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Co-Op Returns Three Quarters of a Million $

2021 was a record year for stock/equity retirements as Rocky Mountain Supply (RSMI) returned $744,000 to the countryside. In November 2021, RMSI retired $347,000 to patron/members based on their age. 304 individuals with accounts set up with social security numbers and birthdays were issued their equity in full. Then, on Dec. 30, 2021, over 1,200 checks went out the door. These checks totaled about $397,000 based on the year in which the stock was earned. Stock years 1990–1992 were paid in full, and 70% of 1993 stock was retired and mailed out. This second retirement covers all types of accounts—farms, ranches, businesses, etc.

The dual equity retirement plan adopted by the RMSI Board of Directors back in 2018 is really starting to ramp up and is literally paying dividends. The goal of the board is to get more money paid out to the co-op members and shrink that gap between when the equity was earned and eventually retired out in the form of cash. This past year marked a significant advance towards that goal.

There also is an optimistic note regarding regional patronage. No, the regional patronage has not gone up, but RMSI has been able to improve the cash distributions with local savings. Any regional patronage or cash equity retirements that RMSI receives from CHS (Cenex Harvest States) is passed on to members through patronage or retirements. The regional distributions have dwindled for the past several years, due to national agricultural and energy market conditions. RMSI has been able to increase the patronage and equity retirement dividends based on earnings at the local level.

The RMSI board has done an excellent job of balancing the need for replacement assets, and plant remodels/construction, and the return of patronage and stock retirements to the members and the community. The larger investments (remodels, construction projects and acquisitions) are beginning to pay off and show up on the bottom line. The growth has been substantial, and it needs to be in order to cover the incremental expenses that are part of the equation.

As RMSI looks forward, it begins to see the last of the major projects may be completed in 2022, at least for a while. This will foster a culture for more opportunities and more returns through the equity retirement program. Internally, we have discussed trying to narrow the gap to about 15–20 years between when the stock/equity was earned and when it is ultimately paid out. This may be an ambitious goal, but RMSI plans to grow and serve the community’s needs like it did in 2021. The RMSI board and management team will strive to continue sending more and more cash back to you, the owners/members, so you can realize the value of your local cooperative and the positive impact it has on your community.