other kids. Mom has been a terrific grandmother to ten of her own grandchildren, as well as many more looking for a grandmother (including the different foster children my wife and I brought home over the years, treating them all as if they were her very own). Mom has been a loving great grandmother to currently seventeen great grandchildren and still counting. My mother is indeed a 'special person!' I recently found a poem my mom had taped on the refrigerator at the farm. It sums up my her spirit, as well as many of your own mother’s spirits...

Grandmother’s Day

Grandma, on a winter’s day, slopped the hogs, saddled the mule:

Got the children off to school:

Did a washing, mopped the floors:

Washed some windows and did some chores.

 

Cooked a dish of home-dried fruit:

Pressed her husband’s Sunday suit:

Swept the parlor, made the bed

Baked a dozen loaves of bread:

Split some wood, lugged it in:

Enough to fill the kitchen bin.

 

Cleaned the lamps and put in oil:

Stewed some apples she thought would spoil:

Churned some butter and baked a cake;

Then exclaimed “For mercy sake!”

The calves have gotten out of the pen:

Went out and put them in again.

 

She opened the organ and began to play:

“When you come to the end of a perfect day.”

 

Anon.

 

Mother’s Day, Sunday, May 11 - Honor your Mother, Grandmother and Great Grandmother
Truly God’s 'Special Person'!

 

Rod Winter, General Manager
“Together We Can Be Successful’

Friday
Dec202013

From the Manager - December 2013

From everyone at Equity Elevator, we are wishing you a BLESSED CHRISTMAS AND A HAPPY NEW YEAR. This is the time of year to stop, reflect and give thanks for all that we have been blessed with. The biggest blessing of all was the Birth of Jesus Christ.  Born in a lowly stable to a common man and a peasant girl, not what you would think of as the entrance of God’s only Begotten Son, sent to save the world. This humble beginning serves to remind us of our humility and reflect on why we should truly be thankful during this joyous season.

It seems like a long time since our last newsletter, we’ve completed harvest and applied a lot of dry fertilizer and NH3, while the Feed business continues to be steady every day. This fall we took in a few more bushels of corn than we did a year ago. Some people are surprised at this because we did not completely fill the north bunker, but our storage up town was all but empty, when harvest started. Soybeans on the other hand, we took in about 90% of what we did last year. Overall, it was a good fall for Equity, the crop is put away and no one was injured in the process. Hopefully your harvest at home went the same way.

As we start a new year, and continue to look for new ways that we can add value to your operation, I would invite each of you to come in, sit down and share your input on what we can do to further improve Equity Elevator. As the Board of Directors look at the long term survivability, sorting through issues that will improve what you the member want and need, while balancing that against what our balance sheet will support, is real challenge. Nonetheless, it is what we have to do to move forward.

An example of thinking ahead and offering the members services that will add value to their operations, is the purchase of a new Miller Sprayer that will offer pre/post spraying, drop spraying and 28% Nitrogen application. Side dressing nitrogen will allow you to get the biggest bang for your nitrogen buck, as well as help in preserving our ground water. Although you are already very environmentally conscious, the rules will keep pushing for more precision in formulation and application of plant nutrients. To find out how you can take advantage of these new services, contact Brooks and the guys in the Agronomy department for more details.

On the grain front, the $64,000,000 question is where are these markets going to take us? At this point it is anybody’s guess. What we do know is that the government is telling us we have very burdensome corn inventories, but with lower grain prices bring more worldwide demand and stimulates the livestock industry. Soybeans on the other hand show a lot tighter inventory numbers, but what will the South American crop be? More unknowns than known, but that makes it more important than ever to pay attention to the markets and have a plan in place that will allow you to stay in the business. Keep in touch with Travis and stay abreast of current grain markets and news. Being well informed is the first step in your marketing plan.

Your livestock operations will have opportunities this coming year to use feed ingredients that will help keep your cost of production down. Questions you need to be asking are: Will DDG’s be a good buy now with the lower price of corn? Is Soybean Meal the best protein source available for the value? Where is my breakeven? And, what combinations of feedstuffs will give me the best cost of gain? Tom is the man that can help you answer these questions, by determining what will work best for your operation. The economists claim that the livestock markets, including milk, should be favorable this coming year, make sure the markets work for you.

I will close by wishing all of you a BLESSED CHRISTMAS AND A PROSPEROUS NEW YEAR!!!

“TOGETHER WE CAN BE SUCCESSFUL”

Rod Winter
General Manager

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