In Business to Exceed Customer Expectations
About Us
 West Central was incorporated in 1933 in Ralston, Iowa, which is still its
headquarters
 West Central is governed by 9 elected board members and 2 appointed
associate board members
 3,198 Class A Stockholders and 90 Class B Stockholders
 Stockholders have invested $38 Million in the company
 Ownership is determined by volume of business done
 Stock is allocated yearly based on profitability
Annual Operations
 West Central employs 228 people
 Grain – markets 60 million bushels
 Agronomy - Seed, fertilizer and chemicals sales: $18,089,718
 Feed - processes over 128,000 tons
 Soy Processing - processes 7.5 million bushels of soybeans and
processes 65 million pounds of soy oil into methyl esters
Core Values
QUALITY
Providing superior
products and services
PROFESSIONALISM
Employees assisting
customers
CUSTOMER
FOCUS
INNOVATION
Research, new products,
new solutions
INTEGRITY
Honesty, trust,
partnerships
Sales History (millions)
$300.0
$250.0
$253.5
$219.0
$200.0
$187.6
$150.0
$163.7
$169.9
$100.0
$50.0
$0.0
2000
2001
2002
2003
2004
www.westcentral.coop
Sales
57%
Grain
Soy Center
Feed
8%
Agronomy
7%
28%
History of Cash
Returned to Members
$2,000,000
$1,810,101
$1,500,000
$1,586,146
$1,506,314
$1,237,668
$1,000,000
$914,128
$500,000
$0
2000
2001
2002
2003
2004
Board of Directors
Management Team
Most Traditional Cooperatives are built on a
business model that evolved from 1890 to 1920
In that 30 year period 12,000 Farmer
Owned Cooperatives were created
Karl Nolin
The Traditional Agriculture
Cooperative is characterized by:
Open Membership
Growth Financed
by Earnings or Debt
No Market
for Equity
No Supply Control
The Essential Elements
necessary for long-term viability:
Profitability is a Must
Membership Must Remain Interested
Investors Must Want to be Investors
Profitability
Liquidate “Legacy” Locations
Establish Return on Asset Benchmarks
Cooperative’s may be different from
Investor Owned Firms
in having a lower ROA Requirement
Membership Must Remain Interested
The Owners are the Customers
Interest of Cooperative and
Customers Must Align
Function of Cooperative Must Be to
Continually Re-align Goods & Services to
Match the Needs of Customers
Membership Must Remain Interested
Membership Must Remain Interested
Is this any different than any other
form of business?
Membership Must Remain Interested
Farmer Cooperatives usually appeal to a
smaller universe of customers
– its stockholders.
Investors want to be Investors
Cooperatives need a mechanism
to allow certain groups
of investors to exit.
Investors Exit Strategies
1. Aggressive Payout of Estates
2. Significant Classes of Equities have <10 Year Payout
3. Base Capital Plans
4. Preferred Stock with Characteristics that Reflect
Liquidity
a) Payout by Age, i.e. 65
b) Dividend – Voluntary Ownership
c) Non-qualified with Separate Payout Schedule
Public Policy
 FASB 150
 Limit of Return to Capital 8%
 Dividend Allocation Rule
If Traditional Cooperatives are able to:
Remain Profitable
Align the interest of
cooperative and membership
Maintain an Investors Group
that wants to be Investors
Then . . .
I believe there is an opportunity
for traditional cooperatives
to serve a membership base
for years to come.
Are there any questions?
Thank you!