Bottom Line | Winter 2022-2023

Winter 2022-2023 A publication from MRGA

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A SUCCESSFUL 2022 RECAP A YEAR IN PICTURES STRIVING FORWARD MAKE IT GRAIN HOW SWEET THE GROUND NEXT LEVEL FINANCIALS TECH TRAFFIC PHOTO CREDIT: DUSTIN BIRCHEM

BARNESVILLE

CASSELTON

DILWORTH

KRAGNES

BARNESVILLE 218-979-4160

LEONARD 701-645-2334

ROTHSAY 218-979-4161

CASSELTON 701-347-4465

LYNCHBURG 701-347-5487

SABIN 218-789-7482

DILWORTH 218-287-2375

PEAK 701-845-3975

KRAGNES 218-233-4247

PROSPER 701-282-4094

LEONARD

THIS ISSUE: PAGE 2 - A Successful 2022 Recap

STAY CONNECTED!

www.mrga.com

PAGE 3 - A Year in Pictures PAGE 5 - Striving Forward PAGE 6 - Make it Grain PAGE 7 - How Sweet the Ground PAGE 9 - Next Level Financials PAGE 10 - Wellness Update PAGE 12 - EXCITING Tech Traffic

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LYNCHBURG

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PEAK

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successful

2022 RECAP

It has been three years since the start of the lease agreement with Valley Ag Partners (VAP).

Initially, the plan was to purchase all VAP assets after five years. Luckily, with the growth and success the Minnesota locations have brought, we were able to complete the purchase after three years. This purchase has allowed us to add five locations and to double our footprint.

“We officially closed on all VAP assets in September of 2022.”

We are extremely proud to have these locations as a part of our company and of the relationships that we have started with the growers we serve there.

In 2022, MRGA developed a partnership with Grand Farm. According to Grand Farm, “the Grand Farm Initiative is designed to inspire collaboration among businesses, organizations, and researchers to develop the future farm, which we believe will solve issues critical to farmers worldwide. Grand Farm is accelerating research and innovation into technology which will be present on the farm of the future.” Grand Farm acts as a bridge between businesses in the ag sector and pioneers of new technology. MRGA strives to keep up with the pace of ever-changing technology in agriculture and we know how important that is to today’s growers. We desire to be on the leading edge of that. We look forward to the future of this partnership and hope that the

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ROTHSAY

SABIN

development of new technologies will allow us to service you more efficiently. The groundbreaking for their new test site took place in Casselton on October 19, 2022.

This past fall, MRGA partnered with NDSU Agronomy Seed Farm and the North Dakota Agricultural Weather Network (NDAWN). Together we are putting in a new NDAWN station in Casselton. The station will be just southwest of our main office on Agronomy Seed Farm’s land right next to our driveway. We are excited to use this station to track current and historical weather.

Focusing on the future does not just mean innovative practices, but also the community and generations to come. With CoBank’s Sharing Success program’s help, we contributed $20,000 into multiple communities. In 2022, we were able to give $5,000 to the fire departments in Leonard, ND as well as in Rothsay and Dilworth MN. We also donated $5,000 to the Central Cass Dollars for Scholars. We look forward to the future of the Sharing Success program and will continue to utilize it to benefit our region.

We at MRGA take pride in the fact that we are able to give back to the communities we serve with more than just the CoBank Sharing Success Program. In 2022, we donated over $40,000 to various organizations such as FFA, music and sports programs in our schools, Cass and Clay County 4-H clubs, scholarships and much more. We are honored to be able to give back to our patrons in every way possible.

While we are focused on the future of our communities, we are also making updates and improvements to our locations! Learn more about these improvements on page 5 of this newsletter.

Terry Johnson, CEO 2

pictures

A YEAR IN

Toourcustomerpa , s rtners andteammembers-whatan amazingyear!Hersto e’ er v ything203hasintore.

JANUARY FROSTY DAYS

MAY PLANTING SEASON STARTS

SEPTEMBER

EMPLOYEE APPRECIATION FAMILY NIGHT

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FEBRUARY LOADING TRAINS

MARCH WE HELD OUR ANNUAL MEETING

APRIL THE ADDITION OF THE ATS TANK

JUNE THE CORN IS GROWING

JULY

GETTING LIQUID FERTILIZER DELIEVERED

AUGUST CELEBRATING POTATO DAYS!

