FINANCIALS

The 2022–23 fiscal year was not without its challenges, but we managed to report positive local savings again this year. We were able to return $1.0 million in cash patronage this year and redeem over $890,000 of deferred equities. The continuing drought, along with the fires we experienced in the spring of 2022, had a negative effect on Ag Valley Co-op, as we experienced a decrease in volumes across all business units. The strength in the commodity markets through most of the year came with disadvantages as we continued to see high input prices. Ag Valley Co-op is perfectly positioned to help you manage that input price risk while ensuring that you have the inputs you need for your operations. We are committed to serving our partners by remaining relevant in the marketplace and bringing value to your family farms. Our ongoing investments in facilities and equipment are the foundation for our future growth and success.

A Broader View

This has been a challenging year for Ag Valley Co-op and our members. We remain committed to providing quality goods and services while maintaining financial stability and growth.

Statements Of Operations

High commodity prices translated into a substantial increase in total sales from the previous year. Volumes were down across all business units as we worked through the effects of the drought and the Road 739 and Road 702 fires.

Other operating revenue was down significantly from the prior year. Grain services income was down primarily due to reduced storage income as producers took advantage of higher commodity prices.

Agronomy services were down as we experienced a decrease in our agronomy volumes. Feed and station services also experienced declines.

Total operating expenses increased due to labor shortages and market volatility

Personnel expenses increased slightly in 2023 as the labor crisis continued. Human capital is one of the core strategies that we are focused on this year, and we will continue to make that a priority for your cooperative. We understand that our employees are the backbone of our company, and without them, we cannot provide you with the quality products and services you have come to expect from Ag Valley Co-op.

We did experience a significant increase in fixed expenses this year. Insurance expenses and interest expenses top that list. Everyone is aware of the increase in interest rates that we have experienced over the last 18 months. The insurance market continues to be a very hard market as insurance companies continue to re-evaluate their risk tolerances and charge accordingly.

Our continued focus on our credit policies again resulted in a net zero for bad debt expenses. Rent and lease expenses increased as we continued to work towards keeping an updated fleet of liquid and dry fertilizer application equipment.

Balance Sheets

For the 2022–23 fiscal year, we were able to show positive local savings and, in doing so, added some strength back to our balance sheet. Total assets decreased to $240 million, down from $354 million in the previous year. That is a result of considerably less grain on hand on February 28, 2023, which resulted in lower grain inventory values. Net fixed assets again decreased as a result of a conservative fixed asset policy.

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Our liabilities, relative to the financing of your cooperative, consist of an operating line of credit and term debt with CoBank, along with some capital leases for fertilizer application equipment. We continued to see large balances in our grain contract liabilities and the money you entrusted us with for your spring 2023 crop inputs.

MEMBERS’ EQUITY

The members’ equity statement represents your ownership in Ag Valley Co-op. The amount of investment that our members and owners have in Ag Valley Co-op increased over the previous year. The Ag Valley Board continues to evaluate the need to pay back deferred equity and provide you with a return on your business with Ag Valley Co-op in the form of patronage refunds. We were able to do both this year!

Changes In Financial Position

As of February 28, 2023, Ag Valley Coop had a strong working capital position. As we move into 2023–24, that will be an essential factor in achieving our goals relative to future capital improvements and a strong equity retirement and cash patronage program.

FINANCIALS: THE UPSHOT COMMUNITY SUPPORT

Patronage Net Savings $2.0M $6.8M 14 LOCATIONS

4,760 EMPLOYEES MEMBERS 180

$240K FOR LOCAL SUPPORT $885K PROPERTY TAXES

$19M PATRONAGE SINCE 2002