UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
For the quarterly period ended
Commission file number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices)
Telephone Number
(Registrant’s telephone
number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| No [ ] |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
| No [ ] |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer [ ] | Accelerated filer [ ] |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Act).
| YES [ ] |
As of May 13, 2022 the Cooperative had Units issued and outstanding.
GOLDEN GROWERS COOPERATIVE
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GOLDEN GROWERS COOPERATIVE
CONDENSED BALANCE
SHEETS
(In Thousands)
| March 31, 2022 | December 31, 2021 | |||||
| (Unaudited) | (Audited) | |||||
| ASSETS | ||||||
| Current Assets: | ||||||
| Cash and Cash Equivalents | $ | |
$ | |
||
| Short-Term Investments | ||||||
| Other Current Assets | ||||||
| Total Current Assets | ||||||
| Long-Term Investments | ||||||
| Investment in ProGold LLC | ||||||
| Total Assets | $ | |
$ | |
||
| LIABILITIES AND MEMBERS’ EQUITY | ||||||
| Current Liabilities | ||||||
| Accounts Payable | $ | $ | |
|||
| Accrued Liabilities | ||||||
| Total Current Liabilities | ||||||
| Non-Current Liabilites | ||||||
| Members' Equity: | ||||||
| Members’
Equity Membership Units, Authorized Outstanding December 31, 2021 |
||||||
| Accumulated Other Comprehensive Income (Loss) | ||||||
| Total Members’ Equity | ||||||
| Total Liabilities and Members’ Equity | $ | |
$ | |
See Notes to Condensed Financial Statements
1
| GOLDEN GROWERS COOPERATIVE |
| CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
| (In Thousands, Other Than Share and Per-Share Data) |
| (Unaudited) |
| Three Months Ended | ||||||
| March 31, 2022 | March 31, 2021 | |||||
| OPERATIONS | ||||||
| Corn Revenue | $ | |
$ | |
||
| Corn Expense | ( |
) | ( |
) | ||
| Net Income from ProGold LLC | ||||||
| General & Administrative Expenses | ( |
) | ( |
) | ||
| Net Income from Operations | ||||||
| Other Income | ||||||
| Net Income Before Income Tax | $ | |
$ | |
||
| Net Income | $ | |
$ | |
||
| Weighted Average Shares/Units Outstanding | ||||||
| Earnings per Share/Membership Unit | ||||||
| Primary and Fully Diluted | $ | $ | ||||
| Three Months Ended | ||||||
| March 31, 2022 | March 31, 2021 | |||||
| COMPREHENSIVE INCOME | ||||||
| Net Income | $ | |
$ | |
||
| Other Comprehensive Income (Loss), Net | ||||||
| Comprehensive Income | $ | |
$ | |
||
| GOLDEN GROWERS COOPERATIVE |
| STATEMENTS OF CHANGES IN MEMBERS’ EQUITY |
| (In Thousands) |
| (Unaudited) |
| Three Months Ended | ||||||
| March 31, 2022 | March 31, 2021 | |||||
| Changes in Members' Equity | ||||||
| Balance, Beginning of the Period | $ | |
$ | |
||
| Net Income | ||||||
| Pension Liability Adjustment | ||||||
| Distributions to Members | ( |
) | ( |
) | ||
| Balance, End of the Period | $ | |
$ | |
||
See Notes to Condensed Financial Statements
2
| GOLDEN GROWERS COOPERATIVE |
| CONDENSED STATEMENTS OF CASH FLOWS |
| (In Thousands) |
| (Unaudited) |
| Three Months Ended | ||||||
| March 31, 2022 | March 31, 2021 | |||||
| Cash Flows from Operating Activities | ||||||
| Net Income | $ | |
$ | |
||
| Net (Income) from ProGold LLC | ( |
) | ( |
) | ||
| Changes in assets and liabilities | ||||||
| Other Current Assets | ||||||
| Accrued liabilities and payables | ( |
) | ( |
) | ||
| Net Cash Used in Operating Activities | ( |
) | ( |
) | ||
| Cash Flows from Investing Activities | ||||||
| (Purchase) Sale of investments | ( |
) | ||||
| Investment in ProGold LLC | ( |
) | - | |||
| Distribution received from ProGold LLC | ||||||
| Net Cash Provided in Investing Activities | ||||||
| Cash Flows from Financing Activities | ||||||
| Member distributions paid | ( |
) | ( |
) | ||
| Net Cash Used by Financing Activities | ( |
) | ( |
) | ||
| Increase (Decrease) in Cash and Cash Equivalents | ( |
) | ||||
| Cash and Cash Equivalents, Beginning of Year | ||||||
| Cash and Cash Equivalents, End of Period | $ | |
$ | |
||
See Notes to Condensed Financial Statements
3
GOLDEN GROWERS COOPERATIVE
NOTES TO CONDENSED
FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND
2021
NOTE 1 – BASIS OF PRESENTATION
The condensed financial statements of Golden Growers Cooperative (the “Cooperative”) for the three-month period ended March 31, 2022 and 2021 are unaudited and reflect all adjustments consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The condensed financial statements should be read in conjunction with the financial statements and notes thereto, contained in the Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The results of operations for the three-month period ended March 31, 2022 are not necessarily indicative of the results for the entire fiscal year ending December 31, 2022.
