The one word to describe 2019 for me is “Wow.” What a crazy year it has been. I know many of our patrons are ready to get on with the next decade. As I type that sentence, “Wow” comes to mind again. Wow, where did the last decade go? 

For 2019, we had below average temperatures in the winter and record rain fall in the spring and summer. Obviously, given Federated’s energy business, the cold weather was a positive for your co-op. We had record sales of propane this year.

I’ve heard from many growers that 2019 was one of the toughest years they could remember. With all the rain you didn’t know when you could start planting and, in some cases, you didn’t even know if you could plant at all.

The other thing on everyone’s mind is what will happen with commodity prices due to the trade war. This continues to be anyone’s guess, but we hope the trade agreements get worked out to the benefit of growers.

A very big challenge for your co-op in 2019 was insuring we had product when you needed it, especially fertilizer. We annually secure over 75% of our fertilizer via the river system and we didn’t get our first barge until the end of June, and most of our product arrived in July. We ended up covering some of our supply via other sources at an expense of about $200K, but grower needs were met in a timely manner.

I know for many of you the fall harvest has been a challenge due to rain and snow. We also were challenged to insure we had propane for your dryers. I am proud of our team’s efforts and the creativity they demonstrated to secure propane and make the process seamless for you. We turned away many potential new customers looking for gas so we could protect our loyal patrons – we are committed to taking care of our loyal patrons! We now have many patrons who are true Power of One patrons: they purchase all their inputs, seed, crop protection, fuel, and propane from Federated Co-ops. 

As we move into the next decade, we are laser focused on cost, service, and growing our business. We will continue working very hard to earn your trust across all the co-op’s service areas. The more business we have, the more leverage we have with our suppliers. So, if we haven’t yet earned all your business and you need a bid on any parts of your business – from agronomy, to energy, to your retail needs on items such as power equipment, feed, or parts – we are here to serve. Our goal is to have more Power of One patrons.

One key area that requires help from all sides is planning. To effectively move forward, we need to know what your plans are. We sold about 60% of our targeted total fertilizer for the fall, which means there will be even more pressure on us in the spring as the remainder is sold and delivered. Planning – and communicating your plans to us – is vital. Our plans included investing over a million dollars in equipment this past year to better serve you. Our goal is to improve our efficiencies with our plans, and with your plans. Our Agronomy sales team is ready to work hard to help you with planning as we together make 2020 a great year.

This past year we introduced our tag line, Your Land, Your Community, Your Co-Op, reinforcing the fact that we are part of your community and the coop is a success because of your loyalty. We strive every day to get a little smarter. I believe the best way to get smarter is to plan well and partner together . . . starting today.

On behalf of your Board of Directors and the 290 employees at Federated Co-ops, thank you for your patronage.

Merry Christmas and Happy New Year!

Mike McMahon

CEO, Federated Co-ops, Inc.