How does MFA contribute to its communities?
By Nancy Jorgensen

We find answers in Lafayette County…

Craig Childs enjoys showing visitors the Civil War cannonballs that remain lodged in the Lafayette County Courthouse in Lexington, Mo. Locals view the famed Battle of Lexington as an important part of the area’s history and culture. As regional manager for MFA Incorporated, Childs also enjoys sharing how MFA has played an important role in the county’s history. “We’ve served the community for decades, and we continue to make contributions to the economy here and throughout the region,” Childs said.

Lexington area farmers grow corn, soybeans and other crops and livestock just east of Kansas City, south of the Missouri River. In 2007, Lafayette County ranked fifth in corn production and seventh in soybeans, making it one of the top ag producing counties in the state—where it holds a perennial spot.

According to Tom Hayes, mayor of Lexington (population 4,200), area farmers depend on MFA to market their grain and provide services and supplies they need to succeed. “Lafayette County is one of the richest soil areas in Missouri, and I’d hate to think what our county would be like without MFA,” he said. “They’re an important partner for us.”

MFA’s importance to Lexington and Lafayette County mirrors a role the cooperative plays in many communities throughout its service territory. While that influence may depend on the number of MFA facilities in a region, the overall effect on rural economies is something held in deep regard and considered an obligation by the leadership of the cooperative. Whether it’s payroll, purchases or patronage, MFA contributes to a vast swath of rural economies.

Beyond the bottom line

The Lexington Agri Services Center is one of 125 owned by MFA Incorporated. Within Lafayette County, MFA sales for the fiscal year ending Aug. 31, 2007, totaled $61 million. Numbers for the current fiscal year hadn’t been totalled in time for this article.

Mike Watring, a general manager whose responsibilities include the Lexington MFA, explains how MFA’s presence helps his rural community. “We’re fortunate to have some good farmers working land that produces good yields,” he said. “Towns like ours need a strong farm store and elevator, a café and a bank. If you’ve got that, then your school and other community services will survive.”

There’s little doubt that MFA’s regional $61 million in sales boosts Lafayette County’s economy. You can multiply that impact many times over in MFA Incorporated’s total trade territory.

In total, MFA Incorporated’s sales for FY 2007 hit $1.1 billion; assets were $418 million and net income was $16 million. Of that $16 million, $6 million was returned to farmer-owners in patronage payments. In addition to MFA’s 125 Agri Service centers, another 30 independently owned stores operate under a licensing service agreement, bringing the total number of MFA-branded centers to 155.

Ray Massey, an agricultural economist at the University of Missouri, offers his perspective on how MFA’s economic power goes beyond the company’s direct sales, assets and income.

“Each product and service that MFA provides has a different impact on the economy,” Massey said. “For every dollar earned by MFA from grain storage and warehousing, $1.70 of economic activity occurs in the community. And for agricultural support activities, about $2.10 of economic activity occurs.”

MFA is just one of many agribusinesses headquartered in Missouri. But MFA differs in an important way, according to Massey: Most of the benefits from MFA’s business remain in the region because it is owned by and serves local people. “For the most part, money that MFA spends stays here and generates even more economic activity,” he said.

MFA also focuses on all sizes of farmers. “Missouri is an interesting state because we have over 104,500 farms, of which 92,800 have sales less than $100,000,” Massey said. “Large businesses don’t want to focus on these farms. MFA does. But MFA also serves the over 10,000 large farms.”

Massey speculates that if MFA didn’t exist, farmers would still be served, but not as well. “Without MFA, there would be fewer businesses meeting the needs of farmers, farmers would have to travel farther to access them, and the businesses would not be as integrated into the economy.”

Major player in plant food

Like many other MFA locations, the Lexington center manufactures, mixes and grinds feed, offers precision agronomy services, and sells seed and other supplies. Countywide, MFA operates 376 units of rolling stock, from semi trucks to fertilizer and crop protection applicators.

One of MFA’s most important jobs is to provide and apply plant food and other agricultural chemicals. In FY 2007, MFA handled 28,892 tons of fertilizer in Lafayette County, or about 58 percent of all sold there. Bill Streeter, senior vice president of MFA Incorporated’s retail division, says the co-op remains a major player in plant food sales throughout its service area.

