December 2014 - United Farmers Mercantile Cooperative

UNITED FARMERS MERCANTILE COOPERATIVE
www.ufmcoop.com
“UNITED TO SERVE YOU BETTER”
UNITED FARMERS MERCANTILE COOPERATIVE
“UNITED TO SERVE YOU BETTER”
informer
December 2014
Remaining Relevant
By John Pruss, general manager
•
•
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Red Oak
•
Stanton
•
712.623.5453
712.829.2117
Farragut •
712.385.8176
S
henandoah
•
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712.246.2474
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•
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Villisca
712.826.2232
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Corning
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Essex
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641.322.4310
712.379.5453
We’ve closed the books on
another successful fiscal year.
Not only does your cooperative
have more than $11.5 million of
working capital, but we’re revolving
more than $600,000 in deferred
patronage. Be sure to join us at the
annual meeting in Red Oak on Jan. 12, when we’ll
distribute checks.
Sales volumes continued to grow in fiscal year
2014 in most product lines at United Farmers
Mercantile Cooperative (UFMC). The decrease in
sales shown on our statement of savings was mainly
attributed to lower grain prices.
I’m also pleased that our capital expenditures in
the past year helped us serve you better. We saw
a sizable increase in soybean receipts this fall and
heard a lot of positive comments about the speed
and efficiency of the new 600,000-bushel bin at
Villisca.
New destination markets =
competitive bids
Investments like this reflect our focus on understanding your needs, providing solutions, and
remaining relevant. This commitment includes
working with the Burlington Northern railroad,
which remains a key business partner for your
cooperative.
We recently met with representatives from
the railroad to learn more about the Burlington
Northern’s efforts to develop more destination
markets, which will help us offer you more competitive bids. Being part of this system has kept UFMC
relevant.
Thanks for your continued support of UFMC.
We look forward to serving you in 2015. ◗
UFMC Fiscal Year Results
2014
2013
Sales
$167,752,099 $179,351,875
Operating savings $2,023,807$2,543,128
Net savings
$4,471,974$5,225,047
Patronage Dividend Rates
Grain4.07¢
Feed10.69%
Agronomy4.64%
Lumber and hardware
4.56%
Refined fuels
7.56¢
Petroleum merchandise
7.74%
You’re invited to UFMC’s annual meeting on Jan. 12, 2015,
at the Gold Fair building in Red Oak. Watch for more details.
SERVING SOUTHWEST IOWA
Big Corn Carryout Creates Challenges
By K.C. Nash, grain department manager
While the latest U.S.
Department of
Agriculture (USDA)
crop report didn’t create
many jolts in the soybean market, the corn
numbers were surprising.
The national average corn yield was
pegged at 173.4 bushels per acre, down
from the 174. 2 bushels estimated in
October. Output totaled 14.407 billion bushels, compared to the October
estimate of 14.475 billion bushels. While
these numbers weren’t wildly bullish,
they certainly helped the market. Could
they indicate that the market bottomed
out in early October? Time will tell.
The bigger story is that there is still a
2-billion-bushel carryout projected for
the 2015 crop marketing year, which
ends Aug. 31. If realized, this would be
the highest corn carryout since 2005.
This is significant, because this marks
the first time since the ethanol industry
reached maturity that the corn supply
has caught up with demand. While ethanol demand is relatively stable, it looks
like there might be a slight increase
in feed demand in the months ahead.
Exports will likely be a little weaker than
last year, due to increased competition
from Brazil and Ukraine.
All this means there’s excess supply,
and I don’t see a big increase in demand.
While $3 corn should buy more demand,
these shifts don’t happen overnight. Also,
the U.S. dollar has risen sharply in the
last three to four months. It’s typically
tough for commodity markets to rally
when this happens.
Since there’s carry in the market,
keep an eye on the bids in the forward
months. You can use on-farm storage
to your advantage when the market is
bidding out in the forward months,
especially for June and July.
Also, we had issues last year with the
BNSF railroad in Red Oak. It was a challenge to load trains, due to the high cost
of freight. This has changed, so we anticipate better demand from our rail markets,
which helps us be more competitive.
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No shockers on soybeans
On the soybean side, the big crop
means the market is changing from
demand driven to supply driven. The
November 2014 crop report pegged the
national average yield at 47.5, close to
the 47.1 bushels per acre estimated in
October. These record yields are creating
a nearly 4-billion-bushel crop, which is
also a record.
