On March 10, 2004, we at MFA will celebrate our 90th year of serving you, our farmer/owners. MFA's success over the years can be attributed to many things, but most importantly, we have always tried to maintain our focus on helping our customers be productive. We were formed 90 years ago to "provide economic benefit to our member/owners." That's still included in our corporate mission statement.

In view of that, MFA was quick to recognize the need for retail locations, feed manufacturing facilities, milk processing plants and a petroleum company. All of these operations were vital to successful farming operations and were created prior to World War II. To better serve our member/owners, MFA was an early participant in hybrid seed corn, an early leader in creation of farmer-owned fertilizer manufacturing plants, in purchase of oil refineries, in establishment of river grain terminals, in creation of the first Midwest soy processing plants.

MFA was, and is, an early adapter of custom application services, incorporating "not so conventional" feed ingredients resulting in outstanding performance, in evaluating and introducing genetically modified crops, and in pioneering precision farming management. MFA always has and will remain focused on agriculture and on providing economic benefit for our customer/owner. Because of that singular focus, MFA is the No. 1 ag supply and service business in our trade territory. Our market share continues to increase.

Many institutions and businesses (some far larger than MFA) have been left in the dust bin of history because they either never had that focus or failed to maintain it. Too many businesses tried to "out Cargill, Cargill." They took on too much debt and paid too much for businesses they had no business acquiring. Obviously, we have taken a more conservative approach. We're careful not to overextend ourselves with debt. As you are well aware, this company (like most cooperatives) finances itself one of two ways: through profitability and through taking on debt. We are not opposed to debt, as long as we satisfy ourselves that we can repay that debt in a short time.

We have grown our business the last few years through the formation of several joint ventures. We are always looking for more of those types of opportunities. With costs going up at the rate they are, and with margins being squeezed, we have to find more volume over which to spread those costs.

But again, our focus at MFA has remained on what we do best. There is no doubt in my mind that farmers look to MFA managers and store personnel for advice and for help in making buying decisions because of the quality of the people we have in the country. Each of these individuals represents MFA. I also believe that a high percentage of our customers rely on our knowledge, honesty, integrity and service to make their own personal enterprise more profitable.

Our focus on agriculture and practice of providing economic benefit to our owners led to the creation of MFA Health Track Beef Alliance. It's providing economic benefit for our beef cattle producers in a big way. Participation in MFA Health Track is increasing returns to producers in the $40 to $100 per head range. This past year we tagged the 100,000th calf-for an added value in the neighborhood of $50 million. Missouri is second in the nation only to Texas in cow/calf numbers. These producers represent a huge portion of our customer base. Corporately, we view this program as highly important to the industry. We do not want the cattle industry to follow the same path as did poultry and hogs. We even believe there is an opportunity to fatten cattle in our trade area in an environmentally friendly way. Today, even though hogs are in the hands of very few producers, we still focus on helping the independent producers who do remain. Our swine marketing network has proven its economic benefit for independent producers and continues to do so.

We also remain focused on precision farming technology and have provided groundbreaking leadership in this area. Rather than being a follower, MFA has been a leader in delivering this technology to our producers. We are a major force in our market area when it comes to fertilizer, crop protection products and application. We will continue to represent our customers well in this market.

The renewable fuel standards provisions of the new federal energy bill mandate the use of ethanol in gasoline. Nationally, we use 2.5 billion gallons of ethanol per year. This new legislation will double that use. As a result, an additional 12 to 15 million acres of corn will need to be planted just to meet increased demand. Because of our presence in the marketplace, we are well positioned to meet our farmers' needs through fertilizer, seed corn, crop protection products, expertise and application services.

Obviously this summer's drought will have a huge impact on the profitability of our farmer/owners as well as on our own this coming year. We cannot control that. We can, however, like the farmers who founded MFA, commit to work together in overcoming challenges that face agriculture. Together we can take advantage of opportunity. MFA has a very proud heritage of overcoming adversity. We have in the past. We will in the future-in partnership with our producers. Thank you sincerely for your support and your business.