In March, the National Grain and Feed Association (NGFA) wrote the Surface Transportation Board (STB) to highlight “significant” service disruptions reported by their members.
Corn refiners also identified problems with ‘first mile’ and ‘last mile’ rail service – situations where product is not picked up to be shipped OR product has arrived in a nearby rail yard, but not delivered to its destination.
Roots of rail transportation problems are several. Beginning in 2003, Class I railroads (with the exception of BNSF) began adopting Precision Schedule Railroading (PSR) a operational method focused on maximum asset utilization and return on investment.
Critics (Shippers and Unions) insist that PSR puts investor interests ahead of customer service by slashing expenses for equipment and headcount. They say PSR leads to the loss of redundant capacity and service disruptions caused by severe weather and seasonal surges in shipping.
COVID also impacted the entire shipping industry. Supply chains were disrupted, shipments were dramatically decreased, and railroads parked assets and 12,500 employees were furloughed. When the economy began to improve, furloughed workers were not available making it difficult for railroads to re-deploy power and equipment.
Problems were further exacerbated by failed contract negotiations between Class I railroads and Unions. Salary increases aside, main sticking points focused on quality of life issues. This all came to a head when, with the intervention of the Biden Administration, an early morning tentative agreement averted a national rail strike.
Despite the apparent contract resolution, concerns persist. Customers wait for product to be delivered timely, processors wait for supplies to arrive and stranded cars to be returned, and shippers, in general, hope that we are not experiencing a ‘new normal’ for rail freight service.
2023 Elections coincide with the March 23rd Annual Meeting
/in NewsEnclosed with the notice of Annual Meeting, members have the opportunity to re-elect and elect Directors to serve on the GGC Board of Directors. Ballots may be mailed in the envelopes provided or submitted at the annual meeting.
Current directors up for re-election for 3-year terms are: Brady Koehl, Hancock, MN (At-Large Director) and Rick Bot, Minneota, MN (South District). Board Chair Mark Harless (North District) will reach his term limit and Chris Johnson (Central District) has decided not to run for re-election. We are so thankful for the leadership Mark and Chris have provided to our cooperative.
Due to Bylaw changes approved in 2019, the North District director position will be filled as a 2-year term. The Central district position is for a 3-year term.
David Kragnes submitted a petition to run for the 2-year term for the North District and Nicolas Pyle submitted a petition to run for the 3-year term for the Central District.
In addition to the election of Directors, Members will vote on an amendment to the Golden Growers Bylaws that would reduce the Method A income allocation threshold from 25% to 15%, effective as of January 1, 2023.
More information about candidates for Golden Growers Board of Directors candidates and the proposed Bylaw amendment can be found here:
(Click Link) 2023 GGC Candidate Profiles and Bylaw Amendment Summary
Our accounting firm, Eide Bailly LLC, has agreed to receive and tally the mailed ballots. Having an independent firm receive and count the ballots will give members assurance of election accuracy.
Method A Incentive Doubles to $0.10/bushel for 2023
/in NewsAt their December Meeting, the Board of Directors decided to double the Method A Incentive payment for deliveries to the plant from $0.05 to $0.10/bushel for 2023. This is the incentive provided to members who patronize the plant by delivering corn directly to the plant either by themselves or through an affiliated party.
As a result of this decision, GGC members will be given an extended period of time to change their pool election for 2023.
Given this new information, members who may want to change their delivery method may submit a new Annual Delivery Election form. Members who no longer have their election form, may contact the office (701-281-0468 or scotts@goldengrowers.com) for a replacement or they may download a form from the GGC Website here. Only members who intended to change their delivery method for 2023 needed to respond.
Because this information has come so late in the year, GGC will allow a member to change their election through the end of March 2023. After that deadline, GGC will not able to change a member’s delivery obligation for the year.
Note: If a member changes from Method B to Method A from January through March, any corn delivered prior to the changes may not be able to be assigned to the delivery agreement. Therefore, if a member would like to delivery Method A for 2023, it would be best to submit a new Annual Delivery Agreement prior to any deliveries.
