Valued Wilco Member-Owners,
Each year seems to bring a different set of challenges and opportunities for all of us. 2022 was no different. Many say we didn’t have a spring or a fall in 2022. We went straight from winter to summer, then right back to winter in late October. We’ve all endured high general inflation, rapidly increasing financing rates, and marketing challenges on many fronts.
On the positive side, consumer behaviors have mostly normalized since COVID’s fading. The labor situation is showing signs of stabilizing, and farm input prices have come down some from their highs.
Most importantly, we’re happy to report another solid financial year at the annual member meeting this March. Your cooperative’s consolidated balance sheet has further improved over last year, leaving Wilco in the strongest position ever as we close-out 2022. Your Wilco Board of Directors, our management team and Wilco’s over 1100 employees remain aligned toward continuous improvement and strengthening agriculture and rural lifestyle.
Our Farm Store sales grew faster than the industry, by 10.9% over a record 2021. Our margin rates were stressed by inflation as we attempted to be sensitive to retail prices as costs moved up. Our inventories grew more than we planned, similarly to all retailers around the country. All that said our store and backstage teams responded by reworking plans and adapting to the needs of our customers and the business. And we continued to execute our Board directed growth strategy by acquiring and rebranding Wilco’s 25th store in Pasco, Washington last March.
In Wilco Energy we had our busiest year ever in 2022. The price volatility kept the team on their toes responding every day to orders generated by immediate need, and for tank fills driven more from price or supply security reasons. We know the higher prices hurt our members so we worked hard to be sure we’re buying right, managing inventories and offering contracting opportunities to those interested. Propane gallons grew again, by 40% in 2022.
For Wilco’s Hazelnut business, this year was very disappointing for both growers and Hazelnut Growers of Oregon (HGO). The Oregon crop looks similar in volume to 2021, with variations by region and variety. Nuts were generally larger and HGO harvest operations went as planned. The markets took a negative turn last spring as supply increased in nearly all regions and worldwide demand continued sluggish. Kernel buyers were timid all year, buying smaller “spot” orders rather than larger contracts, while working sellers for the lowest price. HGO bid with higher prices early in the year but as we got closer to the new harvest, prices were not firming up and it was clear, all packers would take inventory into the New Year, further pressuring prices. All that equates to disappointing and unsustainably low prices for growers, especially in a year with record high input prices. HGO was impacted by the lower prices also. Clear financial improvement gained from recent equipment investments and processing improvements were offset by the much lower prices and a write down of carry over inventory to the current lower market value. Interest rate increases added additional financial stress. The good news is that our percent of handle grew in the 2022 harvest, and we have a new Division President in place along with a refreshed plan to add further plant efficiencies, and to pursue new marketing channels. This unfortunate year really underlines the importance and urgency for the industry to pursue new domestic channels for hazelnuts, exactly where Wilco members have been investing these last few years.
Our Valley Agronomics partnership continues to work well. All regions including our Western division, formerly Wilco-Winfield, had another successful year. Valley Ag expanded further into eastern Washington, did well managing inventories in a very difficult supply period, and increased net income, including Wilco’s 26% share. We’re proud to be partners with Winfield Solutions, (Land O’ Lakes) and Valley Wide Co-op.
We are again grateful for your member loyalty and know that we must earn your business every day. I assure you that your elected Board of Director’s work very hard to uphold our purpose, and to insist that we make continuous improvement in every part of the cooperative. Because of them you can once again expect significant patronage from 2022 earnings, and another notable revolve distribution this next spring.
President & CEO, Wilco
Video Messages from the Wilco Board At Large Candidates
Video Messages from the Wilco Board District 4 Candidates
Video Messages from the HGO Committee Candidates
Wilco has been serving farmers since 1967. Wilco has a strong commitment to its Core Values and local communities. We strive to be a progressive and innovative cooperative serving our members and customer needs. With Farm Stores, Fuel Delivery, Agronomy Centers and Hazelnut Processing & Marketing, we are here to strengthen agricultural and rural lifestyles.