After discussing lasting effects of the pandemic that cause the economy to be ‘unsettled’, Chairman Harless focused on issues primarily related to the rail transportation industry.
Leading up to the pandemic relations between class I railroads and labor unions were already stressed due to the staff reductions related to precision scheduled railroading (PSR) implementation. As the pandemic unfolded, rail freight was reduced, employees were furloughed, and equipment was parked. “Contract negotiations, at a boiling point over PSR implementations, were further complicated when the pandemic amplified staff shortages,” said Harless. As the economy recovered, unions threatened strikes that could have caused severe harm to the economy. A tentative agreement was reached in September and imposed on Class I railroads and Unions in early December.
Harless stated the rail industry is still not staffed to pre-pandemic levels. Staff shortages coupled with a difficult winter have meant HFCS tanker cars arrived late and were not shipped timely to customers. As a result, the plant had to cut back on production from December to March. “BNSF is still working their way back to the quality of service our plant expects to receive and BNSF expects to provide,” related Harless. He thanked BNSF’s Matt Jensen for his presentation to discuss BNSF’s plans going forward.
Harless then shifted gears to discuss the new partnership in ProGold which appears to be ‘calm and steady’.
“One year ago, we announced that Golden Growers and Cargill had become fifty-fifty owners of the ProGold plant in Wahpeton. That significant event started Golden Growers on a path that holds both possibilities and a promise.”
The possibility is the potential for a long-term joint venture with Cargill. The promise is a set purchase price of Golden Growers share in ProGold for $81 million in late 2026 if a long-term agreement does not occur, explained Harless.
Harless stated that the partnership had been a positive experience with open lines of communication between partners. He highlighted several major capital investments that had occurred to include initial phases of the distributive control system (DCS) conversion, a pre-dryer rebuild, and the germ burner replacement.
“I can say with a level of certainty that the ProGold plant will continue to provide employment and serve our farm community for many years to come.”
“It has been a great honor and privilege to serve on the Golden Growers Board. Thank you for allowing me to serve as your Chairman,” concluded Harless.
2024 Incentive Payments and Agency Fees
/in NewsFor calendar year 2024, Golden Growers will pay $0.05 for Method A bushels delivered directly to the plant and will charge $0.02 for Method B bushels the Cooperative secures and delivers on a member’s behalf.
At $0.05/bushel, the Method A incentive for 2024 is a reduction from 2023 when the Board authorized an incentive payment of $0.10/bushel. The 2023 increase was to avoid dropping below the 25% threshold for Method A pool participation. Falling below the 25% threshold would have resulted in greater income being allocated to the Method A pool compared to the Method B pool.
The board believed that the $200,000 cost for increasing the Method A incentive payment in 2023 was a better option than potentially greater cost associated with the complex task of tracking uneven allocated income.
At our 2023 Annual meeting, members approved a bylaw change reducing the Method A delivery requirement to 15%. This bylaw change removed the concern of uneven allocated income between the Method A and Method B pools for the forseeable future. As a result, the Board has returned to a $0.05/bushel Method A incentive payment for 2023.
2024 ADA Pool Election Decision
Each year, Members have the opportunity to change their method of delivery by submitting a revised Annual Delivery Agreement (ADA). This is your only opportunity to change your method of delivery for the coming year.
You should have already received your Annual Delivery Election letter with the ADA form on the back page. If you intend to change your delivery method, return the form no later than December 10th.
Only members intending to change their delivery method need to respond. Members who deliver directly to the plant through the Method A pool have a $0.07/bushel advantage over members participating in the Method B pool.
In 2023, 27.5% of bushels are to be delivered directly to the plant through the Method A pool.
Method A Delivery Options to Consider
Method A Pool participants are permitted to complete their annual delivery requirements through ‘affiliated persons’. In these circumstances, Cargill may write the check for corn directly to the affiliated person.
Affiliated persons include producers who: 1) have a familial relationship to the Member; 2) Own or Control 50% or has management rights over the Member; 3) Shares farming resources with the Member; 4) Are an entity in which 50% ownership is by an immediate family member(s) of the Member; and 5) Rents land from the Member on which the crop is produced (Tenant).
GGC Board Approves Distribution of $0.14/bushel
/in NewsOn September 14th, the Golden Growers Board of Directors approved a distribution of $2,168,667 or $0.14/Unit to members of record as of October 1, 2023. This distribution retires remaining allocated income for 2021 and a portion of allocated income for 2022. In combination with the February and June distributions, a total of $6,815,811 has been issued to members in 2023.
As you are aware, as of March 1, 2022, Golden Growers Cooperative and Cargill are 50/50 owners of ProGold LLC and a new operating agreement was established. In addition, the lease agreement between ProGold and Cargill was amended to extend through calendar year 2026. The Board’s distribution determination is based on anticipated lease agreement revenue and potential capital investment requirements for Golden Growers should a long-term joint venture be established between Cargill and Golden Growers.GGC.)
