I recently came across a quote from Colin Powell, the four-star general who became the U.S. Secretary of State under George W. Bush. General Powell noted that organization doesn’t really accomplish anything. Neither do plans. Theories of management don’t much matter. But endeavors succeed or fail because of the people involved. Only by attracting the best people will you accomplish great deeds.
That quote resonated with me because I know MFA has attracted the best people in the industry, as employees, directors and customers. As a result, MFA has the right company culture that is focused on service, training and safety.
The challenge all of us face almost every year is how to manage successfully through unpredictable or adverse weather. Despite the weather challenge, MFA was positioned to excel in the areas in which we had control. Grain revenues, reflecting last fall’s harvest, were down about $8 million.
All of us have been through tough times before. There is no company or system better positioned than MFA. MFA is a team. We are a strong team. But we need to challenge ourselves continually. How can we make this team better? We win together, lose together and succeed together.
Like any successful team, we keep score. MFA’s projected profits for the just-ended fiscal 2016 are $2 million. No one is satisfied with that result.
MFA’s projected fiscal 2016 working capital is $70 million. That’s down $5 million from last year and not where we want to be. Reduced profitability had a significant impact on working capital. Still, net worth is $155 million, which is up $1 million. MFA’s projected fiscal 2016 ownership is 35 percent. Our target continues to be 40 percent. On the bright side, fiscal 2015 earnings returned to member/owners during fiscal 2016 totaled $4.9 million cash back.
So where do we go from here? In simplest terms, agriculture will continue to be driven by change. And judging from our scorecard and our 100-year history, MFA will both lead and manage through change. We will embrace change. And own it.
Change requires humility. What worked yesterday won’t necessarily work tomorrow. Going forward, change will happen at an even faster pace.
How do we attack this period of rapid change? We will continue to develop a plan while integrating flexibility. We will make decisions and react quickly. There is no substitute for preparation. We will empower our workforce to make critical decisions. We will be innovative. We will live our values. Decisions and actions are clearer and will become automatic if we tie them back to our values of people, excellence, accountability, financial success and integrity.
MFA is meeting change head on. Our rail facility at Hamilton, Mo., will vastly improve MFA’s and the farmer’s position in the grain industry. On the feed side, MFA’s innovation with Shield Technology keeps us ahead of the competition in empowering livestock producers. It improves animal health and rate of gain while reducing the need for antibiotics.
Our precision program, started more than 20 years ago, is recognized as the leader in our trade territory. Precision ag makes up only 2 to 3 percent of total ag input and equipment costs. But, every single element of inputs or equipment is impacted by the continued development of precision ag. That input and equipment market in the United States is $60 billion.
MFA’s branded seed (MorSoy and MorCorn) contains the best genetics and traits in the industry. MFA’s vigorous process of selection and testing works in combination with our training camps to bring data to both the sales force and producers.
All of these allow us to differentiate MFA in the marketplace.
Success is not an entitlement. Success needs to be earned. We will continue to be sensitive to the pressures you face. We will exceed your expectations.
Great companies are innovative. Great companies display superior execution. They do what they say. They deliver superior results for their customers. They find new ways to serve their customers. They have passionate and committed employees who continue to learn and grow.
All of those qualities describe MFA—your cooperative.