GENEX reports progress, improved outlook for 2018

Member-elected delegates of GENEX attended the cooperative’s annual meeting Jan. 24 in Bloomington, Minnesota. The delegates – dairy and beef cattle producers from across the U.S. – gathered to reflect on the past year’s operational successes and financial results. Discussion also focused on the proposed merger of GENEX parent company Cooperative Resources International (CRI) with Koepon Holding BV, the parent company of Alta Genetics and Valley Ag Software.

Huub te Plate, chief operating officer since August 2017, addressed the member-elected delegates of GENEX highlighting progress made during the 2016-2017 fiscal year. He noted the debut of several new products, programs and services. “A prime example is the Ideal Commercial Cow or ICC$ index for Jerseys. This index is innovation at work. We listened to the desires of our members and customers and took action.”

In collaboration with the CRI International Center for Biotechnology and AgSource, GENEX also released new proprietary health traits for dairy cattle. “Subclinical Ketosis, Metritis, Foot Health, Age at First Calving and Calf Survivability are measurable and heritable traits that have an economic value. These traits are unique to our ICC$ index. In the future, the list of traits like these will continue to grow.”

Te Plate also mentioned the addition of Jetstream Genetics to the cooperative’s sire portfolio, market acceptance of the new RumiLife® CAL24™ nutritional supplement and increased demand for the SCR Heatime® system.

Despite progress in new products and services, the 2017 GENEX financial results were below expectations. Te Plate states, “Domestic dairy marketing had a good year, breaking records for sales and beef unit sales continue to increase, but the strong dollar inhibited international sales during the first six months of the fiscal year. While international sales recovered in the second half of the year, the financial shortfall of the first half was too big to overcome.

“Additionally, the 2017 financials included a one-time write-down of our investment in semen sorting research through MOFA GLOBAL and paydown of debt. With this, however, the stage is set for a profitable 2018; we enter the year with an improved balance sheet.”

John Ruedinger, GENEX board president and dairy producer from Van Dyne, Wisconsin, addressed his fellow cooperative members regarding the proposed merger with Koepon Holding. “The most significant event this year was your board of directors’ unanimous vote to continue merger discussions with Koepon. Your board feels this merger is the most positive way for GENEX to continue to add value to members and customers.

“In the proposed merger, the business model preserves our cooperative principles; yet, it leads to synergies that enable higher innovation levels and better products and services. At the same time, the GENEX employee you are familiar with will still pull into your driveway and GENEX will continue to have members, delegates and a board of directors.”

Currently, the merger is in the business planning and due diligence phase. If these processes are successful and following management recommendations and board approvals, the formal merger will require the support of two-thirds of CRI voting delegates. The delegate vote is expected to take place in May. The merger could then formally occur by early to mid-summer.

In closing, Ruedinger shared what GENEX has become and what it will continue to represent in the future. “We have developed a reputation as an industry leader and innovator. We need to carry this reputation to the next generation of dairy and beef producers, domestically and internationally. In the 88-year history of predecessor cooperative innovation, and the short 25-year history of our parent company CRI, we will always have a cooperative business to be proud of, now and for future generations to come.”