At the GROWMARK Annual Meeting in Chicago today, CEO Bill Davisson reported that the Bloomington, Ill.-based agricultural cooperative has made positive progress on the purchase of the Agronomy and Seedway businesses of Agway, Inc., a New York-based agricultural cooperative. The possible purchase would also include Agway’s stock interest in both fertilizer manufacturer CF Industries and Allied Seed LLC.

"We hope to sign a purchase agreement very shortly. We would also need to complete due diligence before this possible transaction is finalized. We believe we can close on the assets before the end of the calendar year," Davisson explained to the 1,500 farmers in attendance at GROWMARK’s 75^th Annual Meeting. "This opportunity fits with our goal of strategic growth and is squarely in line with our mission of improving the long-term profitability of our member-owners."

Vice President of Finance Jeff Solberg reported that GROWMARK posted sales for the 2002-03 fiscal year of $1.3 billion, down slightly from last year. Earnings of $17.5 million were reported, compared to $18.3 million last year. The GROWMARK fiscal year-end close is Aug. 31, so Solberg was working from unaudited, estimated after-tax results for GROWMARK on a consolidated basis.

Patronage of $14.4 million will be paid to GROWMARK member cooperatives.

Divisional Results

According to Solberg, the cooperative’s fertilizer tonnage was nearly equal to last year. Seed Division sales increased, with the majority of that growth coming from the addition of DEKALB and Asgrow seed brands to GROWMARK’s offerings.

In the Energy Division, sales volume increased three percent. Geographical expansion and retail fueling operations increased gasoline volume nine percent.

"Nearly half our gasoline volume is sold in markets we did not serve four years ago," Solberg said. "Our FAST STOP branded network now includes more than 200 locations."

A newly formulated premium diesel, Dieselex Gold, was introduced this year. And GROWMARK’s "Home Grown Fuels" campaign was introduced in January to further promote ethanol and soy-based biodiesel products.

"We expect strong demand for renewable fuels in the future, and we’re committed to providing quality renewable fuel products and to helping create increased market demand for the crops grown by our farmer-owners," Solberg added. "We’ve been a distributor of renewable fuels for nearly 30 years."

GROWMARK holds ownership in National Cooperative Refinery Association, which had record earnings from refining margins this year, returning $14 million in patronage to GROWMARK.

UPI, the Ontario-based energy company jointly owned by GROWMARK and Sunoco, is a major fuel supplier in the province. GROWMARK projects a dividend from UPI of US$1 million for 2002, according to Solberg.

The GROWMARK feed alliance with Land O’Lakes continues, and participating local cooperatives will receive $1 million in patronage this year.

Facility Planning and Supply Division results were on budget, but behind last year. Demand for grain systems and buildings started strong, but declined as weather and economic concerns slowed capital purchases. Facility equipment sales and income increased, Solberg added.

The GROWMARK Consumers Division serves 145 retail locations operated by Ontario member cooperatives and Country Depots. The Growers Edge (Lawn and Garden) and Pet Headquarters programs produced five percent and three percent sales increases respectively.

The Grain Division’s profitability continues, with member grain volume up three percent.

"Strong grain demand in the U.S. and overseas, coupled with the support of our member cooperative system, contributed to another good volume year," Solberg said. "The GROWMARK Grain Division is well established as a leader in specialty grains, and those offerings continue to grow in number and size. The specialty programs are designed to enhance both farmer and member cooperative profitability."

MID-CO COMMODITIES recorded another profitable year. MID-CO offers hedging and advisory services to member cooperatives and their producers through the Bloomington, Ill. and Des Moines, Iowa offices, and to farmers through 33 branch offices at member cooperatives. MID-CO earnings were $625,000; and $425,000 in patronage will be paid this year, all in cash.

FS Agri-Finance is an important marketing tool as local co-ops provide products and services to farmers. In the fifth year operating under the agreement with John Deere Credit, FS Agri-Finance is expected to realize loan drawdowns of more than $110 million, a record year.

"With a strong balance sheet as a base and an improving operating statement, GROWMARK is in sound financial condition," he added.

GROWMARK, Inc. is a federated regional cooperative that provides agriculture-related products and services in the Midwest and Ontario, Canada.