Viewpoint

Hamilton grain facility

Written by Ernie Verslues on .

MFA made a loud statement in support of the Midwestern grain industry on May 3, 2016. That’s the day company officials from MFA Oil Company and MFA Incorporated held groundbreaking ceremonies for a 110-car shuttle-loader facility in north central Missouri near Hamilton.

The facility sits on land in Caldwell County bordered by the Union Pacific Railroad and Highway 36. Interstate 35 is located close by.

When completed, the grain-handling facility will consist of 2 million bushels of permanent storage and 1.5 million bushels of temporary storage along with a loop rail siding that will accommodate a 110-railroad-car “shuttle” unit.

This structure will allow farmers in north central Missouri and southern Iowa to deliver crops to a modern, high-speed grain facility. Its rail siding capacity will provide new efficiencies to MFA Incorporated’s grain system as well as access to new markets.

MFA Incorporated will operate the facility. MFA Oil Company, our sister cooperative, is a partner and investor in the project. This facility is MFA Incorporated’s largest single investment in real dollars in any geographic region. It will provide a significant return in cash flow that will benefit all members.

Because of the project’s complexity, I demanded we proceed slowly with substantial due diligence. Grain origination is one of our core strengths. This is a highly productive crop area. There are very few areas in the territory where a facility like this makes sense. This location makes sense.

Our corporate board of directors is composed of seasoned farmers and ranchers who provide oversight on MFA strategies and goals. The board members are fully informed and supportive.

With the ability to load almost 400,000 bushels per train, a 110-car shuttle loader will allow MFA to sell into large and diverse markets such as exporters, poultry and cattle operations, and other grain operations in areas that stretch from the Gulf Coast to the West Coast and Mexico.

Part of MFA’s vision statement includes a focus on geographic expansion that will strengthen and diversify the business and allow the company to grow strategically. In addition, that growth should capitalize on MFA’s strengths as a grain originator.

MFA’s corporate strategies include managing the company in a business-like manner that will allow MFA to withstand the economic cycles of agriculture, maintain profitability and best serve the interests of the farmer-owner. The Hamilton grain facility fits those strategies seamlessly.

Logistics are key in the grain business. For MFA, this project is the culmination of a multi-year process. This strategic investment is a year-round asset. This investment will directly benefit farmers by providing them a place to quickly unload during peak harvest. It helps relieve pressure on existing MFA grain-receiving facilities throughout the region. During high volume periods, MFA can empty grain from smaller area elevators to benefit local storage capacity.

MFA Incorporated and MFA Oil Company are both cooperatives that are significant players in the markets in which we do business. MFA Incorporated is listed as the 34th largest cooperative in the United States. MFA Oil Company is listed at 38th. With the growth MFA Oil has enjoyed in the last few years, they will climb higher.

That said, neither cooperative is driven by a need to be the largest entity in the industry. Yes, we want growth, but at the end of the day, our goal is to be the best in the marketplace. We can achieve our goal by creating opportunities for growth.

This investment in infrastructure fits MFA’s mission. MFA was formed more than 100 years ago to address lack of buying power and market access for farmers. We take that mission seriously. This facility also fits MFA’s vision of growing in strategic, profitable ways that enhance the economic well-being of our member/owners.

MFA’s home office may be in Columbia, yet the face of MFA is the rural communities in which we do business. We are proud to be a good citizen in these communities. We are proud to be a part of growth in these communities.

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