MFA should post in the neighborhood of $5 million in profit for this past fiscal year. I'm proud of our people's efforts to achieve that number. Certainly, compared to many of our sister cooperatives, the number is impressive. But that's not the profitability a cooperative of this size should be able to generate. We cannot be successful when our farmer/owners are under such financial stress. Make no mistake. There is adversity today in agriculture. Just because everyone predicted these abysmal prices over the last two years doesn't make low prices any easier to bear. Agriculture is in an economic slowdown so lengthy that it threatens the survival of many in the industry, from individual farms to the institutions that serve them. Almost across the board, sectors of agriculture are taking direct financial hits.

But U.S. agriculture will prevail. U.S. agriculture is strong and resilient. I am not alone in my belief that American farmers and ranchers are the backbone of this nation. I know that our agriculture is the envy of the world. We will continue to produce the finest products and feed our nation and the world in spite of the odds and in spite of the adversity facing our industry today.

Grain prices remain in the cellar. I don't even want to mention hogs. And dairy is staggering under milk prices that are at their lowest levels in 10 years. As the Missouri Dairy Association notes, only three times in the last 25 years have dairy prices been this low. Add in the effects of drought, and you have a dairy industry under siege. As of this writing, there was no word on the Missouri Dairy Association's efforts to alter the Market Income Loss Contract for the benefit of the state's dairy farmers. I wish them success.

USDA's August crop report predicts little relief in the near future. The nation's wheat and soybean production is expected to be down 300 million bushels, each. Corn production is forecast down a billion bushels under planting expectations. Unrelieved drought, complicated by the tremendous wildfires of the West, has burned up hay crops, forcing the federal government to allow emergency CRP haying and grazing. Simultaneously, parts of the nation suffered severe flooding. Many people pointed to federal crop insurance. Crop insurance is suitable in many instances, but when you farm the fertile and productive bottomland, crop insurance can be non-existent or cost prohibitive. And in many ways, federal crop insurance is inadequate in allowing farmers to fully recover losses due to weather disasters.

Other critics point to the record numbers in the recently enacted Farm Bill and say, "No more." What they fail to comprehend is that Farm Bill payments are tied to yield as opposed to production. Price is insignificant if you don't have grain to sell. It's a safety net for those facing low prices, not those facing crop disasters. That's why, unfortunately, we cannot do without emergency disaster payments at this time.

Fortunately, President George W. Bush instructed Ag Secretary Ann Veneman to release $750 million nationwide in direct relief payments to farmers and ranchers suffering from weather-related disasters. Those payments will provide immediate (and direct) cash assistance for losses suffered in 2001 and 2002. In addition, USDA authorized a $150 million feed assistance program to help cow/calf operators. While the federal government responded, state governors declared counties to be disasters. All of the above governmental efforts are welcome, but short-term, solutions.

What is necessary to help agriculture get back on its feet is a coherent national farm policy. Our nation and our agriculture suffer as a result of that lack. Many in agriculture continue to point to expanded free trade as the remedy that will restore profitability. I will not disagree that unfettered free trade would be good for agriculture. But we don't have free trade. As even Farm Bureau points out, while the United States imposes an average tariff on competing ag products of 12 percent, U.S. products, in turn, face a global tariff average of 62 percent. We cannot continue to make concessions worldwide while requiring nothing in return. It is a recipe for failure. As I have said before, a farm policy that substitutes disaster payments in lieu of meaningful farm program structure is destined to fail. Emergency assistance is no substitute for sound policy.

However, we must always remember these conditions will not last. Our agricultural forefathers weathered similar storms and emerged stronger. We will too. Now is the time to work on frameworks and structures so that when the economy brightens we will all be prepared. We have lived that philosophy at MFA. We have continued to streamline our infrastructure. We have continued to fine-tune our programs and offerings. The result is a cooperative structured to be profitable on its own operations. That's why, in spite of all the above-listed adversity in agriculture, we just concluded a profitable year. For that I extend my sincere thanks to our customers. I also want to recognize our outstanding store managers and their employees, salespeople, technical support, corporate and support staff. These are the people who are MFA.