Editor's note: MFA Oil, a sister cooperative of MFA Incorporated, is a separate business, but as long-standing ag-based cooperatives in the Midwest, the two companies share a common history. We print this story to help MFA Oil celebrate 75 years of business.

Farm roots helped MFA Oil grow from delivering kerosene to a multi-faceted petroleum and service cooperative.

MFA Oil Company was organized June 20, 1929. What a year for a beginning. The decade of the 1920s had been characterized by feverish post-war activity in industry and finance. Yet, who could imagine that in a few months the bubble would burst, throwing the nation's finances into disarray, disrupting farm markets and pushing farm prices to the bottom? Lurking on the horizon was the despair and disillusion of the 1930s...drought and ruin on the farm-depression and breadlines in the city.

Despite those dark odds, the new cooperative was a success. Progress was slow in early years. It was a struggle to maintain earnings, but each year showed steady increases in volume. Farmer-patrons had faith in the new venture.

The formula for success was simple. It's been repeated many times at MFA Oil Company: recognize-and fill-a need.

The founders of MFA Oil rightly saw the coming of age for the petroleum-powered machine-the auto, truck and farm tractor. It was a change that would forever alter the face and pace of America.

Gas power arrives

Through the '20s and well into the '30s, agriculture's use of fuel-powered equipment was largely confined to the steam engine. This monster, due to weight and inefficiency, was limited largely to stationary jobs-threshing grain and baling hay-supplementing the horse and mule power of the time.

Mobile gasoline engines were becoming more common on the road, but not until the 1940s did the relatively lightweight, rubber-tired farm tractor become a common and widely accepted part of the agricultural scene.

MFA Oil Company began business with two main products, kerosene and gasoline, which were transferred from the cooperative's small tank trucks to farmers' cans or barrels. The carrying can was an indispensable accessory for the tankwagon.

By the end of that first year, bulk plants were in operation at 25 locations, each financed by the sale of MFA Oil Company certificates to local members. During those early years, and in spite of the severely depressed financial and agricultural conditions, interest payments were made and a foundation laid for a growing cooperative.

As the decade of the '40s opened, the cooperative faced a formidable challenge. With the advent of World War II, product for domestic use became extremely tight.

MFA Oil transports hauled fuel from refineries in Kansas and Oklahoma, whenever and wherever it could be found. In May 1943, MFA Oil purchased a 1,500 barrel-a-day refinery at Chanute, Kan. Even this guaranteed supply only partially met the fast-growing demand members placed on their cooperative. MFA Oil continued to purchase nearly 60 percent of its fuel needs.

Post-war expansion

With the war's end, demand increased sharply. Patrons of MFA Oil Company tripled the gallons of refined fuels purchased through their cooperative between 1945 and 1950. The number of tractors on farms doubled from 1940 to 1950, and by 1954 there were more tractors in use on farms than horses and mules.

In 1948, the Delta Refinery at Memphis, Tenn. was purchased, adding a production capacity of 4,000 barrels per day. With the ownership and operation of the Memphis plant, a new Mid-South market area was developed. The acquisition provided substantial volume and contributed to overall earnings.

During the '40s, additives originally developed to improve the performance of military equipment were incorporated into MFA Oil products. Industry and the military ordered fuels, lubricants, motor oils, tires and batteries to specification. MFA Oil took the same approach to the products furnished to its members. This was a new approach in the cooperative's trade area and set new quality and performance standards.

The cooperative continued to build on its list of product and service "firsts." It was first with a heating fuel oil containing anti-rust, anti-sludge compounds; first with anti-rust ingredients in all farm gasoline; first with a multi-purpose grease for all farm uses; first to offer one fluid for all hydraulic systems; first to offer a line of heavy-duty farm batteries; first with motor oils built to meet major manufacturer's specifications; and first with a sludge-inhibiting diesel fuel.

Many of these products had been available only to industrial customers. MFA Oil took them to the lab, field-tested them and adapted them to the special requirements demanded for practical, efficient, heavy-duty farm use. Today, 50 years later, product quality continues to be monitored at laboratory facilities in Columbia, Mo.

Changing with its customers

Early in the '50s, petroleum supplies became more readily available. In 1955, when it became obvious that MFA Oil Company could more economically serve its members by purchasing its needs, the Chanute and Memphis refineries were sold.

By the mid-1950s, business volume exceeded $10 million, and refined oil volume topped 50 million gallons. The evolution of MFA Oil Company paced the revolution in farm technology.

Early in the '60s, MFA Oil Company made propane gas available to its patrons for home heating and crop drying. Today, more than 100 locations provide this product and service.

