Strong start, ready for spring
One of the year’s highlights for me is the late February or early March delegate meetings we hold throughout MFA’s trade area. The meetings provide a platform for interaction with producers and employees from company-owned facilities and our local affiliates. The business portion of each meeting covers an update on company operations, financials and the election of board members in applicable districts.
There is intangible value in the opportunity for in-person interaction and involvement with our member-owners.
The COVID-19 pandemic has been unpredictable at best. We continue to experience outbreaks in parts of our trade area. Like many issues in our country today, there isn’t much common ground on risks associated with it or how to approach large gatherings. I long for the days when we can direct more conversation on the business rather than COVID-19.
On Feb. 2, management and the MFA Incorporated Board of Directors decided to cancel the in-person delegate meetings scheduled for the last week of February. Many factors went into reaching this decision, none more important than the health of our members and employees. We are nearing “busy season” for all of us with calving and spring agronomy work. We don’t want these meetings to be responsible for a negative impact on this important time of the year.
Instead, we will communicate company and financial updates in a couple of ways. First, delegates, alternates and advisory board members were sent a letter providing key highlights for the first five months of the year. Second, a more detailed document was prepared and sent to location managers. They will use this information to deliver operational details at future advisory board meetings.
The scheduled elections in Districts 6, 7, 9, 11 and 12 will be conducted via mail-in ballots. Ballots were included in the letter mailed to eligible delegates in late February. In accordance with company bylaws, the nomination period ended Nov. 15, 2020. As posted in the February 2021 Today’s Farmer, all five incumbents are running unopposed.
As I’ve mentioned in previous meetings, we have turned eight of the 14 board members since March 2018. We’ve lost some talent, but rest assured, we’ve also gained talent. You are represented by a committed and dedicated board.
This magazine’s February issue included an article on our financial performance for fiscal 2020—a very tough year. We communicated key reasons for the results to the membership at the annual meeting.
Our performance for the first five months of fiscal 2021 has generated noticeably different results. A few highlights at Jan. 31 include:
- We have a year-to-date loss, but it is consistent with historical results. We are $6.4 million ahead of plan and $17.4 million ahead of a year ago.
- Working capital is $8 million over plan and $1.2 million over a year ago.
- Corporate fertilizer tonnage is 130% of plan and 158% of the prior year.
- Grain bushel receipts are 118% of prior year—in line with the increased production this year.
- Customer prepay is at levels last seen in 2014, 2015 and 2016.
It’s a very good start, but we aren’t ready to celebrate yet. I’m reminded of some highlights from football games over the past few years. A player makes a great play. But in his exuberance, he doesn’t finish strong. We won’t celebrate too early and drop the ball before reaching the end zone.
I’ve been around long enough to know that our year will ultimately be defined by the spring season. We can’t control the weather, but we can control almost every other aspect of our business.
Livestock and commodity values continue at levels that provide good profit potential for producers. We will focus on driving growth and profitability for the company while creating value for our customers.
Dr. Jason Weirich leads our Agri Services Division. This past Christmas, he shared a deck of cards along with a note to leaders and managers in the retail division. The back of the card had the statement, “It’s not the cards you are dealt, it’s how you play them.”
I am the first to admit that we have received better cards this year. But, we are also doing a better job of playing them.
Best of luck to each of you in your operations.
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