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Annual Meeting 2018


Story and photos by: Glen Liford, Chris Villines, Sarah Geyer, and Allison Parker 12/31/2018

With the theme, “It’s Your Business,” Tennessee Farmers Cooperative’s 2018 annual meeting provided the Co-op’s directors and member managers with opportunities to hear how the business had performed during a challenging year, and how a host of new challenges will require even more cooperation and vision to ensure the business’ continued success.

The two-day event was held on Sunday, Nov. 25 and Monday, Nov. 26 at the Gaylord Opryland Resort & Convention Center in Nashville. More than 650 directors, managers, employees, spouses, and special guests attended.

The Co-op’s impressive 2018 financial results were tempered with cautious optimism as Co-op leaders quickly recognized the transformational market changes occurring in the agricultural industry and the serious challenges farmers will face as they work to find their place in a highly competitive business. “It’s Your Business” summed up the strength and stability of the cooperative’s mission as Co-op relies on the power of cooperation in developing creative solutions to new situations that will occur as the result of these changes.

Thompson suggests diversification as strategy

TFC Board Chairman Mark Thompson began his remarks with a personal story of how diversification played a role in his own farming operation’s success. The innovative farmer started in the hog business more than 35 years ago and has added produce to traditional pursuits like tobacco, corn, hay, and beef cattle.

“By diversifying, I’ve opened myself up to a whole new group of customers and expanded my revenue stream,” explained Thompson. “I want to do all I can to make sure ‘my business’ stays relevant.”

The TFC board of directors, he said, has pursued a similar strategy to “strengthen the Co-op system for today, tomorrow, and beyond.”

As one example of this strategy at work, Thompson cited a two-year agreement that Co-op has to manufacture six wildlife minerals, attractants, and feeds under the Mossy Oak brand that will end up in over 2,500 Wal-Mart stores nationwide. The agreement has allowed Co-op to maintain manufacturing tonnage at its feed mills for greater efficiency. Additional toll milling manufacturing agreements with other companies further added to the mills’ efficiency.

Other examples included:

•    The Alliance Farm & Ranch procurement agreement with TFC, Alabama Farmers Cooperative, and Faithway Feed Company to pool the companies’ buying power to reduce costs to benefit Co-op farmer owners.

•    The formation of GreenPoint Ag in 2013 as a joint venture of TFC and WinField United to enhance the Co-op’s agronomy offerings to supply member Co-ops and subsidiaries with seed and crop protection products.

•    The development of Co-op Financial Solutions (CFS) to manage accounts receivable and credit services for the system.

“Every growth and diversification venture we’ve undertaken has been carefully thought out, talked out and, in some cases, debated passionately before it became reality,” he said. “In any board setting, at the TFC or county level, you’ve got to be skilled at looking at the big picture from the perspective of a farm operator and a Co-op farmer owner. What are those opportunities that benefit both parties?”

Generous bidding aids Tennessee 4-H and FFA programs

Another highlight of the annual meeting was the return of the “Co-op Auction Barn.” Attendees placed bids on numerous silent auction items, with the funds raised benefiting the state’s FFA and 4-H programs. There were a wide variety of products including items from Co-op, Stockdale’s, and other contributors including unique items made by Tennessee craftspeople.

A special group of items, including Co-op antiques, was reserved for a live auction segment at the end of the day’s activities on Sunday, Nov. 25. Presided over by auctioneer John Houston, TFC’s Feed and Animal Health sales manager, the live auction successfully generated more than $5,500 in sales alone. The silent auction concluded early Monday morning, and when the final tally was complete, $14,360 was raised for the benefit of youth who participate in Tennessee 4-H and FFA.

Newsom gives ag market analysis

As someone who has spent 30 years analyzing agriculture, Darin Newsom has a keen insight on the cattle and commodities markets. He shared this in-depth knowledge with Co-op farmer owners at an Ag Insight Workshop held during Sunday’s annual meeting festivities.

Covering the soybean, corn, wheat, cotton, dairy, and live cattle markets, Newsom said a key to understanding them is less about the “Why?” and more about the “What?”

“Every market has two sides, the commercial and the non-commercial,” said Newsom, a regular analyst on Iowa Public Television’s “Market to Market” program. “How do we know at any given time what these groups are thinking? That’s the tricky part.”

In his presentation, Newsom evaluated the trends of market structure, reviewed the trends of futures, and looked at long-term monthly charts as well as intermediate weekly charts.

“Trend is nothing more than price direction over time — up, down, and sideways,” he said. “It’s the trend of the future of the price differences between contracts. That is what tells us what the real supply and demand situation is.”

‘Why not us?’