OCTOBER HARVEST FINISHING UP

NOVEMBER FIRST TIME BEING AT THE AG EXPO

DECEMBER COMPANY CHRISTMAS PARTY

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Looking back at 2022, we had a very successful year. We had a little slower start with the spring fertilizer season. Overall application acres were steady, but we saw a decrease in the pounds per acre applied due to the rising cost of fertilizer. Grain receipts in the spring and into summer we lower than average due to a lower 2021 yields. Fall fertilizer and grain receipts made up for any short comings we saw earlier in 2022.

Soybean and Corn yields were well above average which made for a great fall but at times stressful to get through. MRGA employees definitely stepped up and were able to keep our grain facilities fluid and fertilizer application equipment running to get the job done.

Inflationary times seem like they are here to stay for a while. With an increasing cost structure, we must become more efficient in operations. Most of this revolves around using technology to make different tasks easier and/ or more productive. Grand Farm, and other vendors are automating different processes and will be integral in getting through these current times where labor availability has been an issue.

Through our partnership with Grand Farm, our I.T. department will be looking at ways to automate some of our systems to help with that.

In 2022 we finished up our third liquid fertilizer tank. We built a 500,000-gallon ammonium thiosulfate (ATS) tank. ATS is used mostly to blend into 28% UAN to bring a sulfur component to the liquid fertilizer blend. This will compliment our existing (2) 2,000,000 gallon UAN tanks. Going forward to 2023 we are currently working on a new office in Casselton. This project is still in the planning phase but could possibly start in the second or third quarter of 2023. We are also working on different maintenance and repair projects through out the company. In April we will be rebuilding our main distributor and 5

See the 3 tanks next to the corn storage building!

replacing our screeners at the Casselton Terminal. When we start working on this project we will have to close grain receiving in Casselton for a couple weeks. We will do our best to do this during spring’s work to minimize impact to grain receiving in Casselton. We are also looking at multiple conveyor rebuilding projects throughout the company.

In closing, MRGA had a great 2022 and we are looking forward to the many opportunities and challenges in 2023. As always,

“we appreciate your patronage and will strive to service our patrons”

in 2023.

Alex Richard, COO

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We often hear from producers wanting to know more about Basis Fixed and Hedge-toArrive Contracts. These questions may come from young producers who are new to marketing or seasoned customers who have never used them.

To shed some light on them we’ll explain them below.

Basis Fixed Contracts On basis fixed contracts, a particular basis level is set as well as the delivery period, quantity of bushels, and futures month, while the futures price is left open-to be set later. At MRGA our contracts read that futures must be priced at least 10 days prior to the first notice day of the underlying futures month, or the contract will be at risk of rolling. When rolling, the contract is subject to the spread of the futures month specified on the contract and the next futures month traded as well as an administrative fee.

The difference, made up of the spread and fee, will then be assessed to the basis on the contract and it will be adjusted as such. Basis fixed contracts should be used when the basis level posted is desirable but the producer feels there is potential for improvement in the futures market.

Benefits of Basis Fixed Contracts include: • The producer can haul to the elevator as opposed to storing grain on the farm and have to manage quality.

• Downside basis risk is eliminated.

• The bushels incur no storage costs.

• An advance can be issued at 70% of the value of the grain.

• Allows for more time in the market as a result of rolling.

Risks and Disadvantages include: • The producer is at risk of downside movement in the futures market. As such any difference in the value of the grain and advance taken would need to be paid back.

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• Full payment for the grain is not made until a later date when the futures are priced.

Hedge-to-Arrive Contracts Hedge-to-arrive (HTA) contracts, often referred to as “futures fixed,” allow the producer to lock in a favorable futures price while leaving the basis portion open to be set later. The producer can then set the basis at any point prior to delivery, or the basis is set to the posted bid automatically when the delivery month arrives or when the contract is delivered against. With an HTA contract the elevator places a futures hedge on your behalf and assumes all market risk. The reason the elevator charges an HTA fee is that they are then responsible for any and all maintenance margin calls. Like basis fixed contracts, HTA contracts may be rolled for the spread and fee. In this case the futures price would be adjusted. HTA contracts should be used when the futures market is at a desirable level, but the producer feels there is potential for basis improvement.

Benefits of HTA Contracts include: • Downside futures risk is eliminated • Allows for basis improvement.

• No margin requirements to the producer, as the elevator assumes the risk.

• Allows for more time in the market as a result of rolling.

Risks and Disadvantages include: • Producers must watch basis levels closely.

• Producers are open to downside basis risk.

• Unable to participate in a futures rally should one occur.

