November 26, 2020

Polishing the Crystal Ball

Keith HeimBy Keith Heim, CEO

A leader has been defined as someone who is at once a historian, a contemporary analyst, and a prophet. MaxYield’s leaders assume all of these roles when we look to the next six years and try to determine how your cooperative fits into this outlook.

There’s no doubt we’ve been through some really good times in agriculture in recent years. In fact, we have a lot of younger and newer team members who’ve never seen anything but boom times in farming. One thing history teaches, however, is that farming is cyclical.

Remember when one of the hot topics of the early 1990s was the shift to the global market? We’ve arrived, and we’re competing in this global market.

Another major change came with the ethanol boom that started around 2001-2002. This transformation for ethanol production ramped up corn usage by 5 billion bushels in a relatively short period of time.

In response to increased grain demand, 150 million acres have been brought into production worldwide in the last 8 to 10 years. That’s nearly the same amount we plant to corn and soybeans in the United States each year. Looking ahead, there are potentially 300 to 400 million more acres that could come into production globally.

Building on financial strength

These increasing acres (and potential acres) coming into production have neutralized the “ethanol effect” to a certain degree. In today’s world of declining commodity prices, skyrocketing energy prices, and uncertainty, we need to operate MaxYield accordingly so we can stay ahead of these changes.

MaxYield has never been stronger than we are today, and your board of directors and management are committed to keeping it that way. Be confident that your prepay dollars and deferred grain are safe here.

By maintaining our financial strength, we can seize opportunities when they come along. This is a powerful position to be in, and it hasn’t always been the case in MaxYield’s history.

As I’ve shared this outlook with MaxYield’s senior team leaders and our team members, I want everyone to know that we’re in this with our clients for the long haul, no matter what the shift in the ag environment brings us.

Thank you for the trust you’ve placed in MaxYield. While we don’t have a crystal ball to predict the future, rest assured that we’ll continue to work together to help you and MaxYield succeed, both now and in the years to come.

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