NOTE 2 – EXPENSES
The Cooperative contracts with Cargill, Incorporated (“Cargill”) in connection with the
procurement of corn and other agency services for an annual fee of $
NOTE 3 – PROGOLD LIMITED LIABILITY COMPANY
Prior to March 1, 2022, the Cooperative and American Crystal Sugar Company (“American
Crystal”) held a
| March 31, | December 31, | ||||||||
| (In Thousands) | 2022 | 2021 | 2021 | ||||||
| Current Assets | $ | |
$ | |
$ | |
|||
| Long-Term Assets | |||||||||
| Total Assets | $ | |
$ | |
$ | |
|||
| Current Liabilities | $ | |
$ | |
$ | |
|||
| Long-Term Liabilities | |||||||||
| Total Liabilities | |||||||||
| Members’ Equity | |||||||||
| Total Liabilities and Members’ Equity | $ | |
$ | |
$ | |
|||
| Rent Revenue on Operating Lease | $ | |
$ | |
$ | |
|||
| Expenses | |||||||||
| Net Income | $ | |
$ | |
$ | |
|||
4
NOTE 4 – INVESTMENTS
The Cooperative has determined fair value of its investments based on Level 2 inputs (in thousands):
| March 31, 2022: | Level 1 | Level 2 | Level 3 | Total | ||||||||
| Corporate Bonds - Held to Maturity | $ | — | $ | |
$ | — | $ | |
||||
| Fixed Income Funds - Available for Sale | — | — | ||||||||||
| Money Market & CD’s | — | — | ||||||||||
| $ | — | $ | |
$ | — | $ | |
|||||
| December 31, 2021: | ||||||||||||
| Corporate Bonds - Held to Maturity | $ | — | $ | |
$ | — | $ | |
||||
| Fixed Income Funds - Available for Sale | — | — | ||||||||||
| Money Market & CD’s | — | — | ||||||||||
| $ | — | $ | |
$ | — | $ | |
Maturities are as follows as of March 31, 2022 (in thousands):
| Net Carrying | Fair | |||||
| Amount | Value | |||||
| Due in 1 year or less | $ | |
$ | |
||
| Due in 2 to 5 years | ||||||
| Greater than 5 years | ||||||
| $ | |
$ | |
The Coopertive’s investments are as follows as of March 31, 2022 and December 31, 2021 (in thousands):
| Amortized | Unrealized | Unrealized | ||||||||||
| Cost | Gains | Losses | Fair Value | |||||||||
| March 31, 2022: | ||||||||||||
| Corporate Bonds - Held to Maturity | $ | |
$ | |
$ | ( |
) | $ | |
|||
| Fixed Income Funds - Available for Sale | — | — | ||||||||||
| Money Market & CD’s | — | — | ||||||||||
| $ | |
$ | |
$ | ( |
) | $ | |
||||
| December 31, 2021: | ||||||||||||
| Corporate Bonds - Held to Maturity | $ | |
$ | |
$ | ( |
) | $ | |
|||
| Fixed Income Funds - Available for Sale | — | — | ||||||||||
| Money Market & CD’s | — | — | ||||||||||
| $ | |
$ | |
$ | ( |
) | $ | |
NOTE 5 – EMPLOYEE BENEFIT PLANS
Pension Plan – In December 2012, the Cooperative approved a change to freeze the Cooperative’s defined benefit plan as of January 1, 2013. As a result, no additional benefits will accrue to participants in the plan and no new employees are eligible for the plan.
The plan’s fair value and benefit obligation will vary over
time as a result of changes in market interest rates, the life expectancy of
plan participants, and benefit payments. As of December 31, 2021, the plan had a
total fair value of $
5
For the three month periods ended March 31, 2022 and 2021, the
Cooperative made $
NOTE 6 – REVENUE RECOGNITION
The Cooperative derives revenue from two sources: operations related to the marketing of members’ corn and income derived from the Cooperative’s membership interest in ProGold LLC. The Cooperative recognizes revenue from its corn marketing operations equal to the value of the corn that is delivered to Cargill and certain purchased corn and agency fees paid by members.
Annually, the Cooperative is required to deliver approximately
Members who deliver corn under Method A are paid the market
price or contracted price for their corn at the time of delivery, as well as an
incentive payment of $
Members who elect Method B to deliver corn pay the Cooperative
a $
The Cooperative’s Board of Directors has the discretion to change the member incentive payment, purchased corn and agency fees based on the Cooperative’s corn delivery needs. The Cargill agency fee is also a component of corn expense.
For the three month periods ended March 31, 2022 and 2021, the Cooperative recognized corn revenue of million and million, respectively. Disaggregated revenue for the three month periods ended March 31, 2022 and 2021 is as follows: revenue from Method A deliveries totaled million and million, respectively; and revenue from Method B deliveries totaled million and million, respectively.
NOTE 7 – DISTRIBUTIONS TO MEMBERS
On February 16, 2022, the Cooperative made distributions to its
members totaling $
6
NOTE 8 – LINE OF CREDIT
The Cooperative has a $
NOTE 9 – COMMITMENTS AND CONTINGENCIES
The Cooperative contracts with Cargill in connection with the procurement of corn and other agency services
for an annual fee of $
NOTE 10 – SUBSEQUENT EVENTS
The Cooperative has evaluated events through the date the financial statements were issued for potential recognition or disclosure in the March 31, 2022 financial statements and concluded that no subsequent events have occurred that would require recognition in the March 31, 2022 financial statements.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward Looking Statements
The following discussion and analysis should be read in conjunction with the financial statements and notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes thereto and Item 7, Management’s Discussion and Analysis of Financial Conditions and Results of Operations, included in the Cooperative’s Annual Report Form on 10-K for the fiscal year ended December 31, 2021. This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements include, among others, those statements including the words “expect”, “anticipate”, “believe”, “may” and similar expressions. The Cooperative’s actual results could differ materially from those indicated in the forward-looking statements for many reasons, including events beyond the Cooperative’s control and assumptions that prove to be inaccurate or unfounded. The Cooperative’s actual results or actions could and likely will differ materially from those anticipated in the forward-looking statements for many reasons, including but not limited to: (i) the impact of the Cooperative’s joint ownership interest in ProGold LLC following Cargill’s acquisition of a 50% interest in ProGod LLC; (ii) fluctuations in the market price per bushel of corn; (iii) the continued impact of the novel coronavirus (COVID-19); and (iv) other factors described from time to time in the Cooperative’s Securities and Exchange Commission filings. The Cooperative does not intend to update the forward-looking statements contained in this Quarterly Report on Form 10-Q other than as required by law and qualifies all of its forward-looking statements by these cautionary statements.
Overview
Golden Growers Cooperative is a value-added agricultural cooperative association governed under Minnesota Statutes Chapter 308B owned by 1,489 members in the business of providing value to its members by facilitating their delivery of corn to the corn wet-milling facility owned by ProGold Limited Liability Company (“ProGold LLC”), a Minnesota limited liability company in which the Cooperative and Cargill Incorporated (“Cargill”) each own a 50% membership interest.