A REMINDER: Method A Pool Participants have Delivery Choices
Provisions of GGC’s Grain Services agreement with Cargill allows members to complete their deliveries through affiliated persons who: 1) Have a familial relationship to the Member; 2) Own or control more than 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; OR Rents land from the Member on which the crop is produced (Tenant). Cargill may pay Affiliated Persons directly for corn delivered on behalf of the Method A member. Incentive payments will be issued to the Method A member, however.
SAVE THE DATE: GGC Annual Meeting Set for THURSDAY, MARCH 23RD
/in NewsGolden Growers Cooperative will hold its Annual Members Meeting on Thursday, March 23rd at the Doubletree Conference Center, 825 E Beaton Drive, West Fargo, ND. Members will have the opportunity to elect Directors to serve on the Golden Growers Board. Current directors up for re-election for 3-year terms are: Richard Bot, Minneota, MN (South District) and Brady Koehl, Hancock, MN (At-Large Director). Chris Johnson, Wahpeton, ND who was elected in 2023 for a 1-year term has chosen not to run for re-election leaving an open seat in the Central District for a 3-year term.
Our Board Chair Mark Harless (North District) will reach his term limit. We offer our deepest appreciation to Mark for his dedication to Golden Growers Cooperative. We especially appreciate his steady leadership serving as Chairman for the past eight years!
Due to the change in Bylaws approved at the 2019 Annual Meeting, the North District director position, vacated by Mark Harless, will be filled as a 2-year term. If you have an interest in serving on the GGC Board, this is an excellent time to consider the idea!
Any member in good standing is eligible to be nominated as an At-Large Director or as a Director in the district where the member is registered. If you are interested and want more information about district elections, visit our website at www.goldengrowers.com or contact us at 701-281-0468 or scotts@goldengrowers.com.
Board Proposes to Amend Bylaws in 2023
/in NewsThe GGC Board of Directors will propose an amendment to the GGC Bylaws which would change the allocation of income between Method A and Method B pools.
Presently, Section 8.2 (c) of the Bylaws requires the allocation of 25% of income to bushels delivered through the Method A pool even if Method A bushels delivered are less than 25%. This situation would result in varying income allocations by year and by bushel for each member of the cooperative. Tracking these varied allocations through distributions to members and through the member K-1 tax forms has been described as a ‘nightmare scenario’ that could cost in excess of $250,000 in increased administrative and accounting costs on an annual basis.
Historically, Method A pool bushels delivered have exceeded the 25% threshold so there was no cause for concern. Lately, however, we have come dangerously close to dropping below the 25% threshold. In response to this situation, the Board: a) increased the Method A incentive payment from $0.05 to $0.10/bushel for 2023; AND b) proposes to reduce the Method A income allocation requirement from 25% to 15%, effective as of January 1, 2023.
Given the change in the Method A Incentive for 2023 and in light of the proposed amendment to the Bylaws, GGC members will be given the opportunity to adjust their Annual Delivery Election for 2023 through the end of March of 2023.
The proposed amendment will be submitted to GGC members along with their ballots to elect Directors for the Board in advance of the 2023 Annual Meeting.
Rail Transportation Continues to Roil Ag Industry
/in NewsIn March, the National Grain and Feed Association (NGFA) wrote the Surface Transportation Board (STB) to highlight “significant” service disruptions reported by their members.
Corn refiners also identified problems with ‘first mile’ and ‘last mile’ rail service – situations where product is not picked up to be shipped OR product has arrived in a nearby rail yard, but not delivered to its destination.
Roots of rail transportation problems are several. Beginning in 2003, Class I railroads (with the exception of BNSF) began adopting Precision Schedule Railroading (PSR) a operational method focused on maximum asset utilization and return on investment.
Critics (Shippers and Unions) insist that PSR puts investor interests ahead of customer service by slashing expenses for equipment and headcount. They say PSR leads to the loss of redundant capacity and service disruptions caused by severe weather and seasonal surges in shipping.
