‘Change is Inevitable’ – Chairman’s Annual Report

Chairman Mark Harless opened his remarks by outlining the proposed bylaw amendment and concluded, “In 2009, Golden Growers changed to a MN 308B Cooperative. Members voted to amend our bylaws to accommodate that change. On the ten-year anniversary of that vote, we ask for your support again to amend and update our bylaws.”

Highlighting changes in the corn milling industry, Harless noted that Ingredion closed their Stockton, CA plant citing lower sweetener demand and higher manufacturing costs. “It’s no secret that domestic consumption of HFCS continues to decline. Corn refiners have managed this decline in a variety of ways.” Exports (primarily to Mexico), plant closures, swinging production to ethanol, and using corn sweetener or starch as the feedstock to make other products, have all played a part. “Corn refiners continue to push forward with research to expand these non-sweetener uses,” said Harless.

This summer, several board members toured Cargill’s Blair, NE bio-refinery campus where the refinery supplies feedstock to a growing number of co-located companies to include Natureworks, Novozymes, Corbion, Evonic, and Evolva. “Cargill’s Blair campus is a prime example of how the industry is transitioning away from HFCS production toward innovative products fermented from corn sweetener and starch.”

Harless pivoted to discuss plans to maintain the ProGold plant. He reminded members of the $750,000 annual contribution toward maintaining infrastructure like painting structural steel, repairing roofs, and improving floor coverings. “ProGold is also responsible for major capital improvements that are important to the profitability of the plant AND its long term condition.” He reported that the ProGold board voted to move forward with the replacement of the Distributive Control System (DCS) which functions as the nerve center to control functions throughout the plant. He noted that the legacy vendor is discontinuing support for the 24 year-old system. “This means it will become obsolete very soon. Our plan is to complete replacement of roughly half of the system during the current lease,” stated Harless. Golden Growers present and future reserves are expected to be sufficient to handle these expense and allow for regular distributions to members, he concluded.