Prior to March 1, 2022, the Cooperative and American Crystal Sugary Company (“American Crystal”) owned a 49% interest and 51% in ProGold LLC, respectively. In connection with its interest in ProGold LLC, the Cooperative has the right and obligation to deliver corn to be processed at the wet-mining facility. On April 4, 2017, the Cooperative, Cargill, and American Crystal entered into a Consent Agreement, effective on January 1, 2018 (the “Consent Agreement”), relating to the lease of ProGold LLC’s wet-milling facility to Cargill and the Cooperative’s interest in ProGold LLC. On the same day, Cargill and American Crystal entered into an Option Agreement, effective on January 1, 2018 (the “Option Agreement”), detailing the price, term and other conditions under which American Crystal granted to Cargill an exclusive option (the “Option”) to purchase a 50% interest in ProGold LLC from American Crystal during the first four years of the lease. Under the Consent Agreement, the Cooperative approved and consented to the transfer of the 50% interest in ProGold LLC from American Crystal to Cargill in the event Cargill exercised its option. The Cooperative also secured the right to purchase American Crystal’s remaining 1% interest in ProGold LLC for a base price ranging from $1.7 million to $1.3 million, depending on when Cargill notified American Crystal of its intention to exercise its option. The Cooperative would also be required to pay to American Crystal a capital adjustment in an amount equal to 1% of the portion of costs that had not been paid by Cargill to ProGold LLC through additional rent with respect to certain projects at the facility.
7
Cargill exercised its Option under the Option Agreement to purchase a 50% interest in ProGold LLC from American Crystal. Simultaneously with the exercise of the Option, the Cooperative, pursuant to the Consent Agreement, elected to purchase American Crystal’s remaining 1% interest in ProGold LLC. As a result of these transactions, effective March 1, 2022, the Cooperative and Cargill each own a 50% interest in ProGold LLC.
In connection with the Option exercise, the Cooperative, Cargill and ProGold LLC entered into that certain ProGold Limited Liability Company Agreement (the “Operating Agreement”), effective March 1, 2022, in order to set forth the structure, governance and operation of ProGold LLC according to certain operational principles and other guidelines described in the Consent Agreement. Beginning March 1, 2022, the Cooperative will be allocated 50% of the profits and losses of ProGold LLC and will be entitled to receive 50% of any cash that is distributed to ProGold LLC’s members.
For more information relating to the Cooperative’s ownership interest in ProGold LLC, please refer to Part I, Item 1 of the Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
ProGold LLC leases its corn wet milling facility to Cargill, which uses the facility to process corn into high fructose corn syrup. In connection with the Option exercise, ProGold LLC and Cargill entered into that certain First Amendment to Second Amended and Restated Facility Lease, effective March 1, 2022, which extended the term of the Facility Lease through December 31, 2026. The Cooperative accomplishes its business on behalf of its members through its contractual relationships with all of the parties involved in the ownership and operation of the facility. From an income production perspective, the Cooperative’s membership interest in ProGold LLC is its primary asset that, in addition to giving the Cooperative the right to receive distributions from ProGold LLC, also provides the Cooperative’s members with additional value for the delivery of their corn for processing. Annually, the Cooperative is required to deliver approximately 15,490,480 bushels of corn to Cargill for processing at the ProGold LLC facility.
Any person residing in the United States can own membership units of the Cooperative (“Units”) as long as that person delivers or provides for the delivery of corn for processing at the ProGold LLC facility. Ownership of Units requires members to deliver corn to the Cooperative for processing in proportion to the number of Units each member holds. Currently, 15,490,480 Units are issued and outstanding. The Cooperative’s income and losses are allocated to its members based on the volume of corn they deliver. Subject to certain limitations, as long as a member patronizes the Cooperative by delivering corn equal to the number of Units held by the member, the member will be allocated a corresponding portion of the Cooperative’s income (or loss). In this way, the Cooperative operates on a cooperative basis.
To hold Units, a member is required to execute a Uniform Member Agreement that obligates the member to deliver corn to the Cooperative and an Annual Delivery Agreement by which each member annually elects the member’s method to deliver corn - either Method A or Method B, or a combination of both. Under Method A, a member is required to physically deliver the required bushels of corn to the Cooperative either at the facility or another location designated by the Cooperative. Under Method B, a member appoints the Cooperative as its agent to arrange for the acquisition and delivery of the required bushels of corn on the member’s behalf. The Cooperative appoints Cargill as its agent to arrange for the delivery of the corn by members who elect to deliver corn using Method A, and the Cooperative appoints Cargill as its agent to acquire corn on the Cooperative’s behalf for members who elect to deliver corn using Method B. If a member elects to deliver corn using Method B, the price per bushel the Cooperative pays to the member is equal to the price per bushel paid by Cargill to acquire the corn as its agent. Members who deliver corn under Method A are paid the market price or contracted price for their corn at the time of delivery. Members who deliver corn under Method A receive from the Cooperative an incentive payment of $.05 per bushel on the corn that they deliver while members who elect Method B to deliver corn pay to the Cooperative a $.02 per bushel agency fee for the cost of having the Cooperative deliver corn on their behalf. The incentive payment for Method A deliveries and the agency fee for Method B deliveries are subject to annual adjustment at the sole discretion of the Cooperative’s Board of Directors.
8
While the Cooperative is financially responsible for the various payments to the members for corn, Cargill, serving as the Cooperative’s administrative agent, issues payments to members for corn on the Cooperative’s behalf.
Annually, the Cooperative notifies Cargill of the number of bushels of Method A corn to be delivered by each member who has elected to deliver corn by Method A. Once the Cooperative provides notification to Cargill of the number of bushels of corn, Cargill then confirms the amount of corn with each member and notifies that member with respect to quality specifications, allowances, deductions and premiums to be applicable to that corn. The member with a Method A corn commitment then directly contracts with Cargill for corn delivered by Method A. At the end of each month, Cargill reports the number of Method A bushels delivered and the average daily price paid for corn that Cargill purchased from members on the Cooperative’s behalf. The product of the number of bushels delivered multiplied by the average monthly market price is reported as Method A corn expense. In the event a member who has elected to deliver corn by Method A delivers to Cargill more than its delivery commitment, any corn delivered in excess of that commitment is handled as a direct sale of corn to Cargill. In the event a member who has elected to deliver corn by Method A delivers to Cargill less than its committed amount of corn, the quantity of the shortfall is then purchased and delivered by Cargill on our behalf. The purchase price is equal to the average price reported for Method A corn for the final month of the year. In addition, the Method A member with a shortfall will be charged a purchased corn fee and agency fee determined by the Cooperative’s Board of Directors.
