The board of directors of Farmward Cooperative announced they have approved the redemption of $3.4 million of patron equity. The board approved the redemption based on Farmward’s strong balance sheet and positive earnings in fiscal year 2017.
The $3.4 million redemption will retire approximately 10 percent of the pre-merger patron equity held by both Harvest Land Cooperative’s and Co-op Country Farmers Elevator’s patrons.
Dave Stuk, Farmward CEO, also sited that a recent cash dividend received from Farmward’s subsidiary company, AgQuest Financial Services, was a contributing factor in the board’s approval of the redemption.
“Unlike most other grain and farm supply cooperatives, Farmward has the opportunity to add to income and financial performance as a result of its diversified business units and revenue sources, such as the income generated by AgQuest,” said Stuk.
Farmward owns 98 percent of AgQuest, a financial services and insurance company that works with farm supply retailers to offer production and equipment financing and leasing, as well as crop and property and casualty insurance to the retailers’ agricultural customers. “Going forward, we anticipate that AgQuest will continue to pay cash dividends to Farmward, which in turn will support Farmward’s equity redemption budget in future years,” said Sadie Reiners, chief financial officer. “This is an important way for members of Farmward to get a return on their investment in AgQuest.” “It is our hope that this equity redemption is seen as one more sign that Farmward will continue to take steps to benefit patrons as we move forward together,” added Board Chairman, Calvin Aarons. “It’s important for our patron-owners, as well as the next generation of farmers, to stay invested in our cooperative, not only with their equity dollars, but with their continued business and loyalty.”