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West Central Cooperative: Providing Quality Agricultural Products and Services

Established in 1933, West Central Cooperative is a farmer-owned cooperative based in Ralston, Iowa. We offer a wide range of grain, agronomy, feed, and soy processing products and services. With a commitment to quality, professionalism, customer focus, innovation, and integrity, we aim to meet the needs of our members and customers. Visit our website for sales history and more information.

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West Central Cooperative: Providing Quality Agricultural Products and Services

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  1. About Us • West Central was incorporated in 1933 in Ralston, Iowa, which is still its headquarters • West Central is governed by 9 elected board members and 2 appointed associate board members • 3,198 Class A Stockholders and 90 Class B Stockholders • Stockholders have invested $38 Million in the company • Ownership is determined by volume of business done • Stock is allocated yearly based on profitability

  2. Annual Operations • West Central employs 228 people • Grain – markets 60 million bushels • Agronomy - Seed, fertilizer and chemicals sales: $18,089,718 • Feed - processes over 128,000 tons • Soy Processing - processes 7.5 million bushels of soybeans and processes 65 million pounds of soy oil into methyl esters

  3. Core Values QUALITY Providing superior products and services PROFESSIONALISM Employees assisting customers CUSTOMER FOCUS INNOVATION Research, new products, new solutions INTEGRITY Honesty, trust, partnerships

  4. Sales History (millions)

  5. www.westcentral.coop

  6. Sales

  7. History of Cash Returned to Members

  8. Board of Directors

  9. Management Team

  10. Most Traditional Cooperatives are built on a business model that evolved from 1890 to 1920

  11. In that 30 year period 12,000 Farmer Owned Cooperatives were created

  12. Karl Nolin

  13. The Traditional Agriculture Cooperative is characterized by: Open Membership Growth Financed by Earnings or Debt No Supply Control No Market for Equity

  14. The Essential Elements necessary for long-term viability: Profitability is a Must Membership Must Remain Interested Investors Must Want to be Investors

  15. Profitability Liquidate “Legacy” Locations Establish Return on Asset Benchmarks Cooperative’s may be different from Investor Owned Firms in having a lower ROA Requirement

  16. Membership Must Remain Interested The Owners are the Customers Interest of Cooperative and Customers Must Align Function of Cooperative Must Be to Continually Re-align Goods & Services to Match the Needs of Customers

  17. Membership Must Remain Interested

  18. Is this any different than any other form of business? Membership Must Remain Interested

  19. Farmer Cooperatives usually appeal to a smaller universe of customers – its stockholders. Membership Must Remain Interested

  20. Investors want to be Investors Cooperatives need a mechanism to allow certain groups of investors to exit.

  21. Investors Exit Strategies • Aggressive Payout of Estates • Significant Classes of Equities have <10 Year Payout • Base Capital Plans • Preferred Stock with Characteristics that Reflect Liquidity • Payout by Age, i.e. 65 • Dividend – Voluntary Ownership • Non-qualified with Separate Payout Schedule

  22. Public Policy • FASB 150 • Limit of Return to Capital 8% • Dividend Allocation Rule

  23. If Traditional Cooperatives are able to: Remain Profitable Align the interest of cooperative and membership Maintain an Investors Group that wants to be Investors Then . . .

  24. I believe there is an opportunity for traditional cooperatives to serve a membership base for years to come.

  25. Are there any questions?

  26. Thank you!

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