“It’s hard to make people understand our impact when you talk about dollars, bushels and tons,” Streeter said. He puts it in more graphic terms. “MFA Incorporated sold 1.5 million tons of plant food last year; that amount would fill 800 miles of semi trucks. When lined up bumper to bumper, they would reach from Kansas City to New Orleans.”

Massey rates MFA’s value as a source of farm supplies as significant. “Missouri was able to increase its acres of corn from 2.7 million acres in 2006 to 3.4 million acres in 2007 because businesses like MFA had the means to purchase and distribute large quantities of fertilizer and chemicals necessary for production,” he said. “The increasing cost of inputs puts a strain on any business marketing those inputs. MFA’s commitment to supply Missouri farmers is critical for the dynamic conditions we currently are experiencing.”

No slouch in the grain department

When it comes to grain, Childs reported that, in Lafayette County, MFA marketed a total of seven million bushels last year. That compares to the total corn production of 16 million for the county and 461 million for the state; and the soybean harvest of 4 million for the county and 168 million statewide.

Last year, MFA Incorporated system wide grain sales totaled $340 million, up from $208 million the year before, largely because of increased commodity prices. USDA estimated the value of 2007 grain production in Missouri at $4 billion.

“MFA grain marketing is important but is not its biggest contribution,” Massey said. He pointed out that some large farmers ship directly to terminal markets and the increase in local end users such as ethanol plants has fractured the local grain market. But, as Massey explained, the service MFA provides is important for producers who have little on-farm storage or no convenient way to take advantage of distant market outlets and need the convenience of local storage at harvest. During recent big crops, MFA’s implementation of efficient pile storage systems has proven beneficial to growers regardless of size or on-farm storage capacity.

“MFA sold 65 million bushels of grain last year,” reported Streeter. “That would fill 950 miles of semi trucks. When lined up bumper to bumper, the trucks would stretch from St. Louis to New York City.”

Providing local jobs

Beyond serving farmers, MFA contributes to the Lafayette County economy by employing about 80 people full time and 26 part-time and seasonal workers hired mostly during planting and harvest. This adds up to $2.3 million in annual payroll in the county, plus about $650,000 in added benefits including healthcare, retirement, 401K matching funds, workmen’s compensation and Social Security costs.

In addition, over the past 5 years, MFA spent $3.5 million to update and expand its local grain operation, creating construction jobs in the county.

Across MFA’s territory, MFA stores and elevators often rank among their communities’ largest employers. Lexington is no exception.

Here, others vying for the top employer position include the school system and a gunstock manufacturer.

System wide, MFA Incorporated employs 1,416 full-time equivalent positions and about 300 seasonal workers, providing $59.3 million in payroll in fiscal year 2007, plus benefits of $15.8 million. In addition, the 30 locally owned MFA operations provide $15.3 million in payroll, not including benefits.

From scholarships to steers

In Lafayette County, beyond serving farmers and providing jobs, MFA makes other types of contributions. Through its participation in the MFA Foundation, the co-op offers six scholarships of $2,000 each year to Lafayette County high school seniors. Throughout MFA’s trade territory, the foundation provides about 300 scholarships a year. And over the past 50 years, the MFA Foundation has endowed $10 million in scholarships to 10,000 recipients.

At the Lexington 4-H livestock auction last summer, MFA contributed $5,000 toward the purchase of livestock raised by area youngsters, and the co-op contributes similar amounts at fairs throughout the region, often donating the meat to local charities. School leaders seek out MFA to provide items for fundraising auctions. Employees like Childs participate in career days, job shadow programs, and exit interviews for high school seniors interested in agriculture.

MFA also contributes to the tax base. In Lafayette County, MFA pays $94,000 in property taxes and collects $150,000 in sales taxes. Multiply that times many of Missouri’s 114 counties, plus other counties bordering Missouri, and you get the picture.

Growing with the community

Serving farmers isn’t always easy. The agricultural economy rises and falls with weather, land and commodity prices and consumer demand. How does MFA continue to succeed? Nationally, according to the Center for Cooperatives at the University of Wisconsin, farmer-owned cooperatives continue to grow market share, despite declining farmer numbers and consolidation of ag industries.

“At MFA, we try to do the right things on our customers’ farms, and we try to hire the right people,” Childs said. “We have always built our business around our relationships with farmers and the community.”

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