June 19, 2019

Archives for December 2015

Built to Last: Looking Forward to the Next 100 Years

MaxYield100GradientHow do you create a company that stands the test of time? Make strategic business decisions. Overcome adversity. Repeat.

While it’s never that simple, the principles of adapting and overcoming drive any business that joins the exclusive group of 100-year companies, including MaxYield Cooperative.

“Celebrating 100 years in business is a tremendous milestone, whether it’s a Fortune 500 company, a farm, or an ag cooperative,” said Keith Heim, MaxYield’s CEO. “For MaxYield, it means staying relevant in a world that continues to change fast.”

Staying relevant reflects the goals that motivated the first stockholders to meet at 2 p.m. on April 6, 1915, to create the new West Bend Elevator Company. For generations, the cooperative has allowed members to band together and achieve things that they couldn’t do individually, from purchasing coal at a competitive price to providing a viable market for grain.

While the cooperative’s founding principles haven’t changed, clients’ needs have evolved dramatically through the years, Heim noted. By January 1943, the Algona Upper Des Moines newspaper reported that a meeting was held at the West Bend Elevator Company to urge local farmers to grow more flax in support of the war effort. In fact, the state of Iowa was asked to increase flax production by 28%.

Adapting to changing times has meant more than growing new crops during the cooperative’s 100-year history. “The cooperative had a close call in the 1990s,” Heim said. “Weathering major challenges is not uncommon, however, for any company that has lasted 100 years.”

Honoring the past, focusing on the future
To celebrate MaxYield’s 100th birthday, the cooperative hosted barbecues this summer in Algona, Belmond, Britt, Emmetsburg, Lakota, Spencer, and West Bend. “We had excellent attendance and thank you for your continued support of MaxYield,” Heim said.

This support will remain vital to MaxYield in the future, he added. MaxYield is embracing the fast-paced world of precision ag, where the data revolution continues to evolve and modern seed technology is breaking yield barriers while increasing the need for efficient grain-handling systems.

MaxYield will operate in a much different world than the cooperative’s founders experienced in 1915, yet some things never change. “We remain focused on providing the solutions you need to stay competitive,” Heim said. “We look forward to helping your cooperative succeed for the next 100 years.”

Grain Marketing Simplified: Firm Offers Pay Off for Clients

Know how frustrating it is to miss a profitable grain price when you don’t put in an offer ahead of time? Tony Girres knows that feeling. It’s why he started using firm offers with MaxYield Cooperative.

“I can only store a portion of my crops and don’t want to think about grain marketing all the time,” said Girres, who farms near West Bend. “I’ve used firm offers for a number of years and like the system.”

Girres determines his cost of production and makes a plan to sell ahead. He can put in a firm offer on any price, and MaxYield’s computerized system will keep an eye on the offer 24/7.

“About half of my offers hit in the overnight trade. If I didn’t have the firm offer, I’d miss this opportunity.”

Worry less about grain marketing
MaxYield’s firm offer system is a great way to gain a marketing edge, said Harry Bormann, MaxYield’s grain team leader. About 69% of MaxYield’s fall 2015 corn purchases and 58% of MaxYield clients’ fall 2015 soybean sales came from firm offers.

“With firm offers, clients often got a price that was $1 to $1.50 per bushel higher than harvest-time sales in 2014,” Bormann said. “Corn was consistently 50 cents to 75 cents better for pre-harvest sales than harvest-time sales.”

Many firm offers are triggered in the overnight trade, just as Girres has experienced. “If the market starts to move higher, traders go where the offers are,” said Bormann, who noted that the overnight trade is tough for individual clients to track. “Traders have to seek out whatever is available to buy, and that includes grain from firm offers.”

While a growing number of MaxYield’s most progressive clients use firm offers, some clients have one big question on their mind. What if you take my offer and the market goes higher?

“Let’s hope it does,” Bormann said. “When your first offer gets taken, put in another offer at a higher price.”

This works for Girres, who sells his grain in increments. Throughout the year, he puts in offers at levels above his breakeven. Then he doesn’t have to worry about hitting the “right” time to market his grain.

It’s a smart strategy, Bormann said. “Don’t try to market your whole crop at one price. We recommend selling your grain in increments of 10% to 15% and using firm offers to market the number of bushels you’re comfortable with.”

Get started today
Firm offers are available on corn and soybeans, and there’s no charge to place one. Team members at any MaxYield location can help you get started with firm offers.

“The process is simple,” Bormann said. “Don’t let that grain you’ve put in the bins this fall sit there without a price goal.”

