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moving the entire crop from the hullers and shellers to aBlue Diamond receiving point.Increasing our bottom line can also be seen this yearthrough the efforts of our Government Relations teamGetting their Good Going. They were active in developingand persistent in pushing for the recently enacted FreeTrade Agreements with South Korea, Panama andColombia. Sales to these three countries have respondedpositively with $75 million of new almond sales for theindustry just this year.Turlock Plant Stirs ExcitementAmong MembershipSo let’s talk a bit about the biggest story of the year— Turlock. What an exciting time to be watching thelong awaited, single largest capital improvement in our102-year history coming to life before our eyes? Just afew weeks ago, the final roof beam was lifted into place,and the roof was sealed up. Just last week, some of theequipment for the first line was moved into the building.Sometime in February the plan calls for starting to testrun some of the equipment.We are making excellent progress, meeting ourconstruction schedule, and of paramount importance,meeting our budget. Speaking of budget, while we havenot disclosed the specifics of cost, we have said fromthe beginning that this will be the largest single capitalexpenditure in our history. Since making the commitmentto expand into Turlock, the business reasons for buildingfor our future have only improved and we believe evenmore strongly that we are on the right path for BlueDiamond to continue to be the best almond processor andmarketer in the world.We know there is speculation about how this new valuableasset will affect our pool returns. Under the heading of“full disclosure” and to speak to any confusion that mightexist, the cost of building in Turlock had absolutely zeroeffect on the just final 2011 pool — none whatsoever. Theaccounting rules we follow do not allow for the expensingor depreciation of any capital expenditure until the yearthat it is put into useful service. Since the new plant willstart up next spring, during the processing of the 2012crop, there will be a charge against the 2012 pool. It willhave a real cost, starting next year, but we don’t thinkyou’re going to care. That’s right. WE DON’T THINKYOU’RE GOING TO CARE. Remember the marginenhancements I mentioned before? Remember the revenueimprovements from selling-up the value of our pool?Those pool improvements, that are sustainable, will morethan cover, way more than cover, the small charge tothe 2012 pool year.And even more importantly, don’t forget, there is somebusiness we can’t do now because of capacity constraints.Turlock will lead to expanded business once it is inoperation. And when it is in operation, it will be at lowercosts than we are experiencing today, adding furthermargin improvement. I don’t mention these things becauseI think you may be worried about the decision. I think weare all excited about how Turlock will add to our ability tobuild a better future. But as it is a BIG DEAL, we wantedto give you the facts and some perspective. Your future isbright.Would it surprise you if I said sometimes “underinvesting”can be as costly, if not more so, than “overinvesting”? Wehave come to realize that in some respects because we wereso focused on getting our business model refined and gettingour cost structure where it should be, that we may havewalked by some quarters, in order to pick up some dimes.It happens on our farms too. We sometimes make the “oldone” keep working too long – one breakdown too many. Theconstruction of Turlock is a big example of needing to dosome “catch up,” and the lessons we are learning there arehelping us discern some other areas where some prudentinvestment may be beneficial.Leading the Co-op in the RightDirectionA little over three years ago when we first started planningfor leadership change, we were real proud of Blue Diamond,and mindful of our responsibility to select the right kindof leadership. Part of the discussion turned into a goalthat making a wise choice could take a great company,and make it even better. We believe there is measurableevidence that our goal is being realized. Improvementswe are making are sustainable, and they are adding to ourbottom line.In our recent review of our President and CEO, one of thequestions we considered was “What Areas Of The CEO’s JobResponsibilities Have Been Performed Most Effectively?”Some of the comments were: ‘You have establisheda stronger One Business Team approach.’ ‘You haverecognized where additional talent could be beneficialto overall Blue Diamond success.’ ‘You have pushed forsignificant sustainable cost savings.’ ‘You have establisheda path for growth addressing our production limitations.’‘You have pushed value-added and consumer into newareas where additional margins can be captured.’ ‘Youare managing positive changes and implementing themthrough the organization.’In the beginning, I used a baseball analogy to describe how wellthe team was performing. Now that the World Series is over,maybe football vernacular would be more appropriate. Well, wethink our Quarterback had a winning season as well.12 Almond Facts NOVEMBER | DECEMBER 2012