LEADERSHIP LETTER

Over the past few years, the world has witnessed more uncertainty and disruption than we could have ever predicted. Volatility has become the new normal, impacting commodity markets, product availability, supply chains, monetary policy, and more. MKC has been at the forefront of adapting to these changes. However, our mission and vision remain the same.

Our mission is to create customer and partner success to provide a safe and sustainable food supply. Our vision is to partner with customers to successfully navigate the complexities of modern agriculture and industry. Every decision we make begins and ends with how it will impact the experience for our member-owners and customers. Our tagline “Shared growth. Shared success.” is tied to the purpose of MKC and is the intrinsic driving force that brings us to work every day.

Our growth mindset is important to keeping pace with our fastest-moving customers and partners. The size of farm and ranch operations has consistently grown larger and fewer in the past decades. That trend is likely to continue. Supply partners that provide products, resources, and tools to agriculture have grown in size during that time and seek to find retailers with engaged employees that can impact markets. MKC is committed to moving at the pace necessary to be a relevant cooperative for generations to come. Investments in assets, talent, and technology will enable MKC to move quickly as the pace of change continues to accelerate.

Reflection

The grain, agronomy, and energy business units were profitable again for 2023. Business unit profitability enables us to invest back into assets and growth. Past investments have allowed your cooperative to be well diversified.

On May 16, 2022, MKC completed the unification with Progressive Ag Cooperative (PAC). This strategically grows the MKC footprint an additional 12 locations in south-central Kansas. We are well-positioned to service this market. These locations surround the Sumner County Grain Terminal.

The future of the MKC grain business is strong. Recently, we broke ground on our 3rd rail loading asset in Rice County. This type of investment improves speed and space in the area locally and gives your grain access to markets domestically and around the globe. We anticipate this project to be completed in the summer of 2024.

To further this investment, in April 2023 MKC announced our expansion of Producer Ag, our grain logistics and marketing joint venture with CHS. This will allow us to maximize the value of an end-to-end cooperative supply chain in the Southern Plains. This development will expand market access and patronage-eligible options to maximize owner value by connecting area farmers and cooperatives with end-use markets and customers.

In May, MKC launched the first agricultural apprenticeship program in Kansas. The program is designed to provide on-the-job training and technical instruction to employees hired into specific entry-level operations positions. This apprenticeship program formalizes the training and opportunities for career growth that have existed at MKC for years. Clarifying our commitment through this opportunity provides people, with or without agricultural experience, a path to a rewarding role in our organization.

Investments

Asset renewal is critical as MKC strives to serve memberowners’ needs well into the future. Our board of directors and leadership team work hard to anticipate the needs of farmers and ranchers not only today, but perhaps more importantly, well into the future. We continue to assess what assets need to be built, where improvements need to be made, and which assets have outlived their usefulness to our customers. These are all difficult decisions that are not made lightly as we consider how to position your cooperative for future generations.

Investments in technology are essential to how we transform our business in the future. It’s easy for all of us to think about technology in terms of robotics, drones, and autonomous vehicles. MKC is investing in all of these to be ready for when they all are commercially scalable. These are the investments that will help us serve our customers more efficiently in the future. Technology allows us to create a better, more consistent, customer experience through the continuity of processes and how you access information about your operation and the business you do with MKC.

We are utilizing robotic process automation (RPA) to create quicker, more consistent data collection and processing in back-office functions. This reduces errors and gets information back to you quicker and with more consistency. This technology helps us create more ways for you to do business with MKC and access your information. MKC Connect has over 1500 customers using this new technology in a year’s time from when we introduced the App. We are investing in these technologies so we can move at the same pace as you, our member-owners and our customers.

Strategic Partnerships

As we reflect on the rapid pace of change in agriculture, it becomes increasingly clear that partnerships and alignments are essential for long-term success. The challenges we face today require a collective effort and a forward-thinking mindset. Our commitment to partnership and alignment will continue to guide us as we navigate the complexities of the agricultural landscape.

