We continue to challenge each other here at Federated, as well as with our suppliers, to get smarter every day by listening and challenging the ways we do business. The key is to leverage this knowledge to help our patrons get those extra bushels off every acre and show a solid return on investment (ROI). We believe we did get smarter by aligning our recommendations to your goals. 

We have great examples of patrons that worked with us from the beginning of the cycle through harvest and the results showed a very solid return on investment. We had growers tell us they achieved record yields on corn and top three yield on beans. We also continue to shop suppliers and look for ways to reduce your input cost, from seed to fertilizer and crop protection, to fuel and propane. 

We want to earn your business by being your partner with great knowledge and competitive pricing. The patronage payout this spring will be the over-the-top extra bushel everyone is looking for.  

In 2018 we bought the assets of the Moose Lake Co-op. These assets included the agronomy plant, with capacity to do about 3500 tons annually, the feed store with a mill, and the Cenex ® gas station/convenience store. We tore down the mill due to the poor condition, and Munson Lake Nutrition has secured some of this feed business. The co-op owns 19% of Munson so it is a win for the co-op. This acquisition gives us a chance to expand our footprint and will give us more leverage with our suppliers as we become a bigger piece of their business. We are very pleased with our results and the community seems very pleased to have us, which helps solidify our reputation. This northern area has always been very strong for our energy business, primarily propane. Our energy business was very strong in 2018 due to the below-average temperatures across our geography. We will over-deliver our plan, which will help fund our capital needs across the entire co-op.

Also in 2018, we had a leadership change in our agronomy team, Craig Gustafson assumed the role of Director of Agronomy Operations. He brings over 40 years of experience both in the co-op system and on the farm. His experience will be very valuable for you the patrons, and our team members. He knows many of you but he looks forward to meeting more in 2019.

As we move into 2019, we are very aware of the financial challenges you, our growers, are facing. Inputs are going up and the prices are not following. We are committed to staying focused on providing insight and expertise to help you get that extra bushel to help all of us weather these turbulent times. We know you have choices, but the diversity of our business at the co-op, between agronomy, energy and retail, gives us the ability to provide solid pricing and great service. It also allows us to generate profit to support the needs of agronomy. Our goal is to be your one place to buy for all your needs: agronomy, energy, and retail. 

On behalf of all the Federated associates and your Board of Directors, thank you for your patronage in 2018. We look forward to growing with you and identifying ways to get smarter. I hope to see you at our meetings in the spring of 2019.

Happy New Year!

Mike McMahon, CEO

Federated Co-ops, Inc.