When you look at carryout, what a difference a year makes. Last year’s carryout
was extremely low at 92 million bushels,
which basically meant we were out of
soybeans. Now we’re at a carryout of 450
million bushels, the highest since 2007.
Why did the soybean market rally in
October? This was a short-term situation, triggered by tight supplies coming
into harvest. There were also harvest
delays due to weather, especially in the
eastern Corn Belt. In addition, railroad
backlogs, especially in the eastern Corn
Belt, forced buyers to “double buy”
railcar loads and truckloads to ensure
enough supply.
For the first half of this crop year,
there is still strong demand for soybeans
through about February or March, both
from crushing and exports. After this,
the market demand shifts to South
America as their new-crop comes on. As
of mid-November, there were no major
weather issues affecting the upcoming
South American soybean crop.
How will the soybean market rally
going forward? We need to lower this
supply through increased demand.
Without a weather issue in South
America, I don’t see demand increasing
dramatically. Any pricing opportunities will likely come before February or
March, so keep an eye out for this.
Count on us
As you market your grain, remember
that we offer basis contracts, price-later
contracts, minimum price contracts,
hedge-to-arrive contracts, and deferred
payment contracts.
For more information, contact your
nearest UFMC location, or call me at
712-829-7420 (direct line) or 712-6234953 (Red Oak’s main line). We look
forward to working with you. ◗
Market Movers for
Corn and Soybeans:
• U.S. dollar
• Crude oil prices
• Final U.S. crop yields in January
• South American weather
Coming Soon: New Fertilizer
Plant in Red Oak
There’s more than meets the eye with this bare piece of ground in Red
Oak east of our ammonia site. Dirt work has been completed for our
new 13,000-ton fertilizer plant, which will be built
here next spring. We’ll keep
you updated as this project
takes shape.
©2014 United Farmers Mercantile Cooperative. All Rights Reserved. Published in partnership with VistaComm® (www.VistaComm.com).
Managing Risk
in an Uncertain
Environment
What the Hay?
If you drove by our Red Oak
office this fall, you probably saw our
entry for the hay bale art contest
sponsored by the local Chamber of
Commerce. More than 20 businesses, home owners, and youth
could decorate a bale however they
wished. The community voted on
their favorites to determine the
winners, who received beef gift
certificates and chamber bucks that
can be spent at Red Oak businesses. This was the first year for this
contest, which offered a fun way
for United Farmers Mercantile
Cooperative to support the local
community.
Wish you could take the guesswork out of
risk management? Advance Trading’s grain
contracts can help.
United Farmers Mercantile Cooperative’s
grain department works closely with Advance
Trading, because they excel at what they do,
especially in the cash market. Their specialists are knowledgeable, and their team
includes an excellent research department.
The Advance Trading team is available to
provide you with personalized service and
customized solutions for your marketing
needs. For more details, call K.C. Nash at
712-829-7420 (direct line) or 712-623-4953
(Red Oak’s main line). ◗
A Minute With Mike
Carlson, Board Secretary
We caught up with Mike Carlson when he delivered a load
of grain to Red Oak this fall to see why he chooses to do business with United Farmers Mercantile Cooperative (UFMC).
What’s your connection to UFMC?
My family has farmed in the Red Oak area for years. My
dad, Dennis, also served on the local co-op board for many
years.
What do you like about farming?
I always knew I wanted to come back and farm. I started
farming full time with my dad in 1989 after I graduated from
Iowa State University with an animal science degree. I like the
rural way of life, because you’re your own boss.
like how UFMC works hard to keep up with the farmers and
invest in more efficient equipment.
What do you enjoy about serving on the
board?
How has UFMC benefited your farming
operation?
I’ve learned a lot during the eight years I’ve been on the
board. It gives you a whole different perspective of how the
entire UFMC system works. In many ways, the co-op is
similar to my farming operation, just on a larger scale. I’ve also
become more aware of what it means to be a member of the
co-op. The business you do with the co-op definitely comes
back to benefit you.
Editor’s note: Mike and his wife, Molly, have two children: their
son, Cole, is 14, and daughter, Jordan, is 11. ◗
I deliver grain to Red Oak because it’s convenient. The
co-op also provides good service and good grain bids. It saves
me time when I don’t have to haul grain to Council Bluffs or
other markets.