In our leadership letter in the 2021 Annual Report, we noted, “MKC will continue to explore and invest in partnerships to help successfully navigate the complex world of agriculture. Our future alignment strategy to serve member-owner needs will continue to be more vertical in nature.” These words continue to guide our actions today.

Our partnership with CHS on three shuttle loader facilities and the expanded Producer Ag joint venture is one way we are vertically aligning partnerships. This allows us to serve our member-owners and customers in a unique way.

One of the significant advantages of our joint venture with CHS is the expanded access to global markets. As we navigate an increasingly interconnected world, international trade plays a pivotal role in the agricultural industry. Through our partnership, we gain enhanced market intelligence, insights, and networks that allow us to connect member-owners to a broader range of international buyers and consumers.

By tapping into these world markets, we can help our member-owners expand the reach of their grain, diversify the end-user customer base, and capitalize on emerging opportunities. The global perspective offered by our partnership allows us to stay ahead of market trends, anticipate shifts in demand, and position our memberowners for long-term success.

Vision for the Future

At MKC, we firmly believe that alignment is the key to unlocking new opportunities and propelling the agricultural industry forward. The challenges we face today require us to think beyond traditional boundaries and seek partnerships that offer diverse expertise and shared visions. By aligning ourselves with organizations that share our values and goals, we can multiply resources, leverage synergies, and create a collective impact that surpasses what any single entity could achieve. When done right, there is stakeholder value created for our member-owners, the communities we serve, MKC and the aligned partner(s). This brings us back to the heart of our tagline “Shared growth. Shared success.”

We know that to remain successful for future generations we must focus on market relevance, asset renewal, talent, technology adoption, competition, and the farmer of the future. Market relevance is more important than ever in this type of environment. MKC needs to be relevant to our employees, strategic partners, and you, our member-owners and customers. The MKC Board of Directors and leadership are continually looking at what assets are needed. Our strong financials position us well for future opportunities.

Implementing the right technology allows us to be more profitable, efficient, and safe. The alignment with CHS brings forth cutting-edge technology and innovation. It is essential to embrace the latest advancements to stay competitive. We gain access to state-of-the-art technologies that will revolutionize our operations, enhancing efficiency, productivity, and sustainability across the board.

We aspire to be an employer of choice. Attracting the best talent possible, providing development and training, and ultimately creating career opportunities for those team members is a core objective for MKC. If we don’t have bestin-class talent, we cannot deliver best-in-class service and remain relevant to you. Agriculture is a dynamic industry, and it requires skilled individuals who can adapt to the evolving demands. The partnership with CHS offers our memberowners access to a wider talent pool, fostering knowledge sharing, professional development, and career growth opportunities. This is an additional development opportunity we can provide outside of the many leadership development programs MKC already offers today. By attracting and retaining top talent, we ensure that our cooperative remains at the forefront of innovation and success. We must continue to invest in our greatest asset, our people.

MKC strives to make certain we have the products, resources, and tools available to our member-owners when you need them. If we don’t add value to farmers and ranchers to make them more efficient and profitable, our role as a cooperative is unfulfilled.

Thank you to our team of employees for the dedication and passion to serve our member-owners and give back to the communities that we serve. Thank you to our strategic partners for working together to create opportunities that neither of us alone could achieve. But most of all, thank you to our member-owners and customers for your business and support. We will continue to work hard every day to earn that business now and in the future.

Shared growth. Shared success.

ALLAN WEGNER CHAIRMAN BOARD OF DIRECTORS BRAD STEDMAN PRESIDENT AND CHIEF EXECUTIVE OFFICER

Elected by their peers, these individuals collectively leverage their expertise to provide important direction and ensure the safety and soundness of the finances of the cooperative. Board members are farmers and ranchers themselves and have a deep understanding of the challenges their fellow member-owners face each and every day. Detailed biographical information on the MKC Board of Directors is available at mkcoop.com.

Board Of Directors