Cargill then purchases the remainder of the corn to be delivered by the Cooperative on behalf of the Method B delivering members at such time and in such quantities as it deems appropriate and in the best interest of the Cooperative and Cargill. The Cooperative notifies Cargill of the number of Method B bushels to be purchased during the quarter. Cargill will certify to the Cooperative that it has purchased the necessary Method B bushels. The price paid will be the weighted average price for Method A corn during the quarter multiplied by the number of Method B bushels. Method B corn revenue will be equal to the price paid.
The Cooperative’s Third Amended and Restated Bylaws (“Bylaws”) establish a Method A delivery pool and a Method B delivery pool. Generally, the Cooperative’s income and/or losses are allocated annually based on the percentage of bushels of corn the members elect to deliver using either Method A or Method B. Regardless of the actual percentage allocation between the members who deliver bushels of corn using Method A or Method B, the Bylaws require the Cooperative to annually allocate at least 25% of its income and/or losses to the Method A pool. The amount of our income and/or losses actually allocated to the Method A pool is a percentage equal to the greater of 25% or the actual percentage of bushels of corn delivered by members using Method A.
For fiscal year 2022, members elected to deliver 27% of their corn by Method A and members elected to deliver 73% of their corn by Method B. This election will result in 27% of the Cooperative’s income and/or losses and 27% of any cash distributions being allocated to the Method A pool in fiscal year 2022, which reflects the actual percentage of corn members elected to deliver using Method A and does not result in reallocation to meet the 25% requirement set forth in the Cooperative’s Bylaws.
Impact of COVID-19
The Cooperative continues to monitor the global outbreak of the novel coronavirus (COVID-19) and its impact on the Cooperative’s results of operations and financial condition. Corn millers are reporting that demand for high fructose corn syrup in food service and entertainment sectors has improved. Starch demand continues to be strong and ethanol demand improved as COVID-19 restrictions were lifted regionally. The ProGold facility currently continues to operate in the ordinary course and the Cooperative’s overall business has not been impacted. Although demand for products from the corn milling sector have stabilized or improved, the Cooperative is unable to predict the impact of COVID-19 on the future operations of the ProGold facility.
Results of Operations
Revenues. The Cooperative derives revenue from two sources: operations related to the marketing of members’ corn and income derived from the Cooperative’s membership interest in ProGold LLC. The corn marketing operations generate revenue for the Cooperative equal to the value of the corn that is delivered to Cargill. The Cooperative recognizes expense equal to this same amount, which results in the corn marketing operations being revenue neutral to the Cooperative, except for revenue from the Method B agency fee and expenses related to the Method A incentive payments and the service fee paid to Cargill.
9
For the three-month period ended March 31, 2022, the Cooperative sold approximately 4.6 million bushels of corn compared to approximately 4.6 million bushels of corn sold during the three-month period ended March 31, 2021. For the three-month period ended March 31, 2022, the members, on the Cooperative’s behalf, delivered to Cargill for processing at the facility approximately 1.8 million bushels of corn using Method A and 2.8 million bushels of corn using Method B. In the same respective periods in 2021, its members, on the Cooperative’s behalf, delivered to Cargill for processing at the facility 1.8 million bushels of corn using Method A and 2.8 million bushels of corn using Method B.
For the three-month period ended March 31, 2022, the Cooperative recognized corn revenue of $30,302,000 compared to $23,501,000 during the same period in 2021, an increase of 29% for the first quarter due primarily to an increase in the price per bushel of corn sold year to date in 2022 compared to 2021. The increase in price of corn was driven by strong demand and the impact of the war in Ukraine’s impact on all commodity prices.
Expenses. The Cooperative recognized corn expense of $30,317,000 and $23,515,000 for the three-month period ended March 31, 2022 and 2021 respectively, an increase of 29% for the first quarter due primarily to an increase in the price per bushel of corn purchased in 2022 compared to 2021.
The Cooperative recognized expense of $15,000 for the three-month period ended March 31, 2022 and 2021 in connection with costs incurred to Cargill related to the Cooperative’s corn marketing operation.
Income from ProGold LLC. The Cooperative derived income from ProGold LLC for the three-month period ended March 31, 2022 and 2021 of $2,796,000 and $1,894,000, respectively, an increase of 48% for the first quarter. The increase is primarily due to an increase in lease revenue related to ProGold’s amended lease agreement with Cargill dated March 1, 2022.
General and Administrative Expenses. The Cooperative’s general and administrative expenses include salaries and benefits, professional fees and fees paid to its Board of Directors. The general and administrative expenses for the three-month period ended March 31, 2022 was $202,000, compared to $147,000 during the same respective period in 2021. The increase in administrative expenses is primarily due to additional consulting and legal expenses associated with the negotiation of ProGold’s amended lease agreement and operating agreement.
Other Income. Interest income for the three-month period ended March 31, 2022 was $27,000 compared to $41,000 during the same period in 2021. The decrease in other income relates to lower interest earning investments.
Liquidity and Capital Resources
The Cooperative’s working capital at March 31, 2022 was $7,836,000 compared to $6,778,000 at March 31, 2021. The increased working capital at the end of the first quarter of 2022 as compared to the same period in 2021 is primarily related to increased distributions received from ProGold LLC. The Cooperative received cash distributions from ProGold LLC totaling $4,303,000 for the three-month period ended March 31, 2022 compared to $1,570,000 for the three-month period ended March 31, 2021.
In fiscal year 2018, the Cooperative invested a portion of its cash reserves in bonds. To ensure that the Cooperative would have access to cash if needed before the maturity of the bonds, the Cooperative also established a $2,000,000 line of credit at a variable interest rate based on the prime rate. The line of credit will terminate on October 16, 2022. The line of credit is secured by the investment management agency account for the Cooperative maintained by Bell Bank. There was no outstanding balance as of March 31, 2022 or December 31, 2021.
