As this issue went to press, there was rain in the forecast. This after a long stint of clear weather—basically a month’s worth of unimpeded prime harvest conditions.
And what a slog it was.
Whether it was a near-record corn or a record soybean crop, harvest volume kept grain carts and trucks on the run and the combine at a modest speed. In many areas, wind-blown, lodged corn and green-stemmed or drooping soybeans added to the patience required in the combine cab. Regardless the challenge, bushels rolled in for a top-level harvest.
Our hats are off to the marathon effort you spent to get the crop in. And hats off to the MFA employees who extended hours, gave up weekends and generally pushed the limits to receive grain. You often will read in the pages of this magazine that MFA management understands the critical role employees play in a cooperative’s success. That critical role truly is apparent in the harried pace of harvest and in the race against weather during planting season. Without these employees’ dedication, the idea of MFA wouldn’t be possible.
Now that farm bins are full, elevators are topped off and grain marketers have gotten a look at the job they have for the coming year, market dynamics of the big crop come into focus. There isn’t a stack of good news for commodity prices. In a recent report from Co-Bank, analysts said markets are signaling 2016/17 per-bushel cash prices for wheat under $4; corn around $3; and soybeans around $9.
Signs of light in this gloom come from that old saw: the cure for low prices is low prices. Buyers increasingly tap into the low-cost grain stream. Exports are poised to increase. Domestic commodity grain use is projected to climb. But none of these are expected to overcome the growth in supply.
What to do with supply? Though the farm economy has dampened capital expenditures, the incentive to carry grain for future sale and better margins continues to spur on-farm storage buildout. You see it in the MFA trade territory—the horizon is punctuated with the sun glinting off shiny new galvanized bins. Producers who made an investment in storage during more profitable years of this decade will put it to good use this year.
Like those producers, over the years MFA has sought to improve its grain storage capacity both in total volume as well as efficiency. In the past several years through capital expenditures, acquisitions and general improvements, MFA and its joint ventures have added more than 3 million bushels of permanent storage to reach 44.3 million bushels. Temporary storage for MFA and joint ventures has reached 13 million bushels.
Meanwhile, work continues at the MFA shuttle loader facility near Hamilton, Mo. When completed, the facility will have 2.1 million bushels of permanent storage and improved ground storage of 1.5 million bushels. Yet the point of the facility isn’t how much it will hold but how much grain it can move in a year and the markets it opens to MFA customers.
The goal for the facility is to move about 40 unit trains per year, or about 16 million bushels. Much of that grain will be sold to poultry markets in northwest Arkansas, eastern Oklahoma and eastern Texas. And, because of the ability to deliver 110-car trains, there are potential opportunities to sell to terminal markets in Arizona, California and exports into Mexico. When the shuttle facility is finished, this kind of turn-over in volume will help keep grain flowing through MFA’s northwest Missouri grain complex—a real benefit in high production years.
Overall, MFA shares the goals of its customer/owners. The cooperative wants to bring in harvest efficiently, store it safely and sell it profitably. The improvements already made and ones underway will help do that—efficiently and into the future.
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