MFA Incorporated has the ingredients to succeed
MFA President and CEO, Bill Streeter addresses members at annual meetings
As he traveled MFA’s trade territory to visit with members at MFA’s annual meetings, MFA president and CEO Bill Streeter told audiences that cooperatives need three key ingredients to succeed and thrive as a modern agribusiness.
“The first thing,” said Streeter, “is an engaged, well-informed corporate board of directors.
“We have 14 farmers who take time from their busy schedules to provide oversight to this company to make sure management is on target financially on one hand. On the other hand, they are vigilant to make sure MFA is taking care of its members. These gentlemen don’t just attend six or eight meetings during the year and look over the cooperative’s finances. They spend 20 days of the year away from their operations. They’re not just analyzing finances. They are participating in training programs—training programs designed to develop deeper understanding about cooperatives and their relationship to agribusiness.
“They’re learning about financial and lending relations, risk management, and policies that affect agriculture and food production. And they take comprehensive tours of MFA facilities. They understand what MFA does and where, how and why we do it.
“The second key ingredient that you need to survive as a modern agribusiness is talented and dedicated employees throughout the organization. I was recently asked what made me most proud during my tenure as president of MFA. It was an easy answer: it’s the can-do attitude of MFA employees. We want our employees to be aggressive and hard chargers. And they haven’t disappointed. In the past year, we established financial and sales goals, and action plans to achieve those goals and we implemented those plans. These plans were embraced by the employees and they focused on them all year long. The results speak for themselves.
“Finally, the third thing we need to succeed is the people here at the meeting—our customer base. The people who attend these meetings represent 40,000 farmers. Without a strong customer base we cannot be successful.”
Streeter went on to say that through these three ingredients, MFA Incorporated continues toward its goals.
“The balance sheet has improved,” he said. “We continue to take the capital we have to work with and manage it intensively. We have excellent support for our bond program. We’ve had people waiting in line. Our outstanding bonds went from $47 million dollars to $56 million in just the few months after we announced they were available.
“We have excellent customer confidence. We had record advance pay in 2009. Farmers came into our retail locations that fall and wrote checks to us for $69 million in prepay. We figured that would be a record. In 2010, that prepay figure reached $73 million, and that’s not even including fertilizer they had applied, which would push the figure toward $100 million.
“We’re embarking on leadership training for our employees, not just sales and product training, but how you can lead in your community and provide the economic benefits of what businesses do in our trade territory.
“We’ve developed intermediate term goals with what we want to do with our balance sheet. We ended up this year at $72 million in working capital. Our goal is to have $100 million by 2014. We want to get to net worth from $112 million this year to $150 by end of fiscal year 2014. We had cash flow available before interest taxes and depreciation of $45 million. We want that to be $50 million in three years. Our solvency ratio is in the 25 to 27 percent range; we want it to be 35 to 40, that’s our goal.
“We can no longer just say we want to be a general caretaker. Caretaking is not going to let you thrive or move forward. We have a clear vision of where we should go and we have communicated that vision. We know how we want to get there. With your support we look forward to great things for this company in the future.”
See related story here: "On the forward Path"