GROWMARK Reports Estimated Year-End
Financial Results
CHICAGO
(August 24, 2007) — GROWMARK officials today reported
unaudited, estimated results for the fiscal year that will
end August 31, 2007. Vice President of Finance Jeff Solberg
announced sales of $4.2 billion for the 2006-07 fiscal year,
an all-time record. GROWMARK net income is estimated to be
$134 million, also an all-time record.
“Our wholesale businesses that
provide seed, plant food, crop protection products, grain
systems, and energy products and services, all produced
strong results,” Solberg said. “Additionally, GROWMARK
retail business units now comprise over $1 billion, or 25
percent, of sales.”
More than $92 million in
patronage refunds will be returned to GROWMARK member
cooperatives. “This is the first time in nearly three
decades that we have distributed patronage refunds from all
of our major product divisions. It will be the largest
amount of cash returned to members in the history of the
GROWMARK System, and is a tribute to the unity of the
System” Solberg said.
Energy Division
The Energy Division
posted its fourth consecutive record gross income, estimated
at $130 million, up $30 million over 2006.
Refined fuels volume was up,
driven by strong growth in sales, particularly from our
premium product, Dieselex gold. Propane recorded record
volume in 2007, as well.
GROWMARK sales of FS branded
lubricant products, as well as the United and Archer brands,
tripled over last year.
UPI Inc., the Ontario-based
energy company jointly owned by GROWMARK and Suncor Energy
Products Inc., continued to deliver excellent results as
approximately 100 million gallons of fuel were sold this
year, Solberg reported.
Agronomy/Seed Divisions
Plant food market conditions were friendlier compared to
2006, which will result in record Agronomy Division income
generated at the wholesale level, Solberg said. “Plant food
volumes moved at record tonnage levels due in part to
increased corn acres and higher market share,” he said.
The GROWMARK Seed Division had
an excellent year. Despite a 10 percent drop in soybean
sales, overall seed sales in 2007 were a record $160 million
— 25 percent higher than a year ago and triple the System
sales reported in 2000, Solberg said. Total seed corn sales
of 750,000 units were 50 percent higher due to an increase
in corn acres and expanded System market share.
“The need to become a seed
company was identified years ago as crop protection was
migrating from the sprayer to the seed bag,” Solberg said.
“Our seed business is growing rapidly as a result of our
commitment to planning and follow-through.”
Facility Planning and Supply
Division
The cooperative’s
Facility Planning and Supply Division also posted a record
year. “Strong demand for grain storage has tripled our grain
systems sales in just three years and the volume through the
GROWMARK Tank and Truck Center shows eight consecutive years
of sales growth,” Solberg said.
Grain Division
Total Grain Management
(TGM), a partnership between GROWMARK, Effingham-Clay
Service Company, and Wabash Valley Service Company, had its
first successful year. The organization will market nearly
50 million bushels of grain from 21 locations.
A new joint venture with
Illinois Farm Bureau incorporates the services of AgriVisor,
LLC into GROWMARK. “This venture brings marketing advice and
enhanced risk management to producers. New premium
subscription services will soon be added and AgriVisor will
introduce a number of new generation contracts that
give farmers the opportunity to manage risk while improving
the upside potential for profits,” Solberg said.
Subsidiary Operations
MID-CO COMMODITIES, Inc., which offers commodity hedging and
advisory services to member cooperatives and their producers
through the Bloomington, Ill., and Des Moines, Iowa,
offices, and to farmers through branch offices at country
elevators, will generate record income in 2007. MID-CO will
again pay patronage to its members, he said.
“MID-CO is a leader in
commodity hedging and information services. This has been an
extremely volatile year, with grain prices following the
increased demand for more corn for ethanol production and
protein demands around the world. MID-CO managed the
volatility and performed well,” Solberg said.
GROWMARK FS, the retail
agronomy subsidiary in the Northeast, made strategic
acquisitions of competitors’ facilities which have allowed
for enhanced market share and the consolidation of plants.
Two large retail plants were constructed at Laurel and
Milford. GFS is projecting pretax income of $3.5 million on
record sales of $145 million.
Seedway, the largely vegetable
seed business headquartered in Hall, NY, grew sales to
record levels with the acquisition of Mixon Seeds in S.C.
and Chesmore Seed in St. Joseph, Mo. Seedway projects pretax
income of $2 million on sales of $72 million. “Seedway
continues to deliver consistent profitability,” Solberg
said.
“The GROWMARK System is 80 years old. In the lifespan of any
corporation, this is a very long time,” Solberg said. “In
the early life of the System, our leaders identified
important principles that would need to be followed to
ensure long-term success. By remaining true to those
principles, our System has not only survived, but continues
to thrive.”
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