The Cooperative had no long-term debt as of March 31, 2022 and March 31, 2021 and used operating cash flows of $168,000 for the three-month period ended March 31, 2022 compared to used operating cash flows of $100,000 for the three-month period ended March 31, 2021. The decrease in operating cash flows for the three-month period ended March 31, 2022 compared to the three-month period ended March 31, 2021 is primarily due to a change in timing of payments.
Management believes that non-cash working capital levels, together with the Cooperative’s cash and cash equivalents, are appropriate in the current business environment and does not expect a significant increase or reduction of non-cash working capital in the next 12 months. Management expects that the Cooperative’s cash and cash equivalents, together with available borrowings under the line of credit, will be sufficient to fund its operations for the foreseeable future, including at least the next twelve months.
10
Significant Accounting Estimates and Policies
The Cooperative generally does not pay out Method A incentive payments or collect Method B agency fees until the end of its fiscal year. The total annual Method B agency fee was determinable once the members completed their delivery method determination prior to January 1, 2022. The quarterly Method B bushel delivery and agency fee revenue is calculated by allocating the portion of the total annual agency fee for that particular quarter or cumulating it for the particular period. The Cooperative tracks Method A corn deliveries throughout the year so it can report the bushels of corn delivered by its members as well as the corresponding Method A incentive fees earned. The final amounts owed by or due to Cargill and/or the Cooperative’s members who elect to deliver using Method A is not calculated until after December 31 in order to account for any failures to deliver or over-deliveries of corn.
The Cooperative’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, of the Notes to the Financial Statements in the Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The Cooperative’s critical accounting estimates are discussed in Item 7, Management’s Discussion and Analysis of Financial Conditions and Results of Operations, in the Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. There have been no other significant changes in the Cooperative’s significant accounting policies or critical accounting estimates since December 31, 2021.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, the Cooperative is not required to provide disclosure pursuant to this item.
Item 4. Controls and Procedures
The Cooperative’s Chief Executive Officer and Chief Financial Officer has reviewed and evaluated the effectiveness of the Cooperative’s disclosure controls and procedures (as defined in Rules 240.13a -15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934) as of March 31, 2022. Based on that review and evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that the Cooperative’s current disclosure controls and procedures, as designed and implemented, are effective and provide reasonable assurance that information relating to the Cooperative required to be disclosed in the reports the Cooperative files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such information is accumulated and communicated to the Cooperative’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
There were no changes in the Cooperative’s internal controls over financial reporting that occurred during the Cooperative’s most recent fiscal quarter that may have materially affected, or are reasonably likely to materially affect, the Cooperative’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
As a smaller reporting company, the Cooperative is not required to provide disclosure pursuant to this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
11
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information.
None.
Item 6. Exhibits
| Exhibit No. | Exhibit Description | |
| 3.2 | Third Amended and Restated Bylaws of Golden Growers Cooperative dated March 24, 2022 is incorporated by reference to Exhibit 3.2 from the Cooperative’s Form 8-K filed March 30, 2022. | |
| 31.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act Rule 17 CFR 13a-14(a) – filed herewith. | |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 – filed herewith. | |
| 101 | The following materials from this report, formatted in XBRL (Extensible Business Reporting Language) are filed herewith: (i) balance sheets, (ii) statements of operations and comprehensive income, (iii) statements of cash flows, and (iv) the notes to the financial statements. |
12
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GOLDEN GROWERS COOPERATIVE | |
| (Registrant) | |
| Date: May 16, 2022 | /s/ Scott Stofferahn |
| Scott Stofferahn | |
| Executive Vice President, | |
| Chief Financial Officer | |
| Duly Authorized Officer |
13
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of Golden Growers Cooperative (the “Company”) for the fiscal quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott Stofferahn, Executive Vice President, serving as Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
| 2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| GOLDEN GROWERS COOPERATIVE | |
| May 16, 2022 | /s/ Scott Stofferahn |
| Scott Stofferahn | |
| Executive Vice President, Chief Executive Officer and | |
| Chief Financial Officer |
Exhibit 31.1
CERTIFICATION PURSUANT TO 17 CFR 240.13(a) -14(a)
(SECTION 302 CERTIFICATION)
I, Scott Stofferahn, certify that:
| 1. |
I have reviewed this quarterly report on Form 10-Q of Golden Growers Cooperative (the registrant); |
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. |
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; | |
| b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) |
disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. |
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s audito rs and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| GOLDEN GROWERS COOPERATIVE | |
| May 16, 2022 | /s/ Scott Stofferahn |
| Scott Stofferahn | |
| Executive Vice President, Chief Executive Officer and | |
| Chief Financial Officer |
CONDENSED BALANCE SHEETS - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Current Assets: | ||
| Cash and Cash Equivalents | $ 4,092 | $ 1,595 |
| Short-Term Investments | 3,716 | 4,290 |
| Other Current Assets | 29 | 255 |
| Total Current Assets | 7,837 | 6,140 |
| Long-Term Investments | 962 | 1,009 |
| Investment in ProGold LLC | 19,385 | 20,803 |
| Total Assets | 28,184 | 27,952 |
| Current Liabilities | ||
| Accounts Payable | 1 | |
| Accrued Liabilities | 1 | 204 |
| Total Current Liabilities | 1 | 205 |
