WORKING FOR YOU YOUR COOPERATIVE 2016 ANNUAL REPORT

Transcription

1 WORKING FOR YOU YOUR COOPERATIVE 2016 ANNUAL REPORT

2 FROM THE Chairman of the Board We are entering a time of transition in A political transition has occurred nationally at the office of president of the United States, and as well a new cabinet will be put into place that will enact programs and policies that will affect everyone including agriculture. In addition to having a new agriculture secretary, a new farm bill will also be a part of this transition. How this legislation is reauthorized and enacted will impact all of agriculture including the livestock sector. In addition to the farm bill, agriculture will be influenced in many other areas where reform has been promised including taxes, trade, and immigration. What direction and to what extent change is made in these areas will impact decisions both cooperatives and producers will need to consider going forward. Your cooperative is and will continue to be involved on both the national and state level on many issues in the livestock sector and other areas addressing agriculture as well. Other issues we will continue to be concerned about in 2017 as producers and cooperative members include product labeling, particularly absence labeling claims and the implications of those claims from production technology availability for farmers, to accurate nutritional information for consumers. Defining and applying sustainability plans to our cooperative and to each of our individual operations, and the continued availability of antimicrobials and the ability for producers to judiciously use them for safe and efficient food production. Anticipating and assessing change and transition is also an ongoing focus of your cooperative within its own business. As the livestock operations of our membership continue to adapt and change to maintain economic viability, the diversity in their size and management style continues. The evolving marketing needs of these current operations will define our commitment to our membership, including services provided ranging from livestock marketing assistance, livestock transport, and producer financing to the operation, location, and number of facilities. Developing plans and strategies to meet the future and diverse needs of our membership is critical and will certainly result in changes as your NORM FRUIT CHAIRMAN OF THE BOARD cooperative works for you moving forward. Other important components to your cooperative s commitment to working for you and the key to its continued success are the qualified and dedicated employees that develop and manage the programs and facilities for Equity Cooperative. Support of our youth from the federated and local level, investing in 4-H, FFA, and scholarships for college students to ensure the next generation of leaders for agriculture, and specifically your cooperative gives you the opportunity to become involved and make a difference at many different levels. This ownership responsibility gives member owners of Equity Cooperative the assurance of a committed and trusted partner in their business of marketing livestock. I want to thank you for your continued confidence in Equity Cooperative Livestock and wish you a safe and successful EQUITY COOPERATIVE LIVESTOCK SALES ASSOCIATION

3 FROM THE President & CEO Each year we see change and this year is no different. In some cases the changes we experienced last year seemed to have been more dramatically negative than what we have seen over the recent history. Record high cattle prices that we had seen in 2015 dropped precipitously in From calves, to feeders to fed and cull cattle producers experienced drops in sales prices that ranged from one half to two thirds in value. These price reductions could, in large measure, be attributed to the rapid expansion in the cattle herd in the south and western areas of the United States coupled with the fact that carcass weights have also increased. In short more product has been produced for consumption than in the near past. Compounding price drops, the cooperative has experienced our third consecutive year of decreases in the number of livestock we handled, although the total volume handled in 2016 was still above levels handled in Our experience during the record high prices was that calves and feeders were being purchased and moved out of state, making them unavailable to us in future marketing s. In addition during the period of high prices competition increased which has carried over into this period of low prices. Change also occurred in the way we operate with new regulations being instituted both at a federal and state level. On the federal level we have seen proposed regulations that change our health care program, our wage structure, and the rules we operate under the Packers and Stockyards guidelines. Changes in our health care program increased both the cost of insurances and the administration of the programs. Rules redefining overtime pay have resulted in mandated increases across a class of employees. And, a change on how Packers and Stockyards regulations are administered has required changes in our policies and procedures in order to be in compliance. Turning to the state, rules and regulations we experienced or are expecting changes are in animal traceability, animal welfare, and check-off collections adding additional burdens to your cooperative. We expect rules to change on how animals are identified which may require structural changes to our marketing facilities. Animal welfare remains a highly visible and ever-changing project. Check-off collections CHARLES ADAMI are scheduled to PRESIDENT & CEO change requiring procedure and sales software modifications. Putting the negatives aside, any change brings opportunity. The signals being sent by the market will cause a change in production that will see the growth of the livestock herd slow and hopefully be accompanied by price increases. The ability to enlarge the size of our meat market is dependent on improving our export markets. Over the last year there has been a double digit growth percentage in exports which is predicted to continue in We at Equity remain involved in efforts with national and state organizations that promote agricultural trade. Changes in national and state rules and regulations will allow us to find ways to provide better health care options and wage structures that will entice and retain employees. In addition to finding efficient ways to identify livestock will help contain disease outbreaks while enhancing marketing efforts. Improving animal welfare information and public awareness will address consumer concerns. All in all, change is an avenue to growth if embraced rather than fought. We, the staff at Equity, hope that the changes you are experiencing lead you to a better future outcome. We also wish to pass on our gratitude to the loyal patrons of Equity Cooperative Livestock Sales Association ANNUAL REPORT 2

