Having experienced another year with adverse conditions and limited income, Luckey Farmers was able to produce a net savings of $1,101,930 on sales of $112,105,273. This will allow your cooperative to return to the membership $790,000 in patronage. This equates to 3.8 cents per bushel of grain business conducted (2.0 cents on direct) and 2.5 percent for agronomy products purchased (1.0 percent direct). Your board of directors has approved distributing 50 percent of it in cash and the other 50 percent as equity credits.
As you may know, over the course of the past several years, we have taken a hard look at our entire operations to ensure that we are agile and responsive to the needs of our members and customers. This is why in 2016, we have continued to invest profits back into your cooperative to meet the demands for speed and space.
Our new fertilizer building located in Graytown replaced older facilities that were in dire need of repair. Instead of investing money at four different locations, the dollars we spent in one location will help serve the same area with increased technological advances and speed. Why did we choose Graytown? This location is the center of our members in the north with access to rail, which allows the flexibility to receive by either truck or rail.
As we continue to be prudent in our decision making, poising us for long-term growth and sustainability, we have made another substantial commitment for our members in the south and west with investment in Bradner Agronomy.
This spring, we will begin construction on a 100×426 warehouse with a 60×60 office. The facility will feature two load out bays for bulk CP and CN along with a 24/7 liquid UAN bay. In addition, a new bulk seed and treatment facility with a drive thru bay along with an updated maintenance garage will be erected. This will replace the current Lemoyne garage facility that is outdated and doesn’t meet the demands of our current fleet.
Having a central location will allow better inventory control and give us the speed and size necessary to compete in today’s environment. This will also allow for growth and employee cross training between divisions. The facility is projected for opening by the spring of 2018.
The strategic imperatives we are pursuing provide the most compelling path to increase shareholder value. We continue to evaluate each business unit to make sure your dollars invested are being utilized for the benefit of the overall membership, not for just one particular location vs another. Consolidation is happening all around us – yet Luckey has been able to survive without merging. With that said, we can’t continue to ignore the outside forces that are the cause of consolidation. We need to make these changes in order to maintain a local presence.
These investments are our continued commitment to serving our members to keep up with today’s speed and technological advances while maintaining good stewardship and environmental compliance.
In closing, I want to thank our Board of Directors, our employees and all our members and customers. We appreciate your business and look forward to assisting you in accomplishing your goals for 2017 and beyond.