With this payment, Golden Growers has issued payments to members totaling $135,295,007 or 251% of original investment in the ProGold plant.
Brett Johnson is Golden Growers new Chairman of the Board
/in NewsAt the conclusion of the Golden Growers Annual Meeting on March 23rd, the Board of Directors elected Brett Johnson as Chairman. Johnson replaces Mark Harless who served as Chair for eight years before retiring from the Board.
Brett Johnson was first elected to the Board in March of 2013. Most recently, Brett served as 1st Vice Chairperson and as Chair of the Audit Committee. Brett farms in partnership with his brother near Mooreton, ND where they raise corn, soybeans, and sunflowers. Mr. Johnson previously served twenty one years as a Township Officer, twelve years on the Wyndmere, ND School Board, and six years on the North Dakota Soybean Council. He holds a Bachelor of Science degree in Agricultural Economics from North Dakota State University.
The Board also elected Matt Hasbargen as Secretary, Larry Vipond as Treasurer, Nicolas Pyle as 1st Vice Chair, and Scott Jetvig as 2nd Vice Chair. Johnson, Hasbargen and Pyle will serve on the ProGold LLC Board of Governors.
Johnson appointed Brady Koehl as Chair of the Finance and Audit Committee, Larry Vipond as Chair of the Personnel and Compensation Committee and Matt Hasbargen Chair of the Strategic Planning Committee.
GGC Board Approves Distribution of $0.14/Unit
/in NewsOn June 15th, the Golden Growers Board of Directors approved a $0.14/Unit distribution of $2,168,667 to members of record as of June 1, 2023.
This distribution will retire a portion of remaining 2021 allocated income. With this distribution, the remaining equity credit balance is $7,982,511 or $0.52/bushel. This balance is useful in determining per Unit basis levels and does not constitute an outstanding obligation for GGC.
The Golden Growers Board reviewed five-year revenue projections related to the current lease agreement and the potential investment requirements of an integrated joint venture with Cargill. The Board concluded that it would be wise to maintain the existing reserve in order to pay for a significant portion of potential capital costs of the JV while maintaining level distributions to members for the next few years.
GGC has issued payments to members totaling $133,126,3440 or 247.6% of the original investment in the ProGold plant.
Estate Planning and Member Transfer Requests
/in NewsQuite often, members or a law firm representing them, contact the Golden Growers office requesting changes related to estate planning. For members requesting these types of ‘private’ transfers, Golden Growers will prepare and mail the paperwork to the member for signature. Below are examples of typical requests related to estate planning.
Transfer membership from individual to joint tenancy to avoid probate
If a member has their interest listed in their name as an individual, and they pass away, their membership interest becomes part of their estate and disposition must be handled through the appropriate legal process. In Joint Tenancy, however, the membership interest owned equally between the joint tenants. If one joint tenant passes away, the membership interest is passed on the remaining joint tenant – eliminating the need for probate.
Transfer from an individual to a trust
Trusts are also useful tools to bypass probate. For instance, the grantor of a revocable trust can place assets into the trust and either manage the trust or have someone else manage it for them. In addition, if the grantor becomes incapacitated for any reason, named trustees can manage the assets without declaring the grantor incompetent. If the grantor recovers he/she can resume duties of managing the trust. Within the trust, a grantor can determine how assets are to be disbursed.
Note: Golden Growers will not list beneficiaries for membership interest, nor do we allow the membership interest to be placed into a retirement plan.
‘Unsettled” Harless outlines lingering effects of the pandemic on rail transportation
/in NewsAfter discussing lasting effects of the pandemic that cause the economy to be ‘unsettled’, Chairman Harless focused on issues primarily related to the rail transportation industry.
Leading up to the pandemic relations between class I railroads and labor unions were already stressed due to the staff reductions related to precision scheduled railroading (PSR) implementation. As the pandemic unfolded, rail freight was reduced, employees were furloughed, and equipment was parked. “Contract negotiations, at a boiling point over PSR implementations, were further complicated when the pandemic amplified staff shortages,” said Harless. As the economy recovered, unions threatened strikes that could have caused severe harm to the economy. A tentative agreement was reached in September and imposed on Class I railroads and Unions in early December.
Harless stated the rail industry is still not staffed to pre-pandemic levels. Staff shortages coupled with a difficult winter have meant HFCS tanker cars arrived late and were not shipped timely to customers. As a result, the plant had to cut back on production from December to March. “BNSF is still working their way back to the quality of service our plant expects to receive and BNSF expects to provide,” related Harless. He thanked BNSF’s Matt Jensen for his presentation to discuss BNSF’s plans going forward.
Harless then shifted gears to discuss the new partnership in ProGold which appears to be ‘calm and steady’.
“One year ago, we announced that Golden Growers and Cargill had become fifty-fifty owners of the ProGold plant in Wahpeton. That significant event started Golden Growers on a path that holds both possibilities and a promise.”