| Non-Current Liabilites | ||
| Members' Equity: | ||
| Members’ Equity Membership Units, Authorized 60,000,000 Units, Issued and Outstanding 15,490,480 as of March 31, 2022 and December 31, 2021 | 28,183 | 27,747 |
| Accumulated Other Comprehensive Income (Loss) | ||
| Total Members’ Equity | 28,183 | 27,747 |
| Total Liabilities and Members’ Equity | $ 28,184 | $ 27,952 |
CONDENSED BALANCE SHEETS (Parenthetical) - shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Membership Units, Authorized | 60,000,000 | 60,000,000 |
| Membership Units, Issued | 15,490,480 | 15,490,480 |
| Membership Units, Outstanding | 15,490,480 | 15,490,480 |
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| OPERATIONS | ||
| Corn Revenue | $ 30,302 | $ 23,501 |
| Corn Expense | (30,317) | (23,515) |
| Net Income from ProGold LLC | 2,796 | 1,894 |
| General & Administrative Expenses | (202) | (147) |
| Net Income from Operations | 2,579 | 1,733 |
| Other Income | 27 | 41 |
| Net Income Before Income Tax | 2,606 | 1,774 |
| Net Income | $ 2,606 | $ 1,774 |
| Weighted Average Shares/Units Outstanding | 15,490,480 | 15,490,480 |
| Earnings per Share/Membership Unit | ||
| Earnings per Share/Membership Unit, Primary | $ 0.17 | $ 0.11 |
| Earnings per Share/Membership Unit, Fully Diluted | $ 0.17 | $ 0.11 |
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| COMPREHENSIVE INCOME | ||
| Net Income | $ 2,606 | $ 1,774 |
| Other Comprehensive Income (Loss), Net | ||
| Comprehensive Income | $ 2,606 | $ 1,774 |
STATEMENTS OF CHANGES IN MEMBERS' EQUITY $ in Thousands |
Common Stock [Member]
USD ($)
|
|---|---|
| Balance, Beginning of the Period at Dec. 31, 2020 | $ 25,758 |
| Changes in Members' Equity | |
| Net Income | 1,774 |
| Pension Liability Adjustment | |
| Distributions to Members | (2,014) |
| Balance, End of the Period at Mar. 31, 2021 | 25,518 |
| Balance, Beginning of the Period at Dec. 31, 2021 | 27,747 |
| Changes in Members' Equity | |
| Net Income | 2,606 |
| Pension Liability Adjustment | |
| Distributions to Members | (2,170) |
| Balance, End of the Period at Mar. 31, 2022 | $ 28,183 |
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| Cash Flows from Operating Activities | ||
| Net Income | $ 2,606 | $ 1,774 |
| Net (Income) from ProGold LLC | (2,796) | (1,894) |
| Changes in assets and liabilities | ||
| Other Current Assets | 226 | 223 |
| Accrued liabilities and payables | (204) | (203) |
| Net Cash Used in Operating Activities | (168) | (100) |
| Cash Flows from Investing Activities | ||
| (Purchase) Sale of investments | 620 | (29) |
| Investment in ProGold LLC | (89) | |
| Distribution received from ProGold LLC | 4,303 | 1,570 |
| Net Cash Provided in Investing Activities | 4,834 | 1,541 |
| Cash Flows from Financing Activities | ||
| Member distributions paid | (2,169) | (2,014) |
| Net Cash Used by Financing Activities | (2,169) | (2,014) |
| Increase (Decrease) in Cash and Cash Equivalents | 2,497 | (573) |
| Cash and Cash Equivalents, Beginning of Year | 1,595 | 3,547 |
| Cash and Cash Equivalents, End of Period | $ 4,092 | $ 2,974 |
BASIS OF PRESENTATION |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION The condensed financial statements of Golden Growers Cooperative (the “Cooperative”) for the three-month period ended March 31, 2022 and 2021 are unaudited and reflect all adjustments consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The condensed financial statements should be read in conjunction with the financial statements and notes thereto, contained in the Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The results of operations for the three-month period ended March 31, 2022 are not necessarily indicative of the results for the entire fiscal year ending December 31, 2022. |
EXPENSES |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Other Income and Expenses [Abstract] | |
| EXPENSES | NOTE 2 – EXPENSES The Cooperative contracts with Cargill, Incorporated (“Cargill”) in connection with the procurement of corn and other agency services for an annual fee of $60,000, which is paid by the Cooperative to Cargill in quarterly 4 installments. The agreements between Cargill and the Cooperative terminate concurrently with Cargill’s Second Amended and Restated Facility Lease with ProGold Limited Liability Company (“ProGold LLC”). Effective March 1, 2022, the term of the Facility Lease was extended through December 31, 2026. |
PROGOLD LIMITED LIABILITY COMPANY |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Progold Limited Liability Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROGOLD LIMITED LIABILITY COMPANY | NOTE 3 – PROGOLD LIMITED LIABILITY COMPANY Prior to March 1, 2022, the Cooperative and American Crystal Sugar Company (“American Crystal”) held a 49% and 51% interest in ProGold LLC, respectively.0% On March 1, 2022, pursuant to an Option Agreement by and between Cargill and American Crystal, and a Consent Agreement by and among the Cooperative, Cargill, and American Crystal, each effective January 1, 2018, Cargill purchased a 50% interest in ProGold LLC from American Crystal, while the Cooperative purchased the remaining 1% of ProGold LLC held by American Crystal. As a result of these transactions, the Cooperative and Cargill each hold a 50% interest in ProGold LLC. Please refer to Part I, Item 2 of this Quarterly Report on Form 10-Q for more information regarding the Cooperative’s ownership interest in ProGold LLC. Following is summary financial information for ProGold LLC, which was derived from the monthly unaudited financial statements of ProGold LLC: 0%
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INVESTMENTS | NOTE 4 – INVESTMENTS The Cooperative has determined fair value of its investments based on Level 2 inputs (in thousands):
Maturities are as follows as of March 31, 2022 (in thousands):
The Coopertive’s investments are as follows as of March 31, 2022 and December 31, 2021 (in thousands):
|
EMPLOYEE BENEFIT PLANS |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Employee Benefit Plans | |
| EMPLOYEE BENEFIT PLANS | NOTE 5 – EMPLOYEE BENEFIT PLANS Pension Plan – In December 2012, the Cooperative approved a change to freeze the Cooperative’s defined benefit plan as of January 1, 2013. As a result, no additional benefits will accrue to participants in the plan and no new employees are eligible for the plan. The plan’s fair value and benefit obligation will vary over time as a result of changes in market interest rates, the life expectancy of plan participants, and benefit payments. As of December 31, 2021, the plan had a total fair value of $910,000 and a benefit obligation of $718,000. For the same period in 2020, the plan had a total fair value of $935,000 and a benefit obligation of $752,000.