4 WORKING FOR The purpose of a cooperative is to work together for the benefit of all members and, in turn, offering services to you at competitive prices and allowing you to be more financially successful. Our goal has always been to create benefits for you, our members. As we move toward the future, we are very optimistic about what the future has in store for agriculture and Equity. By working together we will all benefit. We will continue to focus on successfully delivering services needed by Equity s membership. Another asset of the cooperative is all of our dedicated employees, both new and existing. Without them, your cooperative would not be able to accomplish the services as effectively as we can. The staff at Equity are involved in numerous committees, organizations and lobbying groups at the national and state levels, working on behalf of our members for the betterment of our industry. Many hours are devoted annually voicing the best interests for our cooperative and issues that directly touch our member patron businesses. Equity Cooperative Livestock partners with several organizations within the livestock industry and 3 EQUITY COOPERATIVE LIVESTOCK SALES ASSOCIATION

5 YOU YOUR COOPERATIVE beyond to work for members. Organizations such as the National Livestock Producers Association (NLPA), National Council of Farm Cooperatives (NCFC), National Cattlemen s Beef Association (NCBA), National Institute for Animal Agriculture (NIAA), Cooperative Network, Wisconsin Beef Council, Wisconsin Livestock Identification Consortium (WLIC), Wisconsin FFA Foundation, and Wisconsin 4-H Foundation all have an opportunity to provide critical input on issues that affect livestock producers and their businesses on a daily basis. If you haven t already done so, please keep up with Equity by viewing our website, liking our Facebook page and following us on Twitter and Instagram. We look forward to working with you as we move forward. Like us on Facebook Twitter@equity_coop 2016 ANNUAL REPORT 4

6 ASSETS Current Assets $21,707,917 $24,201,829 Property and Equipment 5,391,152 5,240,519 Investments and Other Assets 4,479,683 5,098,323 TOTAL ASSETS $31,578,752 $34,540,672 LIABILITIES AND PATRON EQUITIES Current Liabilities $19,683,132 $20,190,865 Long Term Debt, Less Current Maturities 2,122,918 4,818,676 Minimum Pension Liability 2,119,014 2,272,226 TOTAL LIABILITIES $23,925,064 $27,281,766 Patron Equities 7,653,688 7,258,905 TOTAL LIABILITIES AND PATRON EQUITIES $31,578,752 $34,540,672 CONSOLIDATED STATEMENTS OF OPERATION Gross Operating Revenues $514,927,769 $759,480,463 Payment to Producers (502,568,667) (745,129,987) NET OPERATING REVENUES 12,359,102 14,350,476 Operating Expenses 12,038,463 13,594,885 NET PROCEEDS FROM OPERATIONS 320, ,591 Non Operating Income / (Expense) (91,273) (83,111) NET PROCEEDS BEFORE INCOME TAXES 229, ,480 Provision for Taxes 7,599 (7,600) NET PROCEEDS $236,965 $664,880 A summary of the audited financial statements may be found at or a copy of the complete audited financial statements may be requested by contacting Nancy Bilz, Vice President of Finance/CFO, 401 Commerce Ave. Baraboo, WI EQUITY COOPERATIVE LIVESTOCK SALES ASSOCIATION

7 BOARD OF Directors DAN LEISCHER DISTRICT I DAVID WILKE DISTRICT II ASSISTANT SECRETARY/TREASURER STEVE SCHLEIS DISTRICT III SECRETARY/TREASURER PETE KLEIMAN DISTRICT IV ALLAN CIHLAR DISTRICT V LES DANIELSON DISTRICT VI VICE CHAIRMAN OF THE BOARD KARL MEROW DISTRICT VII DWIGHT TRUTTMANN DISTRICT VIII NORM FRUIT DISTRICT IX CHAIRMAN OF THE BOARD ADAM QUANDAHL DISTRICT X MANAGEMENT Team CHARLES ADAMI PRESIDENT & CEO TOD FLEMING EXECUTIVE VICE PRESIDENT OF MARKETING & COO MICHAEL BOURKE FACILITIES AND PATRON SERVICES CURT LARSON ADMINISTRATION NANCY BILZ FINANCE & CFO DAVID JOHNSON MARKETING GARY WILLIAMS CREDIT SERVICES ROB MEIER INFORMATION SYSTEMS 2016 ANNUAL REPORT 6

8 Barron Menominee Buying Station Bonduel Altoona Thorp Marion Ettrick Buying Station Stratford Reedsville Sparta Waukon, IA Lomira Arlington Richland Center Johnson Creek Monroe P.O. BOX 1003 BARABOO, WISCONSIN FAX