Posted 11/23/2021 14:59 (#9336984 - in reply to #9335543) Subject: RE: Fertilizer dilemma
They have to be scared out of their wits of laying in a bunch of high priced product, then have to eat it as the wholesale price erodes. They can always sell it below cost to the co-op members. IMHO if the co-op is always profitable and paying a dividend, they are over charging their members for products and services since that is where the profit comes from. Co-ops are created because there is a need for product/services that are not readily available or competitive for the members, the coop that is always paying a dividend is not really making the product/service market competitive since they are making money. I f the co-op loses money on the fertilizer and does not pay a dividend for a few years, it really is not a big deal; the only time it is a big deal is if the co-op goes broke because of getting upside down in the market.
I hear guys telling me all the time I should do business with such and such co-op since they always pay a good dividend. My question to them is: "Would you pay 15% more at Menards so you could get an 11% rebate?" Most say: "No, the rebate is less than the extra expense." To which I reply: "No different than paying the co-op 10% more to get a 5% dividend." I would rather pay 95% all of the time and occasionally get a dividend vs paying 105% all of the time and always getting a 5% dividend.