Working together to succeed together … the best way to win!

Dec 26, 2022


Looking back on 2022 at Federated
For 2022, across our territory it was extremely dry on many farms and fields. One comment I heard from a grower, stated in jest, “Been farming for decades. Never knew you could grow a crop without moisture.” Lack of moisture was a headwind that many faced this year. On a positive front, I heard many growers had better yields than they planned, even with the dry conditions.
 
We also had cost pressure as inflation continued to be a headwind for all businesses. Last year at this time I discussed the increases on wages, health, fuel, equipment, parts, and the commodities we sell to you, our patrons. This past year we continued to have cost pressure and we had challenges sourcing products, as well as new employees. In some cases, we sourced an alternative solution for your operation so you would have products to execute your plan. This is a great example of working together to succeed together.
 
The big bet in 2022 was moving to a new computer system [Merchant Ag] to run our business. We had some challenges, but overall, it has been very beneficial, helping us make smarter decisions and become a better partner. Any time there is change, there could be frustrations. I know some of you were frustrated with our new statements initially; the feedback is more positive now. Also based on your feedback, the online statements have benefited many. If you haven’t gone online to set up your account, I would encourage you to do so. Thanks for working together to succeed together.
 
The coop is positioned to deliver our plan for 2022. With the retail price of ag inputs, propane, and fuel we will have record sales as a co-op. Our agronomy business will be on plan, our energy business added over a thousand new tanks and will deliver plan. Like all business, price is important, but safety and service are critical for this business.
 
With the support of your board of directors we spent over $5 million on capital projects to upgrade the fleet, equipment, buildings, and make investments in automation. These investments made a big difference in both service and helping us be competitive. These investments also created a better work environment for our employees. Our retail business, convenience stores, country stores, and lumber yard saw increased traffic as more people were commuting and traveling again.
 
As we move into 2023, we will use our learnings to continue to drive efficiencies to become an even stronger partner with your operation. I have had the good fortune of leading the team at Federated for just over seven years now. I have learned a great deal, but I know I have more opportunities to get smarter. You have a great team of employees that are laser focused on you, the patrons, because we know if we work together, we will succeed together.  I am so proud of the team and grateful every day for their commitment and dedication.
 
I have one ask of you the patrons: What can we do together so we can succeed together? The co-op system is stronger if we work together. I hope you felt that benefit this past March as we returned $3.3 million in patronage at 100% payout to you, the patrons. The co-op was established to meet the needs of the patrons, so any feedback is welcome. Please reach out to me if you have any thoughts.
 
On behalf of your board of directors and the 290 employees at Federated Co-ops, thank you for your patronage. I look forward to working together to succeed together for years to come.
 
Stay safe and healthy. Merry Christmas and Happy New Year!
 
Mike McMahon
CEO, Federated Co-ops
 

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