Manager's Report: 2008 Was A Good Year for CWC

Central Wisconsin Cooperative’s 2008 business year came to close on September 30th. The auditing team has just completed their work and has presented their final audit records to our Board of Directors for approval. Preliminary information indicates that CWC delivered another solid business performance. Sales Revenue grew $21 1/2 million to over 85 million dollars of sales. High commodity prices did contribute to the increase in sales. However, there was true growth through increases on volume of products and services delivered. Although, high commodity prices can have positive influence on sales revenue it also can have a negative influence on gross margin. Example: 10 cents per gallon margin on $2.00/ gallon of gas is 5% gross margin. Whereas, 10 cents per gallon margin on $4.00 gas is 2 1/2 % gross margin, 50% less margin. This example reflects the overall operating environment of CWC this past business year. Even with the erosion of our overall gross margin, CWC operation will provide an acceptable bottom line performance.

Through the success of the 2008 business year the Board of Directors have authorized CWC’s Capital Management Plan to return over $335,000 of cash to members, through the age 77 stock retirement program, revolement of the older stock of the former Marshfield Co-op (to bringing it to the same year as Stratford Co-op), and the cash portion of the 2008 patronage paid.

This financial performance was possible because of you and your business decision to support what is yours “Central Wisconsin Cooperative,” again, thank you. I find it also appropriate to recognize our management and employee team that are committed to: “Serving the customers’ needs”. A strong part of CWC’s vision has been to assemble an employee team to establish a relationship business strategy. We focus strongly on having the right employees in the right positions to serve our patrons and membership. CWC will continue to demonstrate the Golden Rule of Business – and that is – “Treat every customer the way we would like to be treated”. We will listen to our customers feed back; analyze and take consistent action that can be measured. If there is a business process that produces a negative experience for our customers, we will identify and retool to improve customer service.
2008 was a good year for CWC and production agriculture. However, the volatility of commodity markets will continue in 2009. I believe supply and demand, not Wall Street hedge funders, will more heavily influence the 2009 markets.

CWC’s business environment for 2009 will provide opportunities, challenges and change. The business landscape around us is undergoing change as well. Management of your cooperative understands that we must anticipate, direct and make the necessary adjustments in order to achieve short term rewards that will lead into long term success. CWC’s goal, vision and mission are to “Provide our customer owners with quality products and services through courteous and knowledgeable employees while returning profits through our cooperative system.

A reminder that October was Co-op month and your cooperative, CWC, is very proud to be a farmer/producer owned business. CWC is owned and democratically controlled by its membership. Our ownership is made up of members who purchase goods and services from the cooperative; not by outside investors. The members elect a Board of Directors from their peers who in return govern the business affairs of CWC. Profits from the cooperative are returned to members proportionate to their use of the co-op; not to their investment or ownership share. CWC is not motivated by profit alone. CWC exists to serve its members by meeting their needs in supplying and marketing products and services.

I would like to remind members that our Annual Membership meeting will be held at the Belvedere Supper Club in Marshfield on January 14, 2009. We look forward to seeing you there! Another important, upcoming event that deserves mentioning is that CWC has made a business decision to reduce our level of used equipment inventory through an onsite auction sale. The inventory reduction sale is scheduled for December 5, 2008. More details will be available as we get closer to the date. With the information we received from the farm equipment industry, the timing of this sale should align well with the potential opportunities of the 2008 year end buying decisions for our patrons.

In closing, CWC is your business ~ I ask of you to support what you own. Partnering going forward we will embrace the changes that lie ahead and endure the uncertain future.

Wishing you all a safe and successful fall, winter and Holiday Season!
Thank You.
Cooperatively
Frank H. Brenner