2007 Annual Report - Year in Review
Energy
GROWMARK’s Energy Division posted its fourth consecutive
year of record gross income estimated at $131 million.
Highlights included a record $78 million in patronage from
the National Cooperative Refinery Association (NCRA), strong
growth in sales of refined fuels, and record propane volume.
GROWMARK’s 50 percent ownership of UPI,
Inc. in Ontario continued to deliver excellent results as
approximately 127 million gallons of fuel were sold by UPI
this year.
GROWMARK Lubricants, based in Council
Bluffs, Iowa, is contributing to our System’s success with
FS branded products, as well as the United and Archer
brands. This business, acquired just one year ago, has
helped triple our lubricant sales.
Agronomy
The Agronomy Division achieved record sales volume and
internal gross income in 2007. GROWMARK and members are
working together to approach crop protection manufacturers
as a single wholesale and retail market force. Looking at
market opportunities, a newly-launched line of proprietary
adjuvants more fully rounds out our crop protection product
offerings for farmers.
On
the plant food side of the business, we provide market
advice with firm purchase recommendations to meet member
cooperative and subsidiary needs while managing price and
volume risk. To support local sales efforts, our Agronomy
Services team provides scientific expertise that enables our
System to respond to individual farmers’ concerns and field
issues.
Seed
Our concerted effort to “Lead with Seed” includes a new
marketing initiative titled “Farming Smart Begins with FS
Seed.” Thanks to our members’ commitment to the “Lead with
Seed” approach, we achieved re
cord
sales, record gross income, and record corn unit volume in
2007. Overall seed dollar sales were up 22 percent; seed
corn units rose by 52 percent, a direct result of earning
additional acres of farmers’ business.
Grain
Supplying services to grain member cooperatives for
improving local profitability, developing or identifying new
risk management tools for producers, evaluating
opportunities based on the changes in the grain flow created
by the biofuels industry, and analyzing additional
investment opportunities in biofuels are strategies of the
grain division.
Partnering opportunities with FS member
cooperatives continue to reap benefits for all involved.
Total Grain Marketing, LLC, a partnership between GROWMARK,
Effingham-Clay Service Company, and Wabash Valley Service
Company, will market nearly 50 million bushels of grain from
21 locations.
Facility Planning & Supply
GROWMARK has proactively addressed the increased demand
for on-farm and commercial grain storage generated by recent
large corn crops. Our new “Look Outside the Bin” campaign
helps enhance member cooperatives’ marketing efforts and
focuses on the total experience a farmer has with his FS
cooperative. Consequently, grain systems sales have more
than doubled in the past three years, and the division
reported record construction volume.
Subsidiary Operations
MID-CO COMMODITIES, INC., had a record income year. Our risk
management subsidiary’s performance is solid and consistent,
which is significant. The grain merchandising industry is
highly competitive, and in this era of mergers and
consolidations, MID-CO remains able to meet and exceed the
demands of the large commercial elevator and tailor services
to the rural community elevators that are the lifeblood of
the Corn Belt.
AgriVisor, LLC has been incorporated
into GROWMARK as a joint venture with Illinois Farm Bureau
to offer commodity grain and livestock marketing advice to
Illinois and Iowa farmers. The new venture will supplement
those current services with new generation contracts, hybrid
grain contracts, premium marketing management services and
brokerage services.
GROWMARK FS will finish the year with
record sales of $147 million and pre-tax earnings of $3.2
million. Future strategies include the rebuilding of the
agronomy distribution system along the Eastern Seaboard and
seeking opportunities to grow market share.
Seedway, LLC, which markets farm, turf,
and vegetable seed in the Eastern US and Ontario, Canada,
will complete another successful year with sales of $74
million and pre-tax earnings of $2 million. Seedway’s
strategy for the future is to grow its business and
diversify geographically.
Financial Report
Report Summary
Letter to Shareholders
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