Please join us and become a member of Farm Supply!
If you are an agricultural producer, or as the IRS likes to put it, “the owner or tenant of a farm, bears the risk of production, cultivates, operates, or manages the farm for gain or profit”, please consider joining our cooperative. Another way of saying it is, if any percentage of your income is derived from a consumable product (livestock, fruits, or vegetables) you can apply for membership with Farm Supply.
To join, just submit an application for membership along with $1 to purchase one share of Commonstock. You can pick up an application at any Farm Supply location, or just call us, we would be happy to send you one. The application is submitted to the Farm Supply Company Board of Directors, and if approved, one share of Commonstock will be issued to you. This is a lifetime membership, as long as you continue to purchase agricultural products from Farm Supply, and retain your agricultural production status.
As a member, you are one of the owners of our company. Ownership is based on the amount of money you have in the revolving fund, (more on that below). Also, each member has one vote annually to elect Directors of the Board and occasionally make changes to the Articles of Incorporation. This company belongs to our approximately 2600 members, and we would love to welcome you into our cooperative.
As an owner of Farm Supply, dividends are declared for members that have annual purchases greater than $1,000. Based on our profits at year-end, these dividends are allocated to each member as a percentage of their purchases made during the year. For example, if the dividend is 3% and member purchases are $10,000, then a $300 dividend is allocated to that member. These dividends are taxable in the year they are allocated.
This is how we do it, 30% of the allocated dividend you earn is paid to you by check. This usually happens in July. The remaining 70% of the allocated dividend is kept in a revolving fund, or “retained member capital”, which is member equity in Farm Supply. This revolving fund is paid out at a later date and is not taxable, as the tax was paid the year the dividend was allocated. The revolving fund is significant as it enables Farm Supply to have working capital to do business. Therefore, member equity is paid out when there is sufficient equity to do so, with approval of our Board of Directors. Please know, the revolving fund is paid to all members at the same time by the year in which it was retained. Likewise, it is not possible to withdraw equity before other members receive their distribution.
If you are interested in being a member please contact Farm Supply at any time, we love hearing from our customers.