Growmark has reported estimated, unaudited net income of $134 million (before patronage) on sales of $4.2 billion for the year ending Aug. 31, 2007. Both are all-time records. “Our wholesale businesses that provide seed, plant food, crop protection products, grain systems, and energy products and services, all produced strong results,” said Vice President of Finance Jeff Solberg. “Additionally, Growmark retail business units now comprise over $1 billion, or 25 percent, of sales.” Prior year audited net income was $73.5 million (before patronage) on sales of $3.6 billion.
More than $92 million in patronage refunds will be returned to member cooperatives. Growmark said this is the first time in nearly three decades that it has distributed patronage refunds from all of its major product divisions. Likewise, it will be the largest patronage refund in history.
Growmark said its agronomy division generated record income at the wholesale level, and that plant food volumes moved at record levels due to increased corn acres and higher market share.
Growmark FS (GFS), the retail agronomy subsidiary in the Northeast, projects pretax income of $3.5 million on record sales of $145 million. Growmark said the unit has made strategic acquisitions of competitors’ facilities that have allowed for enhanced market share and the consolidation of plants. Three large retail plants were rebuilt at Bridgeton, N.J., and Laurel and Milford, Del., within the past 18 months. The Bridgeton facility, with 6,000 st of storage, replaced two nearby locations. Laurel has a new blending plant and 6,000 st of storage capacity. Milford added 8,000 st of capacity to its existing 20,000 st. Steve Buckalew, Growmark vice president, eastern retail operations, told Green Markets that GFS is in the process of upgrading its entire system of some 40 locations over the next ten years.
Growmark seeds sales saw a 25 percent increase in sales, to a record $160 million for the year ?Çô despite a 10 percent drop in soybean sales. “The need to become a seed company was identified years ago as crop protection was migrating from the sprayer to the seed bag,” said Solberg. “Our seed business is growing rapidly as a result of our commitment to planning and follow-through.”
Growmark noted that Seedway, its 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.
Growmark’s 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.
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.
Total Grain Management (TGM), a partnership between Growmark, Effingham-Clay Service Company, and Wabash Valley Service Co., 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.
Growmark’s subsidiary, 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.
“The Growmark System is 80 years old,” note Solberg. “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.”