GRAIN TEAM Kim Bender, Grain Merchandiser/ Office Manager

Tanner McDaniel, Grain Originator

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The French proverb, “the more things change, the more they stay the same,” comes to mind when we think about the agronomy landscape while planning for 2023. We experienced turbulent changes in the 2022 season with the cost of inputs, but also an increase in the value of commodities. In the end things stayed the same; sound agronomic decisions in conjunction with a good growing season and increased grain values led to continued profitability in a turbulent landscape.

MRGAs approach to 2023 is to

“embrace change and implement proven practices”

where it can help return a profit. Our goal is to give the best agronomic advice by combining years of experience and the latest data available in the fertilizer, seed, crop protection, and biologicals space.

MRGA has done a tremendous job buying fertilizer when the opportunity has presented itself from last summer up through the last couple of weeks. Although these prices are still elevated, they have decreased significantly from one year ago. The one thing elevated fertilizer prices proved is that the value of a good soil sampling program, along with implementing VR fertilizer applications strategies has led to increased profitability. The trend towards VR applications continues to expand as we look to increase yields and maintain profitability.

The seed space continues to evolve with new traits and products on the market every season. MRGA agronomists lean heavily on data and field level insights from 2022 to place products in the proper environment and implement the best management practices for each hybrid to maximize yield. In our continued partnership with Winfield 7

United, our agronomists have industry-leading insight into what population, nitrogen management program, and fungicide strategies are going to provide the best return on every hybrid.

The biggest change in the crop protection market was limited supply. MRGA was able to maintain a good supply; but with that supply challenge came an increase in the price of goods. That price trend continues into 2023; although, supply has slightly improved across most, but not all product lines. One of the changes everyone has had to embrace is keeping up with manufacturers’ programming and to seek out ways to use those programs in combination with the products that result in the best level of weed control, resulting in increased profitability.

Prepay multipliers and manufacturer product pair-ups can earn significant savings or a return on your dollar. One thing that will always stay the same is that product decisions based on your fields’ weed pressure should remain the priority when making a choice on CPP products. “Clean fields for higher yields!”

The newest change and challenge at our doorstep is in the biologicals market. Biologicals and biostimulants are a large focus in the current ag landscape; although not new, there is a renewed focus with increased input pricing and pressure to focus on sustainability moving forward. We have been promoting and using biologicals for years in the form of soybean inoculants to increase nitrogen uptake in soybeans, as well as adding mycorrhizal fungi in furrow to increase nutrient uptake in corn. The newest biologicals to the market are focused on nitrogen and producing or procuring nitrogen in the plant from the atmosphere. What may sound like some kind of “voodoo” as we look at traditional practices, our partnership with Winfield United has allowed us

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access to multiple years of data, testing products with these claims. Through those studies and data sets we see that the product Envita, when used in conjunction with a solid crop plan, can do exactly that “voodoo” of providing in season nitrogen to a host plant by procuring nitrogen from the atmosphere. Thus creating a positive economic return for a grower. In the biostimulant space, we have proven the positive economic return of Ascend in furrow for corn. We have also tried adding products like Foster FC, Accomplish, and NexBlu to applications in order to stimulate microbial activity in soil. That landscape continues to change, as Ascend 2 looks to bring a new level of return in the corn market, and another product- Yield On, tested by Winfield United, has come to our attention to try based on their data and positive response rate in trials. We will continue to partner with Winfield United, working hard to bring forward products that provide consistent positive returns.

With all this change, the things that are the same are the nuts and bolts of growing a good crop.

We need to start with proper field soil preparation to provide a good seed bed. A fertilizer program that meets your fields yield potential, high quality seed with proper placement, and season-long weed control to have the best chance of high yields. What we do after or on top of that is where we can start the change. Whether that be adding a biostimulant in furrow at planting, like Ascend 2 or Foster FC, changing nitrogen practices by split applying dry and liquid, or adding biologicals like Envita foliar with your herbicide pass to provide late season nitrogen into your current program. Or additionally, trying a fungicide product like Veltyma, Marvis Ace, or Delaro with boron or new biostimulants like Yield ON. There are a few new and some of the same “tried and true” data-backed products and management practices that can bring a positive return in the right field scenario.

Only you and your MRGA agronomist can decide where and when to implement some of these changes in 2023. While we will undoubtedly continue to experience changes in the agronomy landscape; what will remain the same is

“MRGA’s commitment to assisting you in attaining continued profitability.”

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VR viewing of a field.

