THE PATH TO TODAY
Apr 06, 2023
It does not feel like it has been three years since I joined the UFC team, but we all have heard the phrase “Time Flies When You’re Having Fun”. I would agree with that phrase for my time spent within the UFC team and I am proud of what the team has accomplished. Although this role is my first formal employment role within the agricultural cooperative system, I’ve been affiliated my entire life, starting with growing up across the tracks from the co-op in Elrosa, MN which is still within the cooperative system. Although growing up in the metropolis of Elrosa (population 205), I found myself out at farms weekly as a kid delivering bags of feed to assist my dad in his role as an independent feed rep. One memory that I’m sure would make the UFC grain team cringe is that the elevator, which was also just across the tracks, would pile corn right on Main Street. My buddies and I would setup ramps and jump our bikes into the pile losing many shoes in the process.
I often get asked why I decided to be an accountant, especially for those that have met me in other avenues of my life that typically do not get associated with the accountant stereo type. Another phrase that was often heard while I was growing up was “there are two guarantees in life; paying taxes and dying.” I came to the conclusion that I should take advantage of at least one of these, people typically need an accountant to help with tax filings so I thought I should be able to find work. What I didn’t realize at the time of going to Winona State earning degrees in accounting and business administration is that the cooperative system would ultimately provide an opportunity for me to combine the experiences of my upbringing, education, and passions all into one role.
Prior to being a full-time accountant at a public accounting firm, I did an internship at a district office for an insurance company. My mom had an agency for this company, so I gained the certifications needed to sell insurance and financial products, but it was the assessment of risk side of the overall company that I experienced during the internship that resonated with me. There are very smart people that study numbers to help set rates and those rates very by class and origin of the people and the property that policies are written to provide coverage. In a nutshell, similar tendencies and actions will more times than not, result in the similar outcomes.
One of the biggest benefits of working within the public accounting field is the exposure to a wide range of business industries, structures, and models. Being in greater Minnesota, the businesses generally have a tie to agriculture in some shape or form. I believe the cooperative structure provides the best platform to support a strong business model and best service the customers and employees alike. One of the main reasons I believe this is that the customers as member owners are dependent on the employees to service them as customers and run the business as member owners. Equally dependent, the employees need the customers business to be employed and need that member business to generate profits to support continuous improvements within the business for future longevity.
The cooperative structure is unique in the fact that each entity can determine its plan for future longevity each year utilizing allocations of equities. Each year, hopefully, profits of the cooperative can be retained and taxed at the cooperative level or be allocated as qualified equity and taxed at the member level. If qualified equity is allocated, any portion not paid in cash at the time of allocation is held for future payout. Each entity also has the ability to determine how and when to make the future payout. UFC’s future payout (revolvement) plan for qualified equity does differ from most of the surrounding cooperatives by being based on the age of the member verses based on year of allocation. UFC’s fiscal year ends on August 31st each year so that date is the cutoff date utilized for UFC’s current revolvement plan. If a member turns 69 prior to August 31st, all qualified equities are paid in the following fiscal year in two installments: local equity typically in December and Regional in April. Another payout occurs when a member turns 79 prior to August 31st. Also, if the member continues to earn qualified equity in years after the age of 79, it is paid out each year.
The cooperative structure has other tools that can be utilized to best plan for future longevity such as Non-qualified equity. UFC has utilized non-qualified allocations in the past but for any questions on those, please give me a call because if you are still reading this now, you wouldn’t be for much longer.
In closing, everyone’s path is different and unique to them just as UFC is different and unique compared to other cooperatives. I appreciate the path that has brought me to UFC and I enjoy learning the paths of all the wonderful people I get to work with everyday.