Newsletter | February 2022
Time continues to pass on, regardless of how busy we might feel. My apologies for the tardiness of this newsletter. I hope your Christmas was filled with silent nights and warm fires; your new year celebrations filled with joy, hope, and happiness; and the first few months of the year have been rewarding.
The ethanol industry was extremely profitable in 2021, especially in the 4th Quarter. Our financial results are found on page 2, where we highlight the 2021 GAAP financial results, including over $17 million in net income.
The Board of Members has declared dividends that total $13.5 million since January 1, 2021; $1.5 million in February, $1 million in July, $2 million in November, $2 million in December and the current $7 million. When combined with our new distillery, Show Me Ethanol was able to generate $21.5 million to use in distributions and expansion projects in 2021!
The ethanol crush margins have returned to seasonal norms; ethanol value dropped $0.37/gallon in January while the corn board went up $0.30/gallon. This pressure is coming from increased ethanol production, rising grain markets, and lower gas demand caused by the Omicron variant of Covid-19. We are cautiously optimistic the fuel ethanol margins will remain slightly positive for the year, however the commodity markets continue to run the price of corn extremely high, which may challenge our profitability going forward.
Last June, USDA announced it would provide up to $800 million to biofuel producers under the its Pandemic Assistance for Producers initiative. Finally in December 2021 the details of this program were announced and an application process opened. This program is focused on the COVID-19 impact of 2020, not the improved conditions of 2021. We will update you more on this program as more information is made available.
We continue to focus on our new distillery and associated production of Grain Neutral Spirits (GNS). We intend to diversify our product offerings, which will provide the company resiliency against commodity market volatility and politically driven volatility that affect the fuel ethanol markets. These efforts are paying off, with a significant portion of our production capacity now sold for 2022 at a profitable level.
The annual shareholder meeting is scheduled for Tuesday, March 22, 2022, at the Rupe Center in Carrollton. We will begin serving lunch at 11:30 and begin the business meeting at 12:00. We look forward to seeing you there!
Financial Results for Fourth Quarter Ended December 31, 2021
Total sales were made up of $51.7 million of Ethanol, $8.5 million of Distiller Grains, $3.8 million of Corn Oil and $0.3 million of GNS. Total expenses include Corn costs in the amount of $36.4 million. Net income for 4th quarter of 2021 was $11.4 million.
Chris Smith joined our team in December 2021. He lives in Carrolton and joined SME as a night shift operator. He was very happy to be working closer to home. Christ has 2 daughters, Scarlett (9) and Lorelei (7). He spent ten years in the military starting out as a Diesel Mechanic and then ended as an IT Technician. He was deployed overseas two times. His hobbies include reading, playing video games and cooking meat on his smoker. Please help us welcome Chris, we are very excited to have him working with us.
Please join me in welcoming Samantha Skidmore, B.S., M.A., as our new Inside Sales and Logistics Coordinator. Sam comes to SME with over 15 years of experience in academics, as a faculty member and administrator. Most recently, Sam served as a Sponsored Programs proposal development specialist for A.T. Still University, and as the Associate Dean of Liberal Arts at North Central Michigan College. She specializes in the foundation and administration of programs, curriculum design, assessment, and accreditation.
Sam moved to the Carrolton area in 2020. She has three grown children and a two-year old granddaughter, loves the outdoors, and volunteers as a resource advocate for families in need.
Chili Cook-Off with Cinnamon Rolls
SME hosted a chili cook-off between the employees. Everyone had a good time and there are some great cooks among our staff. Rob Burns won first place with his amazing chili that he took several hours smoking the meat before preparing the chili. Amos Machado won second place with his super meaty chili. Brad Kimmis was nice enough to ask his wife to make cinnamon rolls, and they were amazing. This will become an annual event.
Estate planning is important for everyone. It can help to avoid taxes or legal tie-ups, and ensures that your SME shares are bequeathed as you wish. Planning in advance can ensure a much smoother transfer and take away additional stressors at a difficult time, Many SME shares are currently held in only one persons name. If these shares are not listed in a persons will or trust or do not have a transfer on death, ownership transfer is much more difficult.
Please consider adding a TOD to your shares now if you have not made other arrangements. It is a rather simple process. A minimal fee of $25.00 and a form to complete is all that is needed, then it is submitted to the board for approval. The shares can also be transferred into a trust with a transfer request. Please contact Cheri Roberts at (660) 542-6493 if you have any questions or would like to start this process.