For the three month periods ended March 31, 2022 and 2021, the Cooperative made $0 in contributions. The Cooperative does not anticipate making a contribution in 2022. Contributions in 2021 totaled $0. |
REVENUE RECOGNITION |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Revenue from Contract with Customer [Abstract] | |
| REVENUE RECOGNITION | NOTE 6 – REVENUE RECOGNITION The Cooperative derives revenue from two sources: operations related to the marketing of members’ corn and income derived from the Cooperative’s membership interest in ProGold LLC. The Cooperative recognizes revenue from its corn marketing operations equal to the value of the corn that is delivered to Cargill and certain purchased corn and agency fees paid by members. Annually, the Cooperative is required to deliver approximately 15,490,480 bushels of corn to Cargill for processing at the ProGold LLC wet-milling facility. To fulfill that requirement, the Cooperative’s members are contractually obligated to annually deliver corn to the Cooperative by either Method A or Method B or a combination of both. Under Method A, a member is required to physically deliver corn to the Cooperative and under Method B a member appoints the Cooperative as its agent to arrange for the acquisition and delivery of corn on the member’s behalf. The Cooperative contractually appoints Cargill as its agent to arrange for the delivery of the corn by its members who elect to deliver corn using Method A and to acquire corn on its behalf for its members who elect to deliver corn using Method B. In exchange for these services, the Cooperative pays an annual fee of $60,000, paid in 4 quarterly installments. Members who deliver corn under Method A are paid the market price or contracted price for their corn at the time of delivery, as well as an incentive payment of $.05 per bushel. Cargill pays the aggregate purchase price for corn purchased from the Cooperative’s members to the Cooperative and then, on the Cooperative’s behalf, makes individual payments for corn and incentive payments directly to the Cooperative’s members. In the event a member who has elected to deliver corn by Method A delivers to Cargill less than its committed amount of corn, the quantity of the shortfall is then purchased and delivered by Cargill on the Cooperative’s behalf. The purchase price is equal to the average price reported for Method A corn for the final month of the year. In addition, the Method A member with a shortfall will be charged a purchased corn fee and agency fee determined by the Cooperative’s Board of Directors. The aggregate purchase price for corn purchased from the Cooperative’s members, plus any applicable purchased corn fee and agency fee comprise Method A corn revenue. At the end of each month, Cargill reports the number of Method A bushels delivered and the average daily price paid for corn that Cargill purchased from Members on the Cooperative’s behalf. The product of the number of bushels delivered multiplied by the average monthly market price is reported as Method A corn expense. The incentive payment is also a component of Method A corn expense. Members who elect Method B to deliver corn pay the Cooperative a $.02 per bushel agency fee for the cost of having the Cooperative deliver corn on their behalf. Cargill acquires the corn as the Cooperative’s agent. Method B corn revenue will be equal to the price paid by Cargill to acquire the corn from the Cooperative, plus the member agency fee. Corn expense for Method B deliveries will be the weighted average price for Method A corn during the quarter multiplied by the number of Method B bushels purchased during the quarter. The Cooperative’s Board of Directors has the discretion to change the member incentive payment, purchased corn and agency fees based on the Cooperative’s corn delivery needs. The Cargill agency fee is also a component of corn expense. For the three month periods ended March 31, 2022 and 2021, the Cooperative recognized corn revenue of million and million, respectively. Disaggregated revenue for the three month periods ended March 31, 2022 and 2021 is as follows: revenue from Method A deliveries totaled million and million, respectively; and revenue from Method B deliveries totaled million and million, respectively. |
DISTRIBUTIONS TO MEMBERS |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Distributions To Members | |
| DISTRIBUTIONS TO MEMBERS | NOTE 7 – DISTRIBUTIONS TO MEMBERS On February 16, 2022, the Cooperative made distributions to its members totaling $2,168,667, or $0.14 per outstanding membership unit. On February 26, 2021, the Cooperative made distributions to its members totaling $2,013,762 or $0.13 per outstanding membership unit.
|
LINE OF CREDIT |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Line Of Credit | |
| LINE OF CREDIT | NOTE 8 – LINE OF CREDIT The Cooperative has a $2,000,000 line of credit with a variable interest rate. This line of credit matures October 16, 2022. The line of credit is secured by the investment management agency account for the Cooperative maintained by Bell Bank. There is no outstanding balance as of March 31, 2022 or December 31, 2021. |
COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Commitments And Contingencies | |
| COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES The Cooperative contracts with Cargill in connection with the procurement of corn and other agency services for an annual fee of $60,000, which is paid by the Cooperative to Cargill in 4 quarterly installments. The agreements between Cargill and the Cooperative terminate concurrently with Cargill’s Second Amended and Restated Facility Lease with ProGold LLC, as amended, which terminates on December 31, 2026. |
SUBSEQUENT EVENTS |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS The Cooperative has evaluated events through the date the financial statements were issued for potential recognition or disclosure in the March 31, 2022 financial statements and concluded that no subsequent events have occurred that would require recognition in the March 31, 2022 financial statements. |
PROGOLD LIMITED LIABILITY COMPANY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Progold Limited Liability Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Financial Information for ProGold LLC |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value of Investments Held to Maturity Based on Level 2 Inputs |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Investments Held to Maturity |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Bond Maturities |
|
EXPENSES (Details Narrative) |
