Results Driven
Nov 09, 2021
The first Fieldviews article I had the privilege of writing was in the Spring 2020 Edition when I was very new to the UFC team. I spoke of learning the diverse business operations of UFC and its impact on local communities by asking employees, board members and owner members the question “What does UFC mean to you?” In asking that same question today, the answers are significantly different for many reasons, including both internal and external factors.
Prior communications from UFC have used words like adaptability, efficiency, effectiveness, and opportunity; they all still apply to businesses of UFC. However, they have also provided positive financial results when acted upon in the last few years. Still working through the annual audit process currently, UFC’s 2021 fiscal year local savings is expected to be the best since 2016. Overall Savings the best since 2014. Although there is no direct correlation to overall revenue dollars to profitability, 2021 will also be the highest overall revenues for any UFC fiscal year in history. This was possible as a result of each department being able to help one another to capitalize on profitable opportunities. Examples of this would include: if barns are being filled in the winter months, the agronomy team members could help with delivering the additional feed. The grain team aligns the shipment of trains to help bring in cash when it is needed for purchasing propane at the best cost.
The profitability of UFC has a great ripple effect as available cash generated can be utilized where it will have the greatest impact. Reducing interest on borrowed cash had a great impact with paying $1.59 million in interest expense in 2021 versus $2.58 million in 2020 versus $3.66 million in 2019. Aligning inventories and business activities with the current environment, in addition to reduced interest rates, all contributed to this one expense reduction to further improve profitability.
As a cooperative, the profitability is used to support the member owners in many ways such as purchasing more efficient equipment, to allow timely service to members, and provide cash back to the countryside via equity redemptions ($2.5 million in 2021) and patronage ($1 million in cash from 2020 fiscal year). UFC is looking forward to the anticipated 2021 patronage after another strong fiscal year from local savings. There are many ways in which members can aid in cash management and the profitably of UFC. One I want to keep reminding the membership is the utilization of electronic payments. Paying invoices online, as well as receiving ACH payments for grain sales, both increases the speed of processing and reduces the steps of processing.
In closing, I and the whole UFC team want to thank you -the members- for doing business with UFC. We will all continue to improve your experiences with every interaction with UFC and its team. UFC’s financial health and future outlook has continued to improve over the last year, and the focus of the UFC team is to continue on the path going into the 2022 year.
JONATHAN OLMSCHEID
CHIEF FINANCIAL OFFICER
Prior communications from UFC have used words like adaptability, efficiency, effectiveness, and opportunity; they all still apply to businesses of UFC. However, they have also provided positive financial results when acted upon in the last few years. Still working through the annual audit process currently, UFC’s 2021 fiscal year local savings is expected to be the best since 2016. Overall Savings the best since 2014. Although there is no direct correlation to overall revenue dollars to profitability, 2021 will also be the highest overall revenues for any UFC fiscal year in history. This was possible as a result of each department being able to help one another to capitalize on profitable opportunities. Examples of this would include: if barns are being filled in the winter months, the agronomy team members could help with delivering the additional feed. The grain team aligns the shipment of trains to help bring in cash when it is needed for purchasing propane at the best cost.
The profitability of UFC has a great ripple effect as available cash generated can be utilized where it will have the greatest impact. Reducing interest on borrowed cash had a great impact with paying $1.59 million in interest expense in 2021 versus $2.58 million in 2020 versus $3.66 million in 2019. Aligning inventories and business activities with the current environment, in addition to reduced interest rates, all contributed to this one expense reduction to further improve profitability.
As a cooperative, the profitability is used to support the member owners in many ways such as purchasing more efficient equipment, to allow timely service to members, and provide cash back to the countryside via equity redemptions ($2.5 million in 2021) and patronage ($1 million in cash from 2020 fiscal year). UFC is looking forward to the anticipated 2021 patronage after another strong fiscal year from local savings. There are many ways in which members can aid in cash management and the profitably of UFC. One I want to keep reminding the membership is the utilization of electronic payments. Paying invoices online, as well as receiving ACH payments for grain sales, both increases the speed of processing and reduces the steps of processing.
In closing, I and the whole UFC team want to thank you -the members- for doing business with UFC. We will all continue to improve your experiences with every interaction with UFC and its team. UFC’s financial health and future outlook has continued to improve over the last year, and the focus of the UFC team is to continue on the path going into the 2022 year.
JONATHAN OLMSCHEID
CHIEF FINANCIAL OFFICER