Which improvements at UFMC have you
appreciated?
The speed of being able to dump grain is huge. I remember having to wait in line one to two hours back in 2004. I
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What’s Your Soil Telling You?
By Larry Schneipp, Farragut location
Yields in this area were good this fall, which means these crops pulled a lot of nutrients to produce
those bushels. It also means you don’t want to shortchange your 2015 crop’s fertilizer needs.
Soil testing will help you feed your crops right next year. We’ve been busy with soil sampling this fall.
We’re also applying dry fertilizer and lime to area fields. If you haven’t tested your soil for a while or
want us to apply nutrients this fall, weather permitting, contact your local United Farmers Mercantile
Cooperative agronomist. ◗
Outsmart Weeds in 2015
By Kevin Rugaard, agronomy department manager
While yields were
good overall in our
trade territory, and they
were even respectable in
places that were hit by
hail, the story isn’t over
yet. You may face some
major weed challenges
next year, especially in the hailed areas.
The loss of crop canopy in these fields
gave weeds the upper hand. We also saw
some late-season weed escapes due to
the rainfall in August. Although these
weeds weren’t major yield robbers this
year, they could easily become a big
problem going into the next growing
season.
It will take several years to get some
of this cleaned up, so work with your
United Farmers Mercantile Cooperative
(UFMC) agronomist to make a weed
control plan for 2015.
Don’t let soybeans be the
“forgotten crop”
this meant these crops pulled a lot of
nutrients out of the soil. Did you know
200-bushel corn removes 70 pounds of
phosphorus and 55 pounds of potash?
Also, a 60-bushel soybean crop removes 50 pounds of phosphorus and 90
pounds of potash.
Too many times soybeans are the
forgotten crop. We leave them out there
to scavenge nutrients instead of feeding
the crop properly. That’s where your
soil tests come in. We can work with
you on this to help you build a fertilizer
program that fits your 2015 crop’s needs
and your budget.
It’s no secret that fertilizer prices
have been elevated, mainly due to strong
global demand. It’s unclear what prices
will do this spring. If we have an average
fall where we get a lot of tons applied,
prices could drop a little. Depleting the
system this fall could keep prices high,
however.
There is light at the end of the tunnel.
New production facilities will be starting
up soon, including the large new plant
being built in southeast Iowa. More fertilizer supplies should help the pricing
situation by next fall.
Fungicides pay off
While feeding your crop properly
is vital, it’s also important to protect it
against disease. We had challenges in
our area this year with northern leaf
blight in corn and various diseases in
soybeans.
Overall, growers saw good results
with fungicides this year. The 5- to
8-bushel boosts on soybeans and 20- to
30-bushel bumps on corn definitely
covered the cost of application.
We’re planning to host some winter
meetings on field trials we conducted
locally with fungicides, starter fertilizers,
and foliar nutrients that can potentially
boost your bottom line. Watch for more
details. ◗
If you harvested big yields,
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I Didn’t Know You Had That!
By Mark McCaffrey, retail manager
You probably know that the United
Farmers Mercantile Cooperative (UFMC)
Country Store in Red Oak has all the basics
you’d expect a good hardware store to stock,
like lumber, paint, fasteners, and tools. With
more than 15,000 items in the Building
Center alone, however, I bet there are some useful items you didn’t know we carry, including:
• Welding supplies. You’ll find welding rods, welding helmets, and many other arc and MIG welding tools and
supplies from K-T Industries, Inc., which is known for
exceptional quality.
• Water heaters. Our efficient water heaters from U.S.
Craftmaster® are price competitive and American made. We
stock 40-gallon propane, natural gas, and electric units.
• Tile of all types. Add beauty to your living space with
decorative tile from Florida Tile, Inc. Visit our kitchen
showroom to view the full line of porcelain, ceramic, natural
stone, glass, and other beautiful tiles. Tile is one of the
hottest design trends, and we can help you create the perfect
look for your home.
• Storm doors. We’re proud to offer durable EMCO® storm
doors, which are made in Des Moines. These high-quality
storm doors are available in a variety of attractive styles
and options. They are also backed by Andersen® Windows,
which owns EMCO.