3 Months Ended |
|---|---|
|
Mar. 31, 2022
USD ($)
Installment
| |
| Other Income and Expenses [Abstract] | |
| Annual Contractual Payments to Cargill to Arrange for Delivery of The Corn and Other Agency Services | $ | $ 60,000 |
| Number Of Installments | Installment | 4 |
| Service Contract Maturity Date Descripsion | Effective March 1, 2022, the term of the Facility Lease was extended through December 31, 2026. |
Schedule of Financial Information for ProGold LLC (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
| Current Assets | $ 7,837 | $ 6,140 | |
| Total Assets | 28,184 | 27,952 | |
| Current Liabilities | 1 | 205 | |
| Long-Term Liabilities | |||
| Total Liabilities and Members’ Equity | 28,184 | 27,952 | |
| ProGold LLC | |||
| Current Assets | 68 | $ 241 | 4,873 |
| Long-Term Assets | 39,317 | 39,958 | 43,320 |
| Total Assets | 39,385 | 40,199 | 48,193 |
| Current Liabilities | 45 | 2,812 | 3,903 |
| Long-Term Liabilities | 2,083 | 1,833 | |
| Total Liabilities | 45 | 4,895 | 5,736 |
| Members’ Equity | 39,340 | 35,304 | 42,457 |
| Total Liabilities and Members’ Equity | 39,385 | 40,199 | 48,193 |
| Rent Revenue on Operating Lease | 6,534 | 4,548 | 21,045 |
| Expenses | 895 | 682 | 3,865 |
| Net Income | $ 5,639 | $ 3,866 | $ 17,180 |
PROGOLD LIMITED LIABILITY COMPANY (Details Narrative) |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Equity Method Investment, Ownership Percentage Prior to Acquisition | 49.00% |
| Option Agreement Description | On March 1, 2022, pursuant to an Option Agreement by and between Cargill and American Crystal, and a Consent Agreement by and among the Cooperative, Cargill, and American Crystal, each effective January 1, 2018, Cargill purchased a 50% interest in ProGold LLC from American Crystal, while the Cooperative purchased the remaining 1% of ProGold LLC held by American Crystal. |
| Equity Method Investment,Ownership Percentage After Acquisition | 50.00% |
| Percentage of Ownership Acquired | 1.00% |
| American Crystal Sugar Company | |
| Equity Method Investment, Ownership Percentage Prior to Acquisition | 51.00% |
| Equity Method Investment,Ownership Percentage After Acquisition | 0.00% |
| Cargill, Inc. | |
| Equity Method Investment, Ownership Percentage Prior to Acquisition | 0.00% |
| Equity Method Investment,Ownership Percentage After Acquisition | 50.00% |
Schedule of Fair Value of Investments Held to Maturity Based on Level 2 Inputs (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Net Investment Income [Line Items] | ||
| Fair Value | $ 4,577 | $ 5,294 |
| Corporate Bond Securities [Member] | ||
| Net Investment Income [Line Items] | ||
| Fair Value | 1,946 | 2,227 |
| Fixed Income Funds [Member] | ||
| Net Investment Income [Line Items] | ||
| Fair Value | 2,533 | 2,619 |
| Money Market Funds [Member] | ||
| Net Investment Income [Line Items] | ||
| Fair Value | 98 | 448 |
| Fair Value, Inputs, Level 2 [Member] | ||
| Net Investment Income [Line Items] | ||
| Fair Value | 4,577 | 5,294 |
| Fair Value, Inputs, Level 2 [Member] | Corporate Bond Securities [Member] | ||
| Net Investment Income [Line Items] | ||
| Fair Value | 1,946 | 2,227 |
| Fair Value, Inputs, Level 2 [Member] | Fixed Income Funds [Member] | ||
| Net Investment Income [Line Items] | ||
| Fair Value | 2,533 | 2,619 |
| Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | ||
| Net Investment Income [Line Items] | ||
| Fair Value | $ 98 | $ 448 |
Schedule of Investments Held to Maturity (Details) $ in Thousands |
Mar. 31, 2022
USD ($)
|
|---|---|
| Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity [Abstract] | |
| Due in 1 year or less | $ 1,085 |
| Due in 2 to 5 years | 847 |
| Greater than 5 years | 115 |
| Total | 2,047 |
| Debt Securities, Held-to-Maturity, Fair Value, Maturity [Abstract] | |
| Due in 1 year or less | 982 |
| Due in 2 to 5 years | 857 |
| Greater than 5 years | 107 |
| Total | $ 1,946 |
Schedule of Bond Maturities (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Summary of Investment Holdings [Line Items] | ||
| Amortized Cost | $ 4,678 | $ 5,299 |
| Unrealized Gains | 26 | 41 |
| Unrealized Losses | (127) | (46) |
| Fair Value | 4,577 | 5,294 |
| Corporate Bond Securities [Member] | ||
| Summary of Investment Holdings [Line Items] | ||
| Amortized Cost | 2,047 | 2,232 |
| Unrealized Gains | 26 | 41 |
| Unrealized Losses | (127) | (46) |
| Fair Value | 1,946 | 2,227 |
| Fixed Income Funds [Member] | ||
| Summary of Investment Holdings [Line Items] | ||
| Amortized Cost | 2,533 | 2,619 |
| Fair Value | 2,533 | 2,619 |
| Money Market Funds [Member] | ||
| Summary of Investment Holdings [Line Items] | ||
| Amortized Cost | 98 | 448 |
| Fair Value | $ 98 | $ 448 |
EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Employee Benefit Plans | ||||
| Fair Value of Plan | $ 910,000 | $ 935,000 | ||
| Amount of Benefit Obligation | 718,000 | $ 752,000 | ||
| Employer Contributions | $ 0 | $ 0 | $ 0 | |
REVENUE RECOGNITION (Details Narrative) |
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2022
USD ($)
bu
Installment
$ / bu
|
Mar. 31, 2021
USD ($)
|
|
| Disaggregation of Revenue [Line Items] | ||
| Annual Delivery of Bushels of Corn | bu | 15,490,480 | |
| Annual Cooperative Fee for Corn Delivery | $ 60,000 | |
| Number Of Installments | Installment | 4 | |
| Incentive Payment Per Bushel to Members on Delivery of Corn under Method A | $ / bu | 0.05 | |
| Agency Fee Per Bushel for Corn Delivered Using Method B | $ / bu | 0.02 | |
| Corn Revenue | $ 30,302,000 | $ 23,501,000 |
| Sales Channel, Directly to Consumer [Member] | ||
| Disaggregation of Revenue [Line Items] | ||
| Total | 11,800,000 | 9,000,000 |
| Sales Channel, Through Intermediary [Member] | ||
| Disaggregation of Revenue [Line Items] | ||
| Total | $ 18,500,000 | $ 14,500,000 |
DISTRIBUTIONS TO MEMBERS (Details Narrative) - USD ($) |
Feb. 16, 2022 |
Feb. 26, 2021 |
|---|---|---|
| Distributions To Members | ||
| Distributions to Members | $ 2,168,667 | $ 2,013,762 |
| Distribution to members per outstanding membership unit | $ 0.14 | $ 0.13 |
LINE OF CREDIT (Details Narrative) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Line Of Credit | ||
| Line Of Credit Maximum Borrowing Capacity | $ 2,000,000 | |
| Line Of Credit | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) |
3 Months Ended |
|---|---|
|
Mar. 31, 2022
USD ($)
Installment
| |
| Commitments And Contingencies | |
| Annual Contractual Payments to Cargill for Procurement of Corn | $ | $ 60,000 |
| Number Of Installments | Installment | 4 |
(9!-4"PKIRZ!(/
M7?(\=."L((H*!_+< WG^OR"K.JWA"F(+F,]!7L RK9$#>>&!O'@>2##+5T4)
M'