Keep using firm offers throughout the year to maximize your profit potential. “The best thing you can do is start putting in offers for the 2016 crop, which gives you a whole year to market,” said Bormann, who added that it’s not too early to look at marketing some 2017 grain. “When you’re planting corn next spring, sell some corn, too.”

Girres plans to continue using firm offers in the months ahead. “The firm offer system makes it easier to sell ahead and stick to a marketing plan. It works for me.” n

Firm Offers Aren’t Just for Grain
Because the firm offer system works so well on grain, MaxYield’s energy division also offers a firm offer where clients can specify the price they want to pay for fuel. For more information, contact MaxYield’s energy solutions specialists, including Mark Collins (641-425-5184) and Doug Shirk (515-320-5629), or call Energy Central at 515-887-7282.

Giving Back: Tanks of Thanks Celebrates Good Deeds

There are lots of people who go above and beyond to serve our local communities. It’s about time they get a little something back.

“That’s what Tanks of Thanks is all about,” said Chad Besch, MaxYield Cooperative’s energy team leader. “It’s a way to say thank you to people who are doing a lot of good and don’t do it for the glory.”

A number of people throughout MaxYield’s trade territory have been selected to receive a $50 Cenex® gift card that can be used to buy any item of their choice, including fuel, at Cenex stores. MaxYield is proud to partner with Cenex, which funds this unique reward program.

“Our communities are filled with teachers, librarians, fire chiefs, food pantry volunteers, mayors, and many others who devote an amazing amount of time to serve others,” Besch said. “Many also donate money out of their own pocket to support programs that benefit the community. Tanks of Thanks honors these folks who go above and beyond the call of duty.”

Since the program started in 2012, Tanks of Thanks has recognized more than 14,000 people and given away more than $400,000 in free merchandise. Giving back to the community is important to Cenex and MaxYield, which owns and operates Cenex stores in West Bend, Whittemore, and Fostoria.

“Cenex stores are your hometown convenience stores,” said Besch, who added that Cenex offers home-grown biofuels.

Nominate someone you know
While MaxYield nominates Tanks of Thanks recipients, you can too. If you have friends, family, or neighbors who are doing good in the community, visit www.cenex.com/tanks-of-thanks, and briefly describe why they deserve a Tank of Thanks. The process is easy, and anyone can be nominated for any act of kindness—big or small.

Local Tanks of Thanks Winners
Algona area
Chuck Bell
Mary Hannover
Erby Shipler
Linda Vaught

Britt area
Jerry Christensen
Allan Doughan
Chet Eisenman
Don & Kay Kopacek
Bev Nelson
Paul Smith

Emmetsburg area
Howard Argabright
Sheryl Darling
Myrna Heddinger
Jeff Morey
Dick Zwart

Fostoria area
Sandy Alexander
Cecilia Barber
Kris Johnson
Florence Kramer
Brian Peck
Jerry Peterson
Mary Smith

West Bend area
Diane Dahlhauser
Craig Olson
Protein Resources
Darla Winklehorst
Loren Winklehorst
Doug Wirtz

Whittemore area
Eric Goodman
Sandy Long
Bob Meyer
Joy Metzger
Gary Person
James Zinnel

MaxYield Co-op Holds 101st Annual Meeting

MaxYield Cooperative® held its 101st Annual Meeting Thursday, December 17th at the Community Center in Britt, IA.

Board chairman Howard Haas of Algona called the meeting to order at 10:00 a.m.

During the meeting, MaxYield CFO Susan Post discussed the financial results of the cooperative. Highlights of the audited financial report for the fiscal year ending July 31, 2015 included local earnings of $925,273 and total earnings reaching $4.2 million.

Haas provided the membership an update on recent capital improvements across the cooperative, including grain storage projects in Mallard and Fostoria and new LP Gas storage south of Britt.

CEO Keith Heim discussed with members MaxYield’s retirement of preferred stock, the cooperative’s improved financial condition and its emphasis to improve facilities and equipment.

Board secretary Eric Marchand of Britt announced the results of the director election. Barry Anderson of Gillette Grove, Ron Rouse from Curlew and Howard Haas of Algona were reelected to serve three year terms.

More information about MaxYield can be found at www.MaxYieldCoop.com or www.FromTheField.com.

Moving Beyond a World of $7 Corn

Jim Wirtz 1By Jim Wirtz, MaxYield board member

A lot was on my mind as I harvested my crop near West Bend this fall, from memories of my son to hopes for high yields. I’m grateful this is one of the better corn crops I’ve harvested since I started farming in 1977.