Also in the 1960s, MFA Oil began to market a full line of auto, truck and tractor tires, distributing them from warehouses in Springfield and Columbia, Mo. At these locations, the cooperative rebuilt and re-equipped modern, up-to-date tire retread facilities. Currently, tire volume exceeds $12 million each year.

Meeting the consumer

Through the '60s and '70s, MFA Oil service-station dealers played an important role in the company's growth. These dealer-owned-and-operated stations provided full auto service, along with quality products purchased from MFA Oil Company bulk plants and tire warehouses. Although there are fewer operating service stations today, they serve a vital role in the company's success.

By 1965, with refined oil volume exceeding 80 million gallons per year, MFA Oil Company was back in the refinery business, joining with five other farmer cooperatives in ownership and operation of National Cooperative Refinery Association (NCRA) at McPherson, Kan.

This venture proved to be highly successful.

Earnings and subsequent patronage from NCRA materially strengthened MFA Oil Company's financial position and helped make possible continued expansion of the cooperative.

The NCRA purchase set a pattern repeated when MFA Oil purchased another cooperative-an agricultural chemical company with plants in Shenandoah, Iowa and Albert Lea, Minn. This ownership was retained until 1989, when it was sold to Cenex/Land-O-Lakes.

Tougher times with energy crunch

In 1973, when the oil embargo and following fuel crunch hit, many oil companies abandoned the farm market. They saw more profits for their limited supply in the cities. The year before, MFA Oil, with an excellent financial position from which to work, had arranged a 5-year agreement with a major oil company for a guaranteed supply of product to supplement that provided by the NCRA refinery. And MFA Oil stuck by its farmer-members.

Then in 1976, MFA Oil, again joining with other neighboring cooperatives, formed Energy Cooperatives, Inc. (ECI) and purchased an existing refinery near Chicago, Ill. Shipments to members from that cooperative exceeded 1 billion gallons of gasoline and distillate products annually.

The initial management of ECI operations was marginally successful. However, by May 1981 two main factors had led ECI to file for bankruptcy: The government was not enforcing federal regulations that would guarantee access to crude oil for all refineries at competitive prices and Ni-Gas, a utility company, unilaterally cancelled its contract with ECI to buy a sizeable amount of products for use in the making of synthetic natural gas.

The bankruptcy court took more than 11 years to complete its consideration of the case. Meanwhile, the owners and unsecured creditors suffered big losses. MFA Oil Company's share of the loss was approximately $20 million.

Despite the loss, ECI had furnished a source of supply during a period of rapid expansion, and MFA Oil Company was strong enough financially that no members' equities were impaired.

In 1985, by mutual agreement, MFA Incorporated relinquished membership in MFA Oil's board of directors. Between 1946 and 1985, MFA had named half of the MFA Oil board members, and MFA Oil Company member-patrons had elected the other half at the company's annual meeting. Since 1985, MFA Oil has contracted with MFA Incorporated for use of the emblem. A close working relationship continues between the two cooperatives.

The age of convenience and brand

A new look emerged in the '80s as the company's business environment began to change. Government regulations were increasing, and modern technology made more fuel-efficient equipment available. Petro-Card 24 locations, convenience stores and propane operations were becoming more numerous.

MFA Oil acquired its first convenience store in Columbia, Mo., in 1983. With the purchase of Mid-State Oil Company in 1984, 42 more stores were obtained, and by 1986 another 20 stores were acquired.

In 1984, MFA Oil offered its first unattended fueling system, the Petro-Card 24, in Chillicothe, Mo. Currently, sales volume from Petro-Card sites exceeds 5.7 million gallons. A total of 169 Petro-Card sites are in operation, with two new locations scheduled to open soon. In addition to its unattended fueling service, MFA Oil expanded into the quick lube business in 1988, with locations in Jefferson City and Columbia.

The period 1981 to 2003 was a time of growth and expansion: net worth increased from $10.8 million to $86 million, and sales grew from $209 million to $550 million. In 1981, the number of bulk oil plants totaled 116, but in succeeding years several of them have been consolidated. Today there are 100 bulk oil plants in operation. Since 1981, the number of propane plants has increased from 24 to 112, and MFA Oil has partnered with rural electric cooperatives in seven propane LLCs.

Regional reach

MFA Oil now employs more than 1,600 people.

The cooperative has more than 40,000 farmer-members and is one of the 10 largest suppliers of propane in the nation. The company supplies fuels, lubricants and tires to customers in Missouri, Tennessee, Arkansas, Oklahoma, Kansas and Iowa and operates about 100 retail stores under the Break Time, Jiffy Lube, and Big O Tire banners.

To reinforce its continuing commitment to the farmer, the environment and America, MFA Oil now markets clean-burning homegrown fuels-biodiesel and ethanol-blended gasolines-throughout its trade area.

Molly Blanton is a marketing coordinator for MFA Oil.