TFC CEO Bart Krisle opened his motivational message at the annual meeting with the inspiring story of Blake Leeper, a paralympic athlete born without legs. In spite of this disability, the world-class athlete has excelled in competition against runners without disabilities, and hopes to compete in future Olympic games. His turnaround came as a child when he was asking himself, “Why me?” The young man turned the question around and asked, “Why not me?” and his change in attitude has fueled his success.

Krisle shared the tale of triumph as inspiration for all those working in agriculture.

In spite of all the bad news in the industry, he offered insight: “Agriculture is not in decline,” he said. “A growing world population needs a highly efficient and productive agriculture industry. What we are experiencing is transformation.”

The changes in the marketplace will indeed shape how Co-op does business going forward, but agriculture is not alone is confronting these obstacles, he stressed. Similar trends are emerging in other retail sectors.

While increased competition from Amazon gets much of the blame, he said, root causes go much deeper and include companies with heavy debt loads, failure of businesses to recognize changes in consumer buying preferences, and the “middle class squeeze,” where consumers have experienced decreases in income and increased expenses like education, healthcare, and housing.

“TFC is strong financially, and now is the time to look at what opportunities may exist to improve efficiencies and enhance the return on your equity and service offerings,” said Krisle. “We will consider joining with other companies on joint ventures and mutually beneficial projects when it is appropriate. We’re constantly looking at opportunities and searching for ways to conduct our business better. It is important for you to know that we evaluate opportunities primarily on three points:

1. Does it benefit the member Co-op and ultimately the farmer owner?

2. Will it make us more efficient and profitable?

3. Does it improve our operations?

“There’s a lot of turmoil and changes taking place in the ag industry we operate in,” Krisle added. “However, I believe we can find solutions and adapt our cooperative businesses if we take the same approach that Blake Leeper did when he asked, ‘Why not me?’

“In the coming years, some Co-ops are going to struggle, but some are going to thrive. Let’s be in the thriving group. Why not us?”

Your operations report

“Our job at TFC, in conjunction with our members and associate

members, is to offer products and services that will allow you to make informed decisions and farm profitably, regardless of whether it is corn, beef cattle, cotton, dairy, vegetables, or some other agriculture product you produce,” said Chief Operations Officer Jim McWherter. “We must continue to explore new ways, new markets, and new paths to remain relevant.”

What is driving us to success?

Successes

•    Maintained feed mill volume through attracting new customers like Manna-Pro, Whitetail Institute, Mossy Oak, other

    independent feed companies.

•    Exploring opportunities in toll milling and manufacturing of specialty products like wildlife products.

•    Positioned Co-op premium feeds and minerals, liquids, tubs, and         blocks as elite products.

•    Offered wide selection of qualified items for producers using the Tennessee Ag Enhancement Program. The program has improved management practices on the farm and allows producers to invest in assets that provid safety for the animal and the producer, improve genetics, and increase quality of hay and feed programs.

•    The Incompass Ag Technology platform provides ag technology to growers. This innovative and all-inclusive precision ag program brings together multiple points of farm data and analysis tools to help growers use crop inputs more efficiently and maximize yield potential. At the foundation of the program, EFC Systems’ FieldAlytics program enables a wide range of farm level data to be collected and managed to help growers make more about crop inputs. This includes soil test and yield monitor data, satellite and drone imagery, as well as a field scouting program using a GPS-enabled iPad to record in-season observations.

Market drivers

•    Dramatic decline in dairy business — expected 6,000 to 8,000 reduction in cow numbers by end of 2018.

•    Consolidation in the marketplace.

•    Increased competition from e-commerce and other providers.

•    Demand of customers for e-commerce options from Co-op.

•    Low unemployment rate poses obstacles for staffing for TFC,             member Co-ops, and farmers.

•    Vertical integration in farming and agribusiness.

•    Decline in horse numbers and changes in preferred types of horses.

•    Increase in commodity-blend diets being fed to livestock.

•    Slight increase in beef numbers to around 1.8 million cows and calves.

•    Consumers want more information on where and how their food is grown.

•    Consumers want assurance that our air, water, and soil are not compromised by farming practices.

Co-op 4-H and FFA knife donation

Officers of Co-op’s regional manager associations along with representatives of W.R. Case & Sons Cutlery present $34,320 to state 4-H and FFA through the sale of Co-op’s 2018 commemorative knife. From left are Luke Love, State FFA President from Rutherford County; Maury Ford, W.R. Case & Sons Cutlery; Will Dalton, State 4-H Council President from Grainger County; Matthew Horne, Greene Farmers Co-op; Randy Stubblefield, Williamson Farmers Co-op; Scottie Sadler, Macon Trousdale Farmers Co-op; and Joey Caldwell, Tipton Farmers Co-op.

 
 
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