The possibility is the potential for a long-term joint venture with Cargill. The promise is a set purchase price of Golden Growers share in ProGold for $81 million in late 2026 if a long-term agreement does not occur, explained Harless.
Harless stated that the partnership had been a positive experience with open lines of communication between partners. He highlighted several major capital investments that had occurred to include initial phases of the distributive control system (DCS) conversion, a pre-dryer rebuild, and the germ burner replacement.
“I can say with a level of certainty that the ProGold plant will continue to provide employment and serve our farm community for many years to come.”
“It has been a great honor and privilege to serve on the Golden Growers Board. Thank you for allowing me to serve as your Chairman,” concluded Harless.
Matthew Jensen relays BNSF’s challenges and plans going forward
/in NewsDuring his keynote speech to Golden Growers members, Matt Jensen discussed problems the railroad has experienced recently. “Frequent and Extreme winter weather has resulted in slower train speeds, longer car dwell at terminals, the need for additional locomotives, and reduced work productivity.”
BNSF is very experienced with winter conditions. “Winter conditions are tough, but we believe we are better than any railroad in winter operations.” He relayed how they prepare their locomotives and rail cars for seasonal extremes by numerous winterization measures to increase reliability. Jensen explained how winter operations are different. BNSF has proactively winterized over 1,500 locomotives. This includes heated air drains for moisture that can get in air lines and the relocation of locomotive air pipes, so they are less susceptible to freezing. BNSF has also replaced more than 33,000 railcars valve systems and replaced more than 6,300 gaskets between railcars. This will ensure air isn’t allowed to escape the train brake system during extreme cold weather. Railcar values and gaskets need to be replaced and changed to avoid frozen air hoses. And when major snow events occur, it takes crews several days for crews to clear the snow in rail yards so operations can resume.
Jensen relayed BNSF efforts to become fully staffed. “We achieved our hiring goal for 2022 of 3,000 new employees. For 2023, we are planning for 3,000 more.” According to Jensen, half of those hired are for additional train crews. To meet goals, they have enhanced recruiting efforts to include hiring incentives, streamlined applications, and engagement with high schools, colleges, and military communities. Jensen acknowledged that it takes time to get fully staffed. “New hire training for conductors can take up to 15 weeks to complete”
From a North Dakota perspective, BNSF has 1200 employees maintains over 1500 route miles, and ships around 325,000 carloads from the state annually. Over the past ten years, BNSF has invested $1.5 billion into rail assets within the state.
Directors Elected, Amendment Approved, Retired Directors Honored
/in NewsGGC members approved a proposed bylaw amendment to change minimum income to be allocated to Method A pool members from 25% to 15%.
Golden Growers members also elected directors for three-year terms. They include: Brady Koehl, of Hancock, MN as At-Large Director; Nicolas Pyle of Casselton, ND for the Central District; and Richard Bot of Minneota, MN for the South District. David Kragnes of Felton, MN was elected for the North District for a two-year term.
At the 2024 Annual Meeting, directors will be elected for three-year terms for the At-Large, North, and South Director positions. If you have an interest, please contact Scott Stofferahn.
Harless & Johnson Honored
Mark Harless and Chris Johnson retired from the Golden Growers Board at the conclusion of the 2023 Annual Meeting. Harless was first elected in 2011 and served on the Board a total of 12 years. Johnson served twelve years from 2008-2020 and again in 2022 to fill a one-year term. Secretary Matt Hasbargen offered appreciation to both directors.
“Chris has the distinction of having served 13 years, tying the record set by Jason Medhaug,” commented Matt Hasbargen.
“Mark set the record as the longest serving Chair since our cooperative began. Mark dedicated a great deal of time and talent. He led us during two key negotiations including the change in ProGold ownership. Mark set the standard for leadership,” stated Hasbargen.
Guest Speaker, Matthew Jensen, BNSF
/in NewsGolden Growers is pleased to announce Matthew Jensen as our annual meeting guest speaker.
Mr. Jensen is BNSF Railway’s Manager for Agricultural Development within our region.
Changes in management within Class I railroads, effects of the COVID-19 pandemic, supply chain issues, and workforce have combined to cause serious challenges for railways and the industries that rely on them. Matt will address these issues in his presentation at the GGC Annual Meeting.
Golden Growers Annual Meeting, March 23rd
/in NewsPLEASE ATTEND the Golden Growers ANNUAL MEETING, Thursday, March 23rd at the DoubleTree Conference Center, 825 E. Beaton Drive, West Fargo, ND
The Agenda Includes:
– John Hejl, Casselton Fire District Chief
– Angie Johnson. NDSU Ext, Grain Bin Safety
– Pat Pithey, Cargill Corn Merchandising
– 2023 Election Results
– Review of the Financial Statements
– Reports by the Chairman and Executive Vice President