Page Six 



THE I. A. A. RECORD 



September, 1932 



Farmers* National Has Good Year 



Net Profits in Excess of $1,300,000 Belongs fo the Producers 



How the Farmers National Grain 

 Corp. in the fiscal year ending 

 May 31, 1932 handled in excess of 

 148,000,000 bushels of grain, not in- 

 cluding that purchased from or 

 handled for the Grain Stabilization 

 Corp. and derived net earnings in 

 excess of $1,000,000 after adding a 

 substantial sum to reserves, was 

 revealed at the annual meeting of 

 the co-operative in the Morrison 

 Hotel, Chicago, on August 16. 



In the 15 months ending May 31, 

 or since the last report (the end of 

 . ; - the fiscal 



year was 

 re c e n 1 1 y 

 changed 

 from Feb. 

 28 to May 

 31) net 

 profits of 

 the CO r- 

 por a t i o n 

 were ap- 

 ■ - - : :.- . proximate- 



ly $1,300,000 after reserves. 



Based on the fact that the Illi- 

 nois Grain Corporation furnished 

 approximately one - tenth of the 

 member grain sold through the 

 Farmers National, Illinois grain 

 producers and their elevators af- 

 filiated with this movement have 

 approximately a one -tenth interest 

 in the Farmers National earnings. 



Everything to Gain 



This interest will be reflected in 

 increased stock holdings, higher 

 value of stock now and to be held, 

 and in time cash dividends and 

 patronage refunds. In other words 

 every farmer who sells his grain 

 through the Illinois Grain Corp. 

 either direct or through a member 

 farmers elevator, shares in the 

 ownership of profits made from the 

 sale of that grain. Under the old 

 system of private handling, any 

 profits made are kept by the com- 

 mission man and the owners of 

 terminal storage space. 



Thus the grain producer who 

 sells through his own co-operative 

 agency has everything to gain — 

 since he gets just as much or more 

 for his grain at time of sale — and 

 nothing to lose. 



Merchandising policies of the 

 Farmers National not only have re- 

 turned higher prices to its mem- 

 bers than those paid by its com- 

 petitors, but have placed grain pro- 

 ducers in all areas in a better posi- 

 tion with respect to marketing their 

 own commodities Manager George 

 S. Milnor reported to the stock- 

 holders. ■.: , - - ' ■■:■■■■■ r 



"While we appreciate the great 

 importance of making sufficient 

 profit to establish necessary reserves 

 and meet all of our obligations," 

 Mr. Milnor said, "we also realize 

 that a matter of even greater im- 

 portance is our duty to market 

 producer members' grain efficiently, 

 economically and at better prices, 

 and that duty is one to which we 

 are primarily giving our time and 

 effort. In carrying out this policy 

 we have been instrumental in 

 bringing about material reductions 

 in country elevator handling 

 charges, giving the producer the 

 benefit of a better price, compared 

 to mill or export bids, than would 

 be the case were it not for our op- 

 erations. 



Marketing Efficiently ?-; . • 

 "Further than that, under our 

 policy of selling all grain in the 

 most advantageous domestic or 

 foreign market available at the 

 time of sale, the margin on which 

 we operate; the spread between the 

 price the producer gets and the 

 price the consumer pays, is being, 

 and will be still further reduced by 

 our operations." ; r ; 



Mr. Milnor's report showed that 

 as of May 31, 1932, the corporation 

 had under its control a total of 

 more than 75,000,000 bushels of 

 country and terminal storage space, 

 owned or leased and operated by 

 the Farmers National Warehouse 

 Corporation, subsidiary of the grain 

 corporation. This represents a gain 

 of more than 55,000,000 bushels over 

 the amount of country and terminal 

 storage space at the close of the 

 1931 fiscal year. : ^ v, ^ > .v ; 



Cut Per Bu. Cost - 



"In our warehousing operations," 

 Mr. Milnor said, "we follow regular 

 published rates, which are generally 

 in line with the rates charged for 

 similar services in terminal mar- 

 kets. Our extensive operations, how- 

 ever, have en- 

 abled us to 

 handle a large 

 turnover 

 through our 

 facilities, 

 thereby reduc- 

 ing the per 

 bushel cost to 

 a very 1 o w 

 level. 



"A d e quate 

 handling and 

 ■' : . V storage facil- 

 ities are vital to the effective mar- 

 keting of producers' grain. In the 

 expansion of the corporation's fa- 

 cilities program, however, there has 



/v^ 



been constantly in mind the neces- 

 sity of avoiding the tying up of 

 capital in poorly situated elevator 

 properties. 



"Since the last annual report," 

 Mr. Milnor said, "branch offices or 

 representatives of the corporation 

 have been established at Toledo, 

 and Fostoria, O., Champaign, 111., 

 Des Moines, la., Hutchinson, Salina, 

 and Dodge City, Kan., St. Joseph, 

 Mo., Marshall, Minn., Aberdeen, S. 

 D., Williston, N. D,, and Amarillo, 

 Texas. During the same period of- 

 fices in several of the smaller cities 

 that were no longer needed have 

 been discontinued, these being 

 principally the wire offices of the 

 Updike Grain Company, a sub- 

 sidiary which is being liquidated." 

 c Benefits to grain growers in all 

 areas through national co-operative 

 marketing, were cited by Mr. Mil- 



nor. 



Paid Bank Loans 



The report of Walter I. Beam, 

 vice-president of the Corp., showed 

 that during the fiscal year the Cor- 

 poration completed the liquidation 

 of bank loans, and that for the 

 second year of operation it was en- 

 tirely out of debt to all of its 

 bankers at the same time.- :. ; 



Two outstanding events of the 

 year's operations were the fund- 

 ing of the corporation's $16,000,000 

 debt to the Federal Farm Board, 

 making it payable over a period of 

 10 years, and the adoption and de- 

 velopment of the policy under 

 which the national organization be- 

 comes the single, grain marketing 

 medium of its regional stockholders. 



Mr. Beam reported that banking 

 relations had been quite satisfac- 

 tory. "We have banking connec- 

 tions with about 100 banks," he 

 said, "and our turnover of dollars 

 has run into hundreds of millions. 

 We have tied up in closed banks 

 approximately $4,000. New arrange- 

 ments have been made with cer- 

 tain of our banking connections 

 under the terms of which there has 

 been made available to the corpo- 

 ration for its current uses, substan- 

 tial lines of credit without specific 

 security, for caring for sudden 

 swings of the market, and for fi- 

 nancing grain out of collateral 

 position. Our Kansas City sub- 

 sidiary, Hall-Baker Grain Company, 

 which has heretofore enjoyed a 

 substantial line of unsecured credit, 

 also has had its credit lines re- 

 affirmed, with an increased line 

 from a bank not heretofore a cred- 

 itor. ^. . . , ; ■ . --■-/.■.•:. :::-:: 





