OF OPERATIONS
The following discussion should be read in conjunction with the Cooperative's financial statements, the notes thereto and the other financial data included elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking statements. Such statements are based on assumptions by the Cooperative's management as of the date of this report and are subject to risks and uncertainties, as discussed in the section entitled "Forward Looking Statements." Readers should not place undue reliance on such forward-looking statements.
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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 improved in 2021 compared to 2020. 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
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. The corn marketing operations generate revenue for the
Cooperative equal to the value of the corn that is delivered to
The Cooperative sold approximately 15.5 million bushels of corn on behalf of its
members in each of fiscal 2020 and 2021. The Cooperative recognized corn revenue
of
In fiscal 2021, the Cooperative's members, on the Cooperative's behalf,
delivered to
The Cooperative derived
General and Administrative Expenses
The Cooperative's general and administrative expenses include salaries and
benefits, professional fees and fees paid to our Board of Directors. The general
and administrative expenses for fiscal 2021 were
Other Income
Interest income for the fiscal year ended
Liquidity and Capital Resources
The Cooperative's working capital was
The Cooperative received cash distributions from ProGold totaling
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In fiscal 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
The Cooperative had no long-term debt as of
The Cooperative used operating cash flows of
Management believes that non-cash working capital levels 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.
Critical Accounting Estimates
Management's estimate of the carrying value of the investment in ProGold is based on historical cost plus its pro-rata share of ProGold's net income and additional paid-in capital less distributions received from ProGold.
The Cooperative does not pay out Method A incentive payments or collect Method B
agency fees until the end of its fiscal year. These amounts are accrued
quarterly and then confirmed at the end of the fiscal year. The total annual
Method B agency fee was determinable once the members completed their delivery
method determination prior to
The Cooperative has determined corn revenue and corn expense for Method B
deliveries based on the average quarterly cost per bushel paid by
Recent Accounting Pronouncements
There are no recent accounting pronouncements issued or adopted that have a significant impact to the cooperative.
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