MFA Incorporated Annual report for August 31 2010

MFA Incorporated’s fiscal year, which ended Aug. 31, 2010, reflected a sound recovery from the world-wide market volatility of 2009. Our profitability of $9.7 million reflected an acceptable level given last year’s operating environment.

Last year’s wet fall delayed harvest and field activity. Continued wet weather through the winter months and into spring kept farmers inside and delayed spring fieldwork. Nature relented in mid-April and MFA’s employees busily did what they do best.

They moved record amounts of seed, crop protection and plant foods. In a record-setting timeframe for April, MFA achieved a $14.7 million profit. Never before has your cooperative moved so much in so short a period. MFA has a loyal and dedicated employee workforce. Employees are the backbone of this organization. No one in our trade territory has a better group of individuals.

This past fiscal year we focused on what we know best: grain origination and sales of agronomy and livestock products. We set in motion a constant review of risk management. We divested ourselves of much of our pork production. We focused on improving our balance sheet and reducing capital requirements. We renegotiated our loan agreements.

We are now positioned almost two years ahead of realistic internal targets set in July of 2009. What’s more, we have excellent lender relations. We also have very good bond sales and outstanding customer confidence. In fact, pre-pay at calendar year end 2009-10 was a record $69 million. Furthermore, farmers delivered a near record $431 million of grain to MFA locations.

As shown by our customers’ actions, MFA enjoys strong customer confidence in addition to strong supplier support and excellent support from our corporate board of directors. MFA continues expanding, although at a slower pace. The budget announced for fiscal year 2010-11 reflects profitability of $12.4 million, which is a very achievable goal.

Many positives were reflected in our trade territory as we entered this new fiscal year. An excellent fall saw farmers complete corn harvest well ahead of normal. Soybean harvest followed suit, and winter wheat plantings were 90 percent complete, 22 days ahead of normal. Prices for grain, beef and milk spurred the agricultural economy.

Today, MFA has high ownership of grain with very good margin potential, favorable plant-food movement compared to the five-year average and excellent marketing programs in place (both macro and micro). We have customer faith, strong bondholder faith, excellent employee morale and attitude, and favorable interest rates. The future holds promise. We have the policies in place, the confidence of all involved and the determination that the company’s best days are ahead.

In a few months, MFA will celebrate its 97th anniversary. Our success will continue because we enjoy an interested membership, an involved and engaged corporate board, and loyal and dedicated employees.