MFA keeps focus on opportunities and balance-sheet strength
In early February the U.S. cattle herd dropped to its lowest level since 1958. Many cows and heifers were slaughtered in 2010. Beef prices climbed. Simultaneously, corn and soybean prices were approaching 70 percent of their 2008 values. Fertilizer was following suit.
At first glance, it certainly looks like agriculture is in a good position, doesn’t it? Farm income levels are good, prices are at profit-building levels. What’s not to like?
Those of you who took hits in that 2007-08 season know exactly what I’m talking about. Mark Twain once said a cat that jumps on a hot stove won’t repeat the experience. More importantly, he said, that cat won’t ever jump on a cold stove, either.
It’s important that those of us in agriculture learn the correct lessons. Here at MFA, we don’t intend to follow the cat’s example. Sure, we got burned in the economic turmoil that followed on the heels of the world-wide market and commodity collapse of a little more than two years ago. MFA’s management learned important lessons. But we’re not about to become timid. We’re going to continue an aggressive strategy to build the business and better serve our customers.
With that established, let me share with you the lessons we learned at MFA, with many of the conclusions that might be appropriate for the operations of our customers as well as their cooperative. First, balance sheet management continues to be extremely important. As such, it is a central focus here at MFA. Building strength in that critical piece of a business’s financial yardstick cannot be over-emphasized.
Next, we’re committed to continue finding and hiring the best people available to grow our business. And we’re going to keep them trained so they can become valuable to MFA and to MFA’s customer/owners. The strength of our employee workforce is of central concern to me.
We’re going to anticipate and focus on opportunities, not on problems. All of us, producers and the businesses that serve them, must look forward in order to find opportunities. That simple philosophy helps differentiate between progress and retrenchment.
We are going to be more creative in our approaches, while trying to better understand this cooperative’s competitive advantages. We have a retail presence unmatched by any other enterprise in our trade territory. We have the people, equipment and processes in place on the ground near you.
Constantly evaluating our marketing effectiveness will allow us to keep delivering the products and services that better serve you and strengthen our bottom line. A strong emphasis on sales will keep us effective and profitable. Antiquated procedures must give way to new market realities.
That’s easier said than done, as all of you know. Agriculture is a business steeped in tradition. Still, innovation in agriculture has allowed the United States to lead the world in production because of our willingness to embrace smart growth that results from innovation.
That means knee-jerk reactions must be suppressed while rapid response to ever-changing market dynamics must be encouraged. That’s a priority at your MFA. We will not procrastinate. We will make sound decisions while constantly looking for alternative ways of conducting business.
As always in a business built on serving farmers and ranchers, MFA’s decision-making processes will continue to be customer centric. MFA exists to provide you with economic advantages in a changing environment.
All the while these processes and promises are taking place, here at MFA, we will constantly touch base with you, our customer. We will do that on a regular basis. In fact, in March, we hold our district meetings in which we share with you our financial snapshots as well as programs and marketing efforts.
I strongly encourage you to attend. Traditionally, these venues are well attended. The interaction helps both producers and company executives find solutions and services that serve both groups well.
My last point, that might well be the most important, is that at MFA we are going to resist—no, strike that—we are going to ignore negativity. Our best days are ahead. In 2014 MFA will celebrate 100 years of serving agriculture. We have a lot to accomplish to add to what this cooperative has already accomplished in a century of outstanding performance.
Here at MFA, we are committed to being prepared and poised to perform when the opportunities are presented. Count on it.
Bill Streeter is President and CEO of MFA Incorporated.