Manage the cycle for success in the ‘new normal’

Factors beyond our control play an increasing role in agricultural production

The agriculture cycle is viewed as a rather simplistic process by the 99% of the population that doesn’t farm. To people not around agriculture, the annual routine for row crops may seem to begin with soil preparation and end with selling the harvest. For the livestock side, the vision might be an uncomplicated pattern of breeding, raising and caring for animals. Those unfamiliar with agriculture take it for granted that these cycles happen every year.

The 1% of you entrusted with providing food, fiber and fuel to a growing population know it’s more complicated. These cycles demand long hours and many decisions critical to the health of plants, animals and your profitability. You understand that there’s no start and end. It is a continuous process that requires constant attention.
Managing that cycle can’t be done in a vacuum. In today’s environment and, no doubt, from now on, factors outside of our control will play an increasing role in product supply, how we farm, and demand for our products. In short, these factors will continue to weigh on our livelihood.

I’ve had the opportunity to be with MFA for more than 35 years. In that span, conversations about the performance of the company or producers have often included a phrase intended to build out a larger context. Whether it’s past performance or what we expect in the future, you’ll hear someone say, “in a normal year.”

We all like to compare the current experience with what we believe to be “normal.” I like to point out that normal (or average) is made up of a history that ranges from the highs to the lows. In fact, not many years fall in the “normal” category. Normal, then, is really our expectations.

Like it or not, our view of “normal” (our expectations) will need to adapt to a changing world. Uncertainty, volatility and the rapid pace of change are here to stay. Combined, these are the new normal. The pandemic received a large share of the blame. It has been a factor, but it’s safe to say that much of the change affecting agriculture was already in progress when the pandemic hit. The pandemic period just exposed it faster.

While change generally brings some uncertainty and volatility, it also brings opportunities in many cases. The past two years have been witness to that. Tight input supplies at elevated prices were generally offset by increased values for grain and livestock marketing opportunities.

We held our internal 2023 Kick-Off Meeting for key leaders in the company back in August. The meeting theme was “Agents of Change.” Topics addressed the new normal and positioning MFA to continue to add value to your operations.

As we look toward our 2023 fiscal year, today’s version of the “crystal ball” suggests a carryover of some disrupters for the coming year—
labor, supply chain, inflation and interest rates. These are challenges we must address together. This is best done by frequent communication. Take the time to talk with our sales team or location personnel. It’s a 12-month planning process. Conditions change quickly.

There have been some improvements in the supply chain; however, there are still issues in specific product categories.

The nationwide lack of truck drivers continues to make transporting ag products difficult. Drivers are only part of the transportation challenge. Potential for a rail strike remains. Historically low water on the Mississippi River is affecting barge traffic. Both situations are threats to fertilizer and grain movement.

Labor shortages are still impacting many of you, MFA’s operations and most industries right now. While we may be short-handed in some locations, our system provides the opportunity to share personnel and cover your needs. We have a talented group that is committed to that.

That talent can deliver on the goals you have for your operations. And MFA’s team can provide advice on the state of supply and transportation disruptions along with an insight into the growth of sustainability, climate change and ESG (environmental, social and governance) initiatives. These are fast-changing topics. How they impact agriculture and your farm will become more evident in time, but they are part of the ag business landscape now.

The new normal will not change Team MFA’s approach to how we do business. We aspire to deliver best-in-class products, services and expertise. That’s our approach to successfully partner with producers and deliver value that is profitable for you and for MFA.

One of the things I’ve learned in 35 years of serving this cooperative is that aspiring to be “normal” limits our potential as well as yours.

Ernie Verslues
President & CEO
MFA INCORPORATED
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