AGRONOMY TEAM

Mike Flaten, Agronomy Manager

Karl Berg, Agronomy Sales Manager

Ethan Kyllo, Precision Agronomy

Jon Ellingson, CCA - Agronomy Sales

Mike Weed, CCA - Agronomy Sales

Mike Stetz, Agronomy Sales

Mason Keefauver, Agronomy Sales

Justice Keefauver, Agronomy Sales

Brian Marquardt, Agronomy Sales

Karl Berg, Agronomy Sales Manager 8

MIRANDA LI

Bookings have started for the 2023 year!

Something that you should take advantage of are our Finance programs that are already available for the year. You can make use of these programs by doing a product booking with your salesman, and then paying for that through one of the finance programs. It doesn’t affect your checkbook or cash flow right now, starts cost savings for the 2023 crop, and locks down some of the things you know you’ll be using in 2023.

One of the handier aspects of these programs that most people don’t realize, or forget, if you do a product booking for seed or chem, and then happen to change your mind on varieties, CPP programs, traits, etc; you can do a return on an earlier booking, and then readvance for anything new that is booked. It really does leave some flexibility, along with getting some price savings.

Learn more about the programs we offer.

Winfield Secure We will have the Secure program available again this year. With the increase in interest rates we’ve all experienced lately, the Secure program is not immune to it either. This year, we are looking at a rate of 2.5%, with a loan fee once again at $150 and due date of February 1, 2024. If you have been in the program for at least 2 years, you MAY be eligible for their “EZ Renew” where renewal for 2023 is as simple as just letting your salesperson know that you want to renew, and at what amount. If the EZ Renew doesn’t apply, it’s a very simple one-page application. New customers can sign up with a one-page application, or a new OLA – OnLine Application.

Limits up to $500k with the one-page app, up to $1M with an application and current Financial Statement.

Rabo Agrifinance & John Deere Financial These two are lumped together, because 9

they typically carry the same programs. These are used for any company specific programs by Bayer, BASF and Syngenta. One use for these two are for financing Roundup products. Roundup is not eligible for Winfield Secure, so we can make use of Bayer’s program where you would finance Roundup and one other Bayer product at a minimum of $10,000 to start. Most of these programs appear to be at 1.9% interest rate, with a due date of either the November or December statements of Rabo and JDF. Once again, ask your salesperson for more specifics.

Corteva TruChoice Prepay Program This program has been around for a couple years and allows for a 10% discount/ rebate on Corteva products. You must fund a TruChoice prepay account with a minimum of $5,000 by February 24, 2023, then we can run your Corteva Invoices through your account at Corteva throughout the crop year, up to September 30.

This was a quick and brief overview of the programs we have available. As stated before, please contact your salesperson if you are interested in knowing more on any of these programs. If you see a program out there that you think we don’t have, please double check with your salesperson.

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INDSTOM

ETHAN KYLLO

BLAKE DIDIER

JILL RODEN

MATT BEATON

TERRY CZICHOTZKI

SCOTT BEATON

LEARN MORE!

The MRGA Wellness Committee sponsored Harvest Meals for the 8th straight year. We provided meals for every location that was open weekends during harvest. These meals are provided in appreciation to our co-workers who are putting in long weekend hours during the busy harvest season. As the company grows and adds locations, this program becomes more challenging. We appreciate the help we have received in getting these meals made and delivered.

A “Maintain Don’t Gain” holiday challenge was held between Thanksgiving and New Year’s, with 14 employees participating in the challenge.

Sweatshirts were given to all participants, and anyone who finished the challenge had their name put in a drawing for a $100.00 gift card. There were other ways to earn more chances to win, such as

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submitting recipes or participating in mini challenges.

“Congratulations to Maria Frerich for winning the $100.00 gift card!”

Looking ahead, we are re-structuring the wellness committee and are looking for new members. We have been looking for more challenges to do over the rest of the winter and looking for other ways we can use our budget to help keep our employees healthy.

Kim Bender, Grain Merchandiser/ Office Manager 10

RECIEVE EMAIL UPDATES SIGN UP HERE Are you already signed up to recieve emails? Make sure we have your correct information by contacting Maria Frerich or your sales contact.

701.347.3165 marketing@mrga.com

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GROWE

You can now access ALL o BOTTOM LINE

We are getting ready to roll out our new MRGA app in the coming months. The new app will have all the great features you expect from us but will have some exciting new features. These include: signing contracts digitally, pay electronically, and on-the-fly orders from your sales representative. Stay tuned for more information on our thrilling new app.

Brian Trosen, I.T. Manager

COMING SOON!

ER PORTAL

of your business activities with ease!

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1630 1st Ave S Casselton, ND 58012 701.347.4465