Cooperatives: What we’ve seen in 2013

January 1, 2014 Cooperatives

Sales mainly lower, some steady with increased average prices.
Significant reduction in grain volumes: up to 45% decrease compared to 2012.
Lower revenues, primarily grain related.
Overall, most clients were more profitable in 2013 compared to 2012. Local savings were down, offset by significant increases in regional earnings.
Commodity margins were steady to lower; gross savings down in grain from lower volumes, steady in agronomy and energy.
Grain measure ups, resulting in “long” positions being sold to capture higher grain prices.
With no carry and an inverse in the grain markets, borrowing was down; reducing interest expense.
Pay downs on term debt.
Increased emphasis on expense controls, overall decreases for many.
Wide range of 2013 harvest yields; record harvests for some, similar 2012 drought year results for others.
For those without space, many grain piles still on the ground on December 31.
Continued investments in grain speed and space as well as increased agronomy investments.
Increased merger activity; including increased interest in merger rules regarding “fair value”.
Increased use of non-qualified patronage dividends.
Continued use of Section 199 benefits and bonus depreciation.
Emphasis on equity management, cooperative ownership – allocated and unallocated.
Increased coop training; interns, Coop “Universities” and classroom presentations.