Release date: 3/31/2014
Lexington, KY - Central Kentucky Ag Credit is in the process of distributing over $2.9 million to borrowers throughout 17 central Kentucky counties.
Ag Credit’s Board of Directors authorized the patronage and distribution of funds started in mid-March and will continue in April.
The money is being paid as a result of the cooperative’s record earnings in 2013.
According to Jim Caldwell, President and CEO, Ag Credit had net income of $10.45 million in 2013, eclipsing the $10 million mark for the first time in its 80-year history.
Over 2,000 Ag Credit member-borrowers will benefit from the $2.9 million distribution that is currently underway. In a special letter to member-borrowers, Caldwell said “when Ag Credit returns our profits to you, it reduces your cost of borrowing … our unique cooperative business structure puts money in your pocket.”
When discussing the patronage distribution during the recent Ag Credit Annual Meeting, Jim Caldwell said the first patronage was paid to borrowers in 1943 and the average amount received by borrowers was $11.81. He said the 2013 patronage distribution averages over $1,400 paid to each member-borrower.
The current patronage distribution of $2.9 million brings the cumulative total of patronage paid to member-borrowers to $16.2 million during the past 17 consecutive years.
Financial Injection by Ag Credit is Economic Boost
The widespread economic impact of Ag Credit’s $2.9 million patronage distribution will influence positive results in the central Kentucky rural economy.
Jim Caldwell explains that earnings success of Ag Credit in 2013 is the result of a combination of factors. Among these are usual and expected factors, such as a favorable interest rate environment and controlled operating expenses.
Favorable earnings also point to the success of the member-owned cooperative business model, said Caldwell. Explaining further, he said “this year’s Ag Credit patronage level is an example of how successful the federated cooperative model can be when we pay attention to core business principles.”
Alvin Lyons, Chairman of the Central Kentucky Ag Credit Board of Directors, said the record-setting 2013 patronage payment comes at a time when central Kentucky farmers and rural residents can put the money to good use.
“The changing farm environment continually requires that farmers reinvest in their farm operations to assure profitability,” Lyons said. As a Scott County farmer himself, Mr. Lyons said farming is currently profitable for good operators, but it is critical to incorporate good practices, with good equipment, and to respond to the need for crop and livestock changes to assure continuing profitability.
“The $2.9 million that Ag Credit is returning to the central Kentucky economy is a major financial boost in the Bluegrass Region,” said Chairman Lyons.
The Annual Report for Central Kentucky Ag Credit is available by contacting the Ag Credit Administrative Office at 640 South Broadway, P.O. Box 1290, Lexington, KY 40588, Phone 859-253-3249, email randerson@AgCreditOnline.com. Financial information is also available on the Ag Credit website at www.AgCreditOnline.com.
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