hicago, Illinois
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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