Like any farmer, I’ll need those bushels, especially with the way commodity prices have dropped in the last year. This new economic climate has affected all our businesses, from the farm to the co-op. It’s also why MaxYield’s 2015 fiscal year results came as no surprise. With the days of $7 corn behind us, tighter margins have prompted farmers to cut back on fertilizer and other inputs.

As a retired ag lender, I’ve seen how these cycles in the farm economy affect the local economy. Farmers are good about stimulating the local economy when they have the money. When the rally in ag prices took off in 2008 and gained momentum through 2013-2014, farmers upgraded a lot of infrastructure. So did MaxYield, plus we strengthened our balance sheet.

Working together is success
As we go through challenging economic conditions, I’m glad MaxYield has excellent team members working on our behalf. It’s not just a job to them. They take pride in our cooperative and go above and beyond to serve.

I also appreciate my fellow MaxYield board members, who work hard to keep MaxYield on a path to success. Serving on the board gives you a whole new appreciation for MaxYield, which has grown from humble beginnings in 1915 to a multi-million-dollar business that covers a large portion of northern Iowa.

I encourage you to run for MaxYield’s board. Serving on the board is an enjoyable experience that teaches you a lot about how the cooperative works. It’s a much different perspective when you’re inside looking out, rather than outside looking in.

That’s also why communication with the board is always appreciated. If you have a question or a concern about MaxYield, contact me, or let any of the other board members know. Also, I invite you to attend MaxYield’s annual meeting at the Community Center in Britt on Dec. 17. This is a great opportunity to stay connected with your cooperative.

We appreciate your support and are glad you choose to do business with MaxYield. As we celebrate MaxYield’s 100th birthday and look to the future, I’m reminded of Henry Ford, who said, “Coming together is a beginning. Keeping together is progress. Working together is success.”

 

 

The Secret is Not to Stop

20140514_maxyield_292 (681x1024)By Keith Heim, CEO

There’s a story about an old farmer who wasn’t known for his progressive methods, yet he managed to make a successful career out of farming. As he looked back on his life, he chalked his success up to one simple fact. “The secret is not to stop,” he said.

This kind of persistence is vital to success. It’s especially important during a year like 2015, when the economic climate became much more challenging in agriculture. This year also highlights why a business needs a solid foundation and a game plan.

As we look back on MaxYield’s 2015 fiscal year, your cooperative’s earnings were down compared to previous years. We still achieved what we set out to accomplish, though, from paying down debt to upgrading assets.

Here are some of the highlights:
• MaxYield showed $925,000 in local earnings and total earnings of more than $5 million. This was our lowest local earnings year since 2007. Lower commodity prices during the year slowed the ag economy. MaxYield also recorded lower fertilizer applications. I’m hopeful we’ll see more fertilizer applications in 2016, however, due to higher 2015 yields and the likelihood that farmers won’t be willing to lower soil nutrient levels.

• Based on the last fiscal year’s financials, the board approved $807,000 in patronage for 2015, with 40% of that allocation paid in cash.
• In addition, the board approved passing about one half of MaxYield’s domestic production activities deduction (DPAD) to members. We passed this through in the form of a tax deduction totaling $2.112 million. Members can use this DPAD as a 2015 tax deduction on their individual returns. When the 40% cash patronage and the cash value of the DPAD pass-through are combined, that’s more than $1 million in cash value to the membership. I believe that’s a success story.

• In September, the board approved retiring the oldest outstanding year of previously allocated patronage at face value. The board also approved $200,000 in cash for the second discounted equity offering. The same two equity groups used last year will be eligible for the discounted equity program this year. Information will be mailed to members in late November following harvest. Members will have until early 2016 to choose whether to participate.

• MaxYield invested $6 million during the last fiscal year in equipment, rolling stock, and facilities throughout the company, including two grain storage additions. We didn’t acquire any term debt to make these investments.

• The board approved and paid $875,000 for the retirement of previously allocated patronage.

• We retired $3.1 million of term debt during fiscal year 2015. At the end of fiscal 2015, MaxYield’s balance sheet showed just under $29 million of working capital, term debt of $15.5 million, and local equity of more than $36 million, resulting in the lowest local leverage ratio in years.

• MaxYield’s retained savings total more than $38 million, up from retained savings of negative $122,000 on July 31, 1997. That’s a great indicator of progress.

Going forward, your cooperative remains a financially solid company. We know the secret is not to stop. That’s why MaxYield’s board will continue to pursue a balanced approach of upgrading assets, retiring term debt, and retiring previously allocated patronage.

On behalf of all of us at MaxYield, we appreciate your support and look forward to working with you in 2016.