WFS

Snow, snow, and more snow. Old Man Winter just doesn’t want to go away! His unpredictability is much like how we view the input markets—we just never know which way they’re going to go. With all the volatility in the fertilizer and energy markets over the last several years, having producers sign contracts to commit to the purchase of product has become a new trend for almost all retailers. Producer contracts help retailers purchase product more accurately and help mitigate the risk of getting stuck with high-priced product at the end of the season. Having a producer make a commitment by signing a contract can also ensure we will have enough product in place to service our producers’ needs. Without a contract, that may not be the case. Although producers are having a hard time warming up to this idea, you have to understand that it’s a two way street. By locking in the price of your inputs with a contract, you are able to better determine what your bottom line will be at the end of the season, as well as protect yourself from huge fluctuations in the markets—it’s a win-win situation for everyone.

Contracts have been a part of doing business in the grain industry for many years for this same reason. Grain markets tend to fluctuate quite a bit, and when you, as a producer, see an opportunity to make a sale that will generate profit in your operation, you jump on it. You may not always hit the high, but you generally lock in a price that can earn you a profit.

This leads me to how we can put these two things together. I’d like to encourage you to think about locking in at least a portion of your grain and your crop input costs if you can reach a margin you’re comfortable with. By locking in both your grain and your inputs, you’re able to know exactly what your profit potential is. Our GPPS and field marketing staff can help analyze this with you. I encourage you to give them a call.

If you’re not already aware, we have been posting our spring prepay fertilizer prices on our Web site. Just click on this link for current pricing: Spring 2010 Prepay Fertilizer Prices. Fuel and propane prices are also posted and can be found at this link: Energy Pricing.

Snow puts added stress on delivery staff
As I talk about Old Man Winter, he has certainly put a lot of additional stress on our delivery staff. Even though weather conditions are not ideal, our feed and energy delivery personnel, as well as our transport drivers, are counted on to make much-needed deliveries. We’ve had several circumstances where employees have been injured or have gotten stuck while making those deliveries, so we ask that you be diligent in removing snow from around your LP tanks and feed bins to ensure the safety of our employees and the timely delivery of your product. Thank you!

Piles disappearing
The piles of corn you saw at our elevators at the end of harvest are now almost gone. With 1.3 million total bushels on the ground, the piles were located at Easton, Clarks Grove, Welcome, Northrop, Winnebago, and Dolliver. The piles at Easton, Clarks Grove, Welcome, and Northrop have been picked up with minimal damage, while the pile at Winnebago is quickly dwindling with approximately 50,000 bushels left. It too, had minimal damage. Dolliver’s pile is at 400,000 bushels and, because of a good aeration system, is in the best shape of all. We continue to haul it directly to market with absolutely no discounts.

The fear of getting “BIG”
As a manager, it is my job to provide a vision for this company and to act upon that vision and follow it through. I’ve been very upfront in the fact that the board and I are looking to grow this company. How fast that will happen is hard to say. One never knows when an opportunity may arise—it may be tomorrow, next month, or even next year. However, when that opportunity presents itself, we must not be afraid to move forward.

The word “big” seems to have a negative connotation when it comes to talking about your cooperative and many fear that WFS is already too big. We have to get over this fear of getting bigger. A company is built on relationships—not size. Just because we may acquire more assets does not mean we will lose touch with our customers. We will still have the same employees, services, and products you’re accustomed to.

Just as our tagline states, working for farmers’ success is our ultimate goal. However, in order to work for your success, we must be financially successful as a company. We cannot provide our customers with value and service if we are not profitable. Efficiency drives profitability and profitability enables us to invest in the assets and rolling stock we need to service our customers effectively. Growth can help us achieve this goal. The efficiencies and buying power we gain through growth can help both of us be more successful.

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