October, 1951 



THE I. A. A. RECORD 



Page Seven 





M $5,000,000 Knnual Business 



That^s What 47 Affiliated Co-operative Service 



^^^^^^^^^^^^^^^^^^^^- ■ ; ; Companies Are Now Doing 



I/. R. Marehnnt 



EVERY day of the year more than 

 $15,000 worth of Service Petro- 

 leum Products are distributed to Illinois 

 farmers by the forty-seven service com- 

 panies associated 

 with Illinois Farm 

 Supply Company, 

 Manager L. R. 

 Marchant reported 

 at the annual meet- 

 ing of the c o m - 

 pany, Bloomington, 

 October 14. An 

 annual business of 

 $5,000,000 has set 

 a new mark in this 

 field of agricultural 

 co-operation. 

 The organization began the year with 

 36 member companies, operating 92 oil 

 bulk storage stations and 243 truck 

 tanks. At the close of the period 47 

 companies were in operation with 120 

 bulk stations and 351 trucks. 



Farmers' capital stock investment in 

 the 47 companies and the Farm Supply 

 Company totals $929,772 including the 

 $167,000 worth of stock required to 

 establish the ten new companies. 



The New Companies 



The new companies are located in 

 Champaign, Greene, Iroquois, JoDaviess, 

 Macoupin, Monroe, Randolph, St. Clair, 

 Stephenson and Whiteside counties, 

 Hancock county has the first co-op. 

 oil company organized in Illinois. This 

 company joined the state organization 

 during the year. 



Not more than four distributors of 

 petroleum products in the state rank 

 higher in the sale of gasoline than the 

 Farm Supply Company. Only one ranks 

 higher in the sale of kerosene. 



More than 33,000,000 gallons of 

 petroleum products were handled dur- 

 ing the year. This is the equivalent of 

 about 2,8 50 tank cars of gasoline, 1,186 

 cars of kerosene and distillate, 316 cars 

 of lubricating oil and 26 cars of grease. 

 It represents a gain of 74.7 per cent in 

 gasoline over the previous year, 57.4 per 

 cent in kerosene and distillate, 69.49 per 

 cent in lubricating oils and 58.5 per 

 cent in grease. 



Mr. Marchant pointed out that this 

 gain was not due entirely to the organi- 

 zation of ten new companies. The 

 average gains made by nineteen of the 

 companies over two years old are 3 1 per 

 cent in gasoline, 8.4 per cent in kero- 



sene and 29.9 per cent in lubricating 



oil 



Other products handled during the 

 year were fly spray, stock dip, sulphur- 

 ized mange oil, wood preserver, cod liver 

 oil, automobile tires, alcohol, glycerine, 

 and chemical weed killers. Some of these 

 products have been introduced within 

 the past three or four months. 



Approximately ten carloads, or 

 297,140 pounds, of chemicals were dis- 

 tributed. About 92.72 per cent of this 

 was Atlacide or calcium chlorate. 



The business of the state company 

 for the year was $1,722,210.64 based 

 upon the cost values of merchandise 

 purchased. The net worth of the com- 

 pany according to the official audit was 

 represented by a capital stock invest- 

 ment of $87,897 and a surplus of 

 $42,715.56, which with reserves for 

 dividends total $209,345.06. 



Gross operating income for the year 

 was $130,323.68, an increase of 64.1 

 per cent over last year. Operating ex- 

 penses were $33,604.89, or 25.8 per 

 cent of the gross income, compared 

 with $25,862.3 5, or 32.6 per cent for 

 1930. 



Lowers Production Cost 



On the basis of the paid-in capital 

 stock held by all member companies, the 

 earnings represent a profit of 115.15 per 

 cent on the investment. Capital stock 

 dividends amounting to $5,337.68 and 

 patronage refunds amounting to 

 $73,594.82 have been declared payable. 

 These amount to 60 per cent of the 

 gross income with 15 per cent of the 

 income going into reserve. 



This will be the first year that any 

 organizations other than the share- 

 holders will participate in the earnings 

 of the company. Under the purchaser 

 patron contract, Farm Bureaus and 



other co-operative associations in coun- 

 ties where there are no service com- 

 panies may receive a patronage dividend 

 on purchases at the rate of 50 per cent 

 of the amount received by member com- 

 panies. Fourteen Farm Bureaus will re- 

 ceive refunds this year under this pro- 

 vision. !'; -A' >'.':-:-r '\' •'■'■■ '.:" ',!'■"■■-■ . ,;..;'?:: ■■'' "'' 



Every company organized prior to 

 1931 has paid off the balance due on 

 its note covering stock subscriptions in 

 the Farm Supply Company from pa- 

 tronage dividends. : ; 



The aggregate sum of $156,259 has 

 been paid back to shareholders during 

 the five years the company has operated. 

 This is an annual yield of 76.54 per cent 

 on the investment. The amounts paid 

 annually in dividends on preferred stock 

 and in patronage dividends are as fol- 

 lows: preferred dividends — $233.87 in 

 1927, $1,138.57 in 1928, $1,844.75 in 

 1929, $3,025.77 in 1930, and $5,162.68 

 in 1931; patronage — $1,138.21 in 1927, 

 $11,239.71 in 1928, $20,772.74 in 1929, 

 $38,307.89 in 1930, and $73,394.82 in 

 1931. 



115 Per Cent Profit 



"The future of co-operative pur- 

 chasing in Illinois," said Mr. Marchant, 

 "hinges on the interest taken in the 

 movement and the effort made to de- 

 velop it. The possibilities of large scale 

 operations through the centralization of 

 buying power is a real challenge and an 

 opportunity. Co-operative purchasing 

 offers a definite way to lower produc- 

 tion costs which is more important to- 

 day than at any time in the past decade. 



"For this reason co-operative pur- 

 chasing promises to be of ever-increasing 

 importance. The saving in centralized 

 purchasing is immediately apparent. 

 Many a farmer will be sold on the co- 

 operative idea by this obvious saving 

 and later be made to see the value of 

 co-operative marketing. 



"Instead of 47 companies operating 

 351 truck tanks and serving 60,000 

 farmers, further expansion should result 

 in some 60 companies with facilities for 

 covering the state from end to end and 

 serving not less than 100,000 custodi- 

 ers. It is the duty of every farm organi- 

 zation to do anything that will lend 

 greater dignity to the business of agri- 

 culture and increase the returns of those 

 engaged in it. Illinois Farm Supply 

 Company is already deeply indebted to 

 the Farm Bureau leadership of the state 

 for its support." ; '•- 