For more information about any of these products, stop by
the store, or give us a call at 712-623-2575, then hit #3. ◗
Beat the Big Chill
Soup’s On!
When you want to warm up with a hot lunch, stop
by our convenience store in Red Oak for a bowl of soup.
Each week we’re featuring a different flavor, including
chili, chicken and noodles, vegetable beef, broccoli cheese,
potato soup, and more—all for $2.19 a bowl. ◗
By Randy Walter, NAPA store
If you want an uneventful winter with your equipment’s
fuel systems, make sure you change the filters now to
eliminate any water issues in the filters.
Also, while cold-flow additives have their place, remember that the fuel has to be 10 degrees above the cloud
point for these additives to blend in properly. The cloud
point for diesel is 14 degrees. If you don’t pay attention
to the cloud point and the mercury drops, your cold-flow
additive itself will plug the filter.
What’s the most reliable way to make sure you don’t
have gelling issues with your fuel? Add #1 diesel. ◗
UFMC’s Red Oak convenience store is open:
Monday through Friday
5 a.m. to 10 p.m.
Saturday and Sunday
6 a.m. to 10 p.m.
Phone: 712-829-7402
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UNITED FARMERS MERCANTILE COOPERATIVE
PRSRT STD
U.S. POSTAGE
PAID
“UNITED TO SERVE YOU BETTER”
VISTACOMM
UNITED FARMERS MERCANTILE COOPERATIVE
203 West Oak Street
Red Oak, IA 51566-1432
“UNITED TO SERVE YOU BETTER”
Farmers appreciated the
speed and efficiency
of the new
600,000-bushel
bin at Villisca.
What Did the 2014 Plots Say?
By Stephen Eschenbach, seed agronomist
Conducting research
always challenges your
thinking, because some
things work out like
you want them to, while
others don’t. This has
certainly been true this
year as we collected and analyzed data
from our research plots.
We work with local growers to test
starter fertilizer, narrow versus wide rows
on corn, foliar feeding, yield trials on
Roundup Ready® versus Liberty Link®
versus conventional soybeans, as well
as our usual hybrid/variety testing. It’s
part of our commitment to help boost
your profit potential by helping you sort
through what does and doesn’t work on
farms in this geography.
We’ll host a winter meeting in
January or February to present our
findings and locate additional farmers
for an expanded research program in
2015. We’re looking for growers who are
interested in working together to test
foliar feeding, fungicide applications,
row spacing, fertilizer products and rates,
soybean cyst nematode seed treatment,
starter fertilizer, and other yield-promoting practices.
Also, plan to attend our 2014 Winter
Answer Plot review meeting on Dec. 15
(9 a.m. to noon) at the Red Coach Inn
in Red Oak for a summary of the 2014
research conducted in our Red Oak Answer Plot®. Answer Plot hybrid/variety
results are also available at
www.answerplot.com.
We appreciate your business and the
opportunity to continue to grow our
businesses together. ◗
2014 Kent Swanson Corn Plot
Planted: 5-7-2014 Harvested: 10-17-14 Planting Population: 34,000
Fungicide at V5 and Tassel. Previous Crop: Corn
Brand
Hybrid
Yield @ 15.5%
Moisture % Test Weight
Croplan®5975VT3P/RIB
235.2
18.3
56.6
Croplan6065SS/RIB
230.9
21.5 47.8
Croplan6265SS/RIB
243
20.2 55.5
Croplan6274SS/RIB
240.9
19.6 56.6
Croplan7087VT2P/RIB
252.8
22.4
55
Croplan6594SS/RIB
246.2
20.7 55.5
Dekalb®61-54SS/RIB
240.5
19.2
58
Dekalb
61-88 VT3P/RIB
242.4
19.0
56.4
Dekalb62-77SS/RIB 239.1
20.4 55.6
Dekalb64-87SS/RIB 244.5
20.2 55.2
Dekalb65-79DG/VT2P/RIB 234.1
22.2
53.8
Dekalb66-40SS/RIB 230.9
22.3 54.4
Wyffels® 6626
226.1
18.956.9
Wyffels 6916
228
19.156.9
Wyffels 7736
251.5
22.054.8
Wyffels 7886
244
20.358.1
Croplan
6065 SS/RIB
231.3
20.0
57.2

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