Jonathan Olmscheid, Chief Financial Officer
As another harvest season wraps up across UFC’s trade territory and we close the books on yet another fiscal year, I want to start with a sincere “THANK YOU.” To our hardworking employees and loyal patrons—your support has made 2024 a success. Together, we’re building a stronger cooperative, and we couldn’t do it without you.
Over the past few years, we’ve tackled numerous challenges that have impacted our operational and financial performance, including supply chain restrictions, inflation, cash management, generational workforce changes, increased employee costs, and the growing emphasis on technology. Some of these challenges have added costs and complexities, while others have improved efficiencies. Regardless of the circumstances, our goal remains the same: to enhance your experience as UFC patrons while maintaining a financially strong cooperative ready to face the next big challenge.
Although UFC is your local Minnesota cooperative, broader regional, national, and global issues significantly impact your farm’s profitability. As we head into the final weeks of harvest, here are some recent ag-related headlines and how they could influence your operations:
U.S. Corn, Soy, Wheat Stocks Highest in Four Years:
High stock levels generally lead to lower prices as supply outpaces demand. Keeping an eye on these market trends can help you time your sales more effectively.
Mississippi River Water Levels Rise, Barge Rates Fall:
Improved water levels and reduced shipping costs can ease the process of transporting grain, potentially enhancing your margins if you’re selling crops.
Carbon Pipeline Stalled with State Ruling:
Regulatory uncertainties around carbon pipelines could influence investments in sustainable practices or carbon credits. Monitoring these developments can help you prepare for potential long-term impacts.
Push for Sustainable Aviation Fuel (SAF):
The race to produce 3 billion gallons of SAF could boost demand for crops like corn and soybeans, creating new market opportunities for your farm.
Koch Completes Purchase of Iowa Fertilizer Plant:
Changes in the fertilizer supply chain might affect pricing and availability. Keep a close eye on input costs, especially if Koch’s acquisition alters market dynamics.
China’s Improved Crush Margins and Indian Corn Imports:
Improved soy crush margins in China and India’s corn imports for ethanol production suggest a shifting demand landscape. Staying informed on these trends can help you adjust your selling strategy.
Disruptions in transportation, regulatory changes, and supply chain adjustments underscore the complexity of today’s ag market. As you navigate these developments and plan for the 2025 crop year, consider how they interrelate with your specific operations and market positioning.
These factors not only influence your profitability but also shape how UFC conducts its business. To capitalize on market opportunities, UFC is dedicated to maintaining a strong balance sheet and supporting you—our patrons—through challenging times. Recognizing the pressures on farm profitability, the UFC board has refined the equity retirement strategy, distributing more cash back to you now when it’s needed most. This year, UFC retired $7.4 million in prior year equity and distributed $4 million in patronage cash from the 2023 fiscal year.
Thanks to another successful fiscal year with over $7 million in local savings, strong patronage for 2024 is anticipated. We’re committed to being your stable, supportive partner through whatever challenges come our way. Here’s to a prosperous end to the year and a bright start to 2025!