MFA celebrated its 90th anniversary this past March. Not many companies can make that claim, especially regional agricultural cooperatives like MFA. So why has MFA been able to survive and thrive in the difficult economic environment, when several others, much larger, have not? First of all, most of the others got themselves in trouble by making bad decisions, venturing into businesses in which they had no expertise and by taking on entirely too much debt.

So what have we done differently? I truly believe it is because this company has never lost sight of why it was formed in the first place 90 years ago. MFA was formed for one purpose, and that purpose was to provide economic benefit for our member/owners. That continues to be our mission today.

We have focused, too, on our balance sheet and have built strength in the last few years. We have increased our permanent capital by making wise acquisitions in new markets with a relatively low equity infusion and subsequently generating outstanding returns on those investments. Our investments into several joint ventures have also been very rewarding. Those joint ventures include Hyman Farm Service in Texas and New Mexico and Cache River Valley Seed in Cash, Ark., to name a few. We also work closely with our farmer/member board of directors on business decisions.

Our theme for this year's annual meeting is "Celebrating the past; building the future." I invite all of you to come to Columbia and be part of our annual meeting. It is scheduled for Nov. 30, 2004, at the Holiday Inn Select Executive Center. As our theme indicates, we can celebrate the fact that we have served our member/owners for 90 years. But what about the future? How do we position, build and structure this company to make sure it lasts at least another 90 years?

"It is not necessary to change," said the famous business analyst W. Edwards Deming. "Survival is not mandatory." In other words, if we plan to survive, all of us in agriculture must adapt to the changing dynamics of the marketplace. We are all aware of agriculture's changing dynamics. It doesn't matter if we like the changes; we must adapt to these changes to maintain long-term viability.

What are these dynamics? MFA and our customers feel the economic pressures of consolidation and structural changes. For MFA, those changes are occurring in both our customer base and in our supplier base. We feel the pressure of increasing overhead costs, including health insurance, workman's compensation insurance and retirement funding. We have seen property and casualty insurance premiums skyrocket. Regulatory compliance costs continue to rise. Technology comes with significant price tags. Look, too, at what has happened to dairy cow numbers and independent swine producers. You get the point. None of us in agriculture can continue to perform as we always have and expect to survive in the future.

During this last fiscal year at MFA Incorporated, we have tried to envision what MFA should look like in 5 years, in 10 years. From these discussions we drafted a vision statement. MFA's core strengths are in the crop and livestock sectors. Therefore, it only makes sense that we capitalize on these core strengths. We will continue to look for opportunities in those areas. We need to make sure we align ourselves with leaders in research and technology who are producing the leading-edge products. We need a system that allows flexibility in how we go to market and how we serve our customers. We need to drive costs out of the system. We are blessed with an outstanding group of talented employees, and we must continue to develop and train them to be leaders in agriculture.

Our vision is expressed in terms of retail: "In our current trade territory, MFA will be the premier retail input supplier, grain originator and livestock marketing service that operates at targeted levels of return, while at the same time, focusing on expanding into new, selected markets on a limited basis." In our overall business, we will always conduct ourselves in accordance with our corporate vision: "MFA will embrace ethical business practices, will provide value to our farmer/owners and will operate at targeted levels of return."

We must continue to focus on why we were formed. Here at MFA we are passionate about providing economic benefit to our member/owners. Like any business, we must continue to add to our bottom line. But unlike investor-owned businesses, we are also obsessed with the bottom lines of our customers. Our offerings must return profit to the cooperative and to the customer. One of our most visible examples of this philosophy is MFA Health Track Beef Alliance. Health Track enhances the bottom line of MFA. But equally important, MFA Health Track adds value for our beef customers. We have proved it. We have the data. Health Track underscores why MFA was formed. So do our seed programs and our precision ag programs. In fact, all of our programs are structured in this fashion.

Yes, the business environment of agriculture is challenging. But like you, we are optimistic about agriculture. The world's population continues to grow. People need to eat. As long as that situation exists, MFA and our farmer/owners will play a key role in providing goods and services to the United States and the world.