A soft market and lack of patronage dividends, had a snowball effect, leaving Western Cooperative (WESTCO) with a net loss of $357,000 and no dividends paid out for this year.
More than 200 people attended the 77th Annual Stockholders’ Meeting of WESTCO, held Dec. 3, at the Alliance High School Performing Arts Center.
“We had a lot of great things happen here at WESTCO,” said David Briggs, general manager at WESTCO. “In particular we had some great contracts for our producers on the bean business. However, the bean business got very soft in the out market and our margin deteriorated as we went through 2018.”
The bean inventory for the end of the fiscal year 2018, involves the mark to market. A process where WESTCO marks the inventory down, to the current market. While the bad, such as tariffs, have been affecting the market, Briggs, said the outlook could change soon.
“We are also encouraged, by President Trump’s recent comments and talking with China. It shows us our congressional delegation is doing a good job relating to the President these tariffs are really hurting our farmers,” he said.
Briggs added with those efforts, he is confident WESTCO will be able to achieve their normal margins.
The other factor in the loss was CHS, one of WESTCO’s regional cooperatives, did not pay a patronage dividend this year. Briggs expects to return to normal savings in 2019.
Chairman Mark Buskirk announced that the Board approved the Equity Redemption for all members age 70 and older, returning $650,000 back to those members.
“During these difficult times in agriculture, the cooperative system is here serving our region daily, providing secure markets, good locations and the supplies needed to operate farms and, ranches,” Buskirk said.
WESTCO has seven divisions serving, its members. Briggs highlighted the positives for the year, including an 11 percent rise in propane sales, the second largest year for fertilizer tons, upgrades to the New Alliance facility, overall good volumes and BRC audit approval, which is the global standard for food safety.
The evening concluded with a performance of “Hamlette” by the Alliance High School one-act team, under the direction of Instructor Mary Theresa Green. The drama students also helped serve the meal, which was catered by West Side Events Center.