COVID also impacted the entire shipping industry. Supply chains were disrupted, shipments were dramatically decreased, and railroads parked assets and 12,500 employees were furloughed. When the economy began to improve, furloughed workers were not available making it difficult for railroads to re-deploy power and equipment.
Problems were further exacerbated by failed contract negotiations between Class I railroads and Unions. Salary increases aside, main sticking points focused on quality of life issues. This all came to a head when, with the intervention of the Biden Administration, an early morning tentative agreement averted a national rail strike.
Despite the apparent contract resolution, concerns persist. Customers wait for product to be delivered timely, processors wait for supplies to arrive and stranded cars to be returned, and shippers, in general, hope that we are not experiencing a ‘new normal’ for rail freight service.
2023 Incentives, & Fees Set, Pool Election Decision
/in News2023 Incentive Payments & Agency Fees
Incentive Payments and Agency Fees for Method A and Method B Pool participation will remain the same for 2023. That means 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.
2023 Annual Delivery Agreement Pool Election
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 2022, 27% of bushels were delivered by members directly to the plant.
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 $0.14/bushel October Distribution
/in NewsOn September 15th, 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, 2022. 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 $6,041,286 has been issued to members in 2022.
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 $138,479,196 or 238% of original investment in the ProGold plant.
Direct Deposit Participation Required in 2023
/in NewsAt their September meeting, the GGC Board reaffirmed their decision to require Direct Deposit participation starting in 2023. (Current Participation – 94.3%)
If a member is not enrolled, their payment will be considered an account payable that will be settled when a member enrolls. Therefore, to receive distribution payments in 2023, a member MUST be enrolled in Direct Deposit.
Questions and Answers about Direct Deposit (ACH)
Q. What happens when I change bank accounts?
A. If you change bank accounts, just write a note to Golden Growers to inform us of the change, attach a new void check or deposit slip, and sign the request. If it is a joint account, please have all members sign the request. You may also download a new Direct Deposit form the GGC website, complete it and mail it to our office. If you change banks and forget to notify GGC, your payment will be returned to GGC and we will issue you a paper check with a new form to complete and return to our office.
Q. How will I know when GGC issues a payment?
A. GGC mails a letter to our Direct Deposit participants at the time of payment to inform members that the deposit was issued. The letter requests members to check their account and report any concerns that might arise.
Q. Is Direct Deposit secure?
A. The ACH system (working closely with the Federal Reserve, U.S. Treasury) is one of the most secure payment systems anywhere. Every payment has a tracking history to identify EXACTLY where the payment originated and where it was deposited. Member data is entered on Agvance software residing on a highly secure private virtual server hosted by Amazon Web Services (AWS). Access to GGC’s information in Agvance is limited to one person at GGC two individuals at Eide Bailly through Remote Desktop Protocol (RDP) using multiple security features and passwords.
Natural Gas Expansion Project On Schedule
/in NewsOn May 27th WBI Energy (MDU Resources Group company) filed a NGA Section 7 application with the Federal Energy Regulatory Commission (FERC). WBI’s filing requests authorization to construct, modify, operate and maintain facilities for its proposed Wahpeton Expansion Project.
FERC is anticipated to issue a Draft Environmental Impact Statement (EIS) in September with a Final EIS anticipated in January. Late in 2021 WBI conducted public open houses in Wahpeton and Kindred to explain the project. The 60.5 mile 12-inch pipeline will originate at the Mapleton compressor station and deliver 20.6 million cubic feet of natural gas to the Kindred and Wahpeton communities.
This project, which is vital to ProGold’s future, remains on track with an anticipated completion date of November 2024. Additional information may be found at: https://www.wbienergy.com/projects/wahpeton/.
GGC Board Approves Distribution of $0.14/Unit
/in NewsOn June 16th, the Golden Growers Board of Directors approved a $0.14/Unit distribution of $2,013,762 to members of record as of June 1, 2022.
This distribution will retire a portion of remaining 2019 and 2020 allocated income. With this distribution, the remaining equity credit balance is $6,505,452 or $0.42/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 $126,310,529 or 234% of the original investment in the ProGold plant.