Letter to Shareholders

Building Tomorrow Together. Words that we believe have come to represent our commitment to you as your partner in production agriculture. The environment that we are operating in today is challenging and complex. As we continue our mission of serving our committed partnerships, Ag Valley Cooperative is perfectly positioned to help you navigate the risks associated with the volatile marketplace that is dominating our operations.

As I look back at the performance of your cooperative over the past twelve months, I am pleased to report that Ag Valley Co-op has returned to a level of local profitability. That profitability will allow us to pay over $1 million in cash patronage. In addition, we were able to retire over $580,000 of deferred equities, and we spent over $3.2 million on capital assets. When you look at our balance sheet, you will see that we were able to add over $4.0 million in working capital as well. The strong working capital position strengthens your balance sheet and gives us the flexibility to respond to ever-changing market conditions. That flexibility will be invaluable as we strive to serve you and your operations better.

While positive local savings are an improvement from the previous several years, the financial performance of your cooperative is not where it needs to be. The Board and Management team are committed to protecting the balance sheet and making the necessary changes to ensure that Ag Valley Co-op is bringing value to you and your family farm. That includes upgrading facilities and equipment, being competitive with our grain bids, positioning ourselves so that the inputs needed on your farm are competitive in today’s marketplace, and staying in a position to retire deferred equities.

The 2022-23 fiscal year is not off to the best start. Dry weather dominates the headlines, wildfires have ravaged parts of our trade territory, the economy is on unstable ground, and there is a lot of uncertainty in the world. As we think about the issues that are affecting us today, the one thing you can be certain of is the strength and resiliency of the Cooperative business model. The cooperative system was founded to withstand the economic, financial, and global pressures we are faced with today. The seven cooperative principles help guide our business model, and specifically, #5 Education, Training and Information, #6 Cooperation Among Cooperatives, and #7 Concern For Community, all directly address the pressures we are facing together.

I want to thank you for your business this past year. Ag Valley Co-op exists because of you. We are honored that you allow us to be a part of your farming operation and that responsibility is not something we take lightly. You are part of a cooperative system uniquely designed and built to assist you as you feed the world. Collectively, we are stronger and can accomplish great things by Building Tomorrow Together.

Thank you,

Jeff Krejdl

CEO/General Manager

AG VALLEY CO-OP 2022 ANNUAL REPORT | 2