Once again, we find ourselves on the cusp of a new crop year in Southern MN and Northern IA. Since the last Connections publication, the remaining questions about crop year 2024 have been answered as well as questions around the 2024 election cycle and broader macroeconomic trends. All along, your cooperative, Central Farm Service, has been watching these dynamics and positioning for how 2025 begins to evolve. If the remainder of 2025 is anything like the first few months, it will certainly remain a dynamic year. Many of the CFS patrons are relieved to see 2024 in the rearview mirror. The early and late weather challenges are well documented and discussed, and there is excitement about getting back to some rendition of ‘normal’ in 2025. CFS concluded another solid fiscal year in 2024 with over $14M in local earnings against $791M of sales. The result was another strong year of cash patronage payout, equity allocations, and equity retirements for CFS patrons. Looking forward, the expectation is for fiscal year 2025 to look quite different at fiscal year end in August 2025 – with much of the reason for this stemming from the back half of calendar year 2024 and how that crop year and the fall season went. Yields were mostly well below average in much of the CFS geography resulting in significantly lower grain volumes into the elevators, less fertilizer application, as well as almost non-existent LP demand for drying. Nonetheless, CFS management remains committed to stewarding your assets efficiently to drive the best possible financial results given the uncontrollable forces in play. The forces beyond abiotic stress (weather) are certainly worth mentioning right now. The newly inaugurated elected officials in America wasted no time in implementing changes to existing policies and legislation. The topics making near-daily headlines and therefore impacting markets daily include tariffs, trade negotiations, technology regulations, labor and immigration, government spending (mostly reducing this), lingering inflation, interest rate policy, and environmental policy.
Each one of these topics has a tremendous impact on how our commodity markets move, and thus our livelihoods in agriculture. This requires us all to be ever vigilant for signals to change and meet whatever new opportunities or challenges emerge. At CFS, we are always excited to evolve to help our owners navigate the future. We are committed to connecting patrons to world markets with the best available market intelligence, supply security, and ultimately service in our space. At CFS we aim to be your consistent source of Trusted Service and Cooperative Value regardless of what is happening with weather, macroeconomics, or the political arena. We continue to look at how we conduct our business every day with the patron owners at the center of our minds. We are humbled to represent our owner base in industry groups, associations, and in front of elected officials. We continue to invest in technology to give our patrons more ways to conduct their business seamlessly and quickly. We are interested in making further investments in speed and scale at key facilities that drive the collective critical mass of the patrons’ operations together in true cooperative spirit. We are evaluating other facilities as they age and asking critical questions about ongoing investments in repairs & maintenance or capital expenditures. We are excited to think about what the CFS patron of 5-10 years from today needs and to act accordingly with future decisions on the cooperative’s assets. As crop year 2025 develops, CFS is excited to be a part of your operation. There is no doubt that we will together find clarity on more macroeconomic trends while leaning into new opportunities as they develop. We strive to be dependable trusted advisors while navigating markets and technology. Thank you for the opportunity to serve you each day and thank you for your business!
Sincerely,
Chief Executive Officer
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