Member Report 2018 - Commercial Agribusiness | UFA Co-operative Ltd.

Member Report 2018 - Commercial Agribusiness

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“We worked hard, listened to our members and continued to IMPROVE OUR PRODUCT AND SERVICE OFFERING IN 2018. We recognize the important relationship we have with our farm and ranch customers, and their loyalty and patronage has seen us through many market cycles, industry challenges and unforgiving weather patterns.”

Kevin Hoppins

Board Chair

Carol Kitchen

President & CEO

In 2018, sales in UFA’s Commercial AgriBusiness showed sustained improvements, returning revenue of $223 million, an increase of 15%, or $28 million, over 2017. Increased sales led to an 8% improvement of Commercial gross margin totalling $27 million. However, lower seed and chemical margins dampened overall margins, dropping to 12.1% from 12.9% in 2017.

Improvements to our vendor rebate programs and local market pricing kept us competitive for our members and customers and helped offset the negative impact that poor weather conditions had on our seed and chemical margins. These programs also helped to maximize both our crop and livestock product margins. As a result, we increased our rebates of cost of goods sold to 13% in 2018, up from 12% in 2017 and 9% in 2016.

Sales in our buildings sector remained strong as we drew on the benefits of investments in our infrastructure as well as upgrades to UFA Ag Depots in Grande Prairie, Olds, Strathmore and the new site in Lloydminster. These facilities provide an expanded agronomy capacity by providing our members and customers convenient access to seed, crop inputs and livestock supplies.

Our livestock business continued to show gains in 2018, both in the cow-calf business and the feedlot sector. With the new antimicrobial resistance legislation in 2018, UFA provided uninterrupted feed supplementation to its feedlot customers through a new company, Microbeef Dispensing Services Inc.

With a keen focus on customer’s needs, our commercial account team continued to see significant improvements in seed sales. The 2018 fall booking season saw a record number of canola bags committed to (for the 2019 growing season) with an increase of over 30% versus the previous year.

Our customer-centered focus led to improvements in sales and margin performance by our Customer Account Managers, building on the momentum in our three-year Action Sales program. Ongoing process enhancements also improved our responsiveness to customers, ensuring farmers could access the crop inputs and products they needed, when and where they needed them.

Patronage on seed.

Paid.

In 2018 ufa expanded its patronage categories to include members' seed purchases.

Feedlot service.

Provided.

WITH ALBERTA’S NEW ANTIMICROBIAL RESISTANCE LEGISLATION IN 2018, UFA PROVIDED UNINTERRUPTED FEED SUPPLEMENTATION TO ITS FEEDLOT CUSTOMERS THROUGH A NEW COMPANY, MICROBEEF DISPENSING SERVICE INC.

On-Farm relationships.

Fostered.

UFA’S NETWORK OF OVER 70 CUSTOMER ACCOUNT MANAGERS PROVIDE TRUSTED ADVICE ON CROP INPUTS, LIVESTOCK, GRAIN STORAGE AND HANDLING AND BUILDING CONSTRUCTION.

AGRONOMY CAPACITY.

EXPANDED.

UFA EXPANDED ITS AGRONOMY OFFER IN THE FOLLOWING COMMUNITIES IN 2018: GRANDE PRAIRIE, LLOYDMINSTER, OLDS AND STRATHMORE.