SFG Update - Winter/Spring 2022

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In This Issue: Max Smith, President & CEO Mike Curtis, Director of Operations Mark White, Grain Manager Charles Smith, Agronomy Operations Manager Jason Jensen, Northwest Agronomy Sales

Derrick Hoodjer, Agronomy Programs Director Taylor Banks, Southern Agronomy Sales Scott Goetz, Feed Sales Manager Mike King, Southern Feed Sales

Changes at SFG Max Smith President & CEO

My newsletter topics have always been about change. As I enter my senior years, 2021 seems to have been the most challenging year in my career. Covid 19 has changed the world in how we think, work, buy, and sell ag products, but most of all how we interact with friends and family. The ag business is more challenging than it has ever been. Sourcing fertilizer, farm chemicals, truck and sprayer parts, and new equipment has been a nightmare. We ordered a new pickup last July and have recently been told we might receive it in April, MAYBE. We maintain more equipment to guarantee that we can get fertilizer applied when we promise. Employee attendance has been affected by covid related issues from sick children, parents/ grandparents. Talented employees are hard to find. SFG is currently advertising for 12 new employees, maybe more. Check our website for updates or call our main office and speak to Kristin Smith for a current list of needed employees. Last fall we took in the largest harvest ever and to date we have applied a record amount of lime & fertilizer for the 2022 crop. Our employees have really worked hard to meet our customers’ expectations. Our agronomists are

some of the best in the Midwest. This spring the cost of fertilizer and chemicals are much higher priced and hard to get. Charles Smith has done an excellent job of procurement this winter and spring, enabling us to be in a great position to take care of our regular customers, who in turn will take priority over any new business. This past year we have a done a significant amount of cost accounting to determine how it effects our business as well as your business. After several months of debate and serious discussions we have decided to close the majority of our “open credit” accounts. Upon product delivery, our suppliers require us to pay in advance or draft money from our bank account, which requires us to carry a large line of credit for purchases. The interest and expenses associated with these credit accounts can really add up. As a company we are spending a huge amount of time and money to maintain these accounts which we are then forced to pass that cost on to you, our valued customer. Quite simply there are cheaper ways to pay for your supplies from us than utilizing our credit system. We are good at what we do, but we are not bankers. Effective February 1st and March 1st, our new terms will go into effect. As in the past, we will continue to charge to customers until March 1st, when our new system will go into effect. Our managers and salesmen will be contacting most of you to answer any questions/concerns you may have. Moving forward, most of the chemical, seed, feeder finance, JD Plan, credit cards, and finance options will remain in effect. (Continued on Page 2)

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If this policy change will be a burden for you, please contact your location manager for assistance with this change. The discount schedule we have used for years will be abolished. Our new credit policy will be streamlined to give you maximum flexibility to pay your account and allow a discount when paying at the time of purchase. This allows us to give you the best price possible as well as giving you long term options to pay your account. The SFG management team has studied this thoroughly and believe this is the best option in the changing business world we live in today.

Introducing Mike Curtis, Director of Operations

I’m Mike Curtis, born and raised in Lenox, IA. I attended Lenox schools, then went on to attend AIB (American Institute of Business) college in Des Moines, where I met my wife of 28 years, Tina. Tina and I have two children son Cade 21 and daughter Taya 17.

Last but not least, we appreciate your past business. Our goal will be to continue to exceed your expectations to earn more of your business. I have hired Mike Curtis as Director of Operations to our management team. Read his bio in this newsletter. Mike and the other SFG managers will assist me in all aspects of managing SFG. Mike’s main focus and expertise is agronomy, seed, and managing people within our organization. His guidance and long-term thinking will assist me as I prepare for semi-retirement. After working for 52 years and President for 33 years, it is time to change my lifestyle and pamper my wife, Sharon, who has been by my side since I became President of SFG. Change, change, change!

We relocated back to the Lenox area, where I was the location manager of a bank in Corning. I then transformed my career to agriculture with Terra Industry in Lenox as an applicator and sales professional. I later moved to Caroll where I would work 22 years for what is now Nutrien Ag Solutions. I was employed in many roles, including wholesale and retail responsibilities. I still maintain contact with the world of agriculture, owning the family farm by Lenox. I love to stay involved in the daily advances of helping SFG customers feed the world. Outside of work I enjoy spending time with family, watching sports, and playing golf. If you have any questions or concerns, please don't hesitate to call or stop in for a short visit.

Market Update Mark White Grain Division Manager

We continue to see volatile moves in the grain markets almost weekly. This started during the 2020 harvest as China ramped up their grain buying. Since then, they have slowed their purchases from the US, but other factors have become drivers. Weather issues around the world have impacted the production of corn and beans. The pandemic has changed people’s habits, but they still need to eat. It appears most people eat more food when eating most of their meals at home versus when they eat at restaurants. World politics are playing a larger role as countries have discovered a well-fed population leads to a more stable environment and people are more content. In our part of Iowa, we are coming off a great harvest along with well above normal prices. I don’t think that has ever happened at the same time in southern Iowa. Unfortunately input costs have risen tremendously in the past 6 months. Most of us have seen this before. There is always someone ready to take whatever money a farmer has. History has shown us that higher commodity prices breed higher input costs. Normally the cure for this is lower commodity prices as the tug of war cycles. The January WASDE report was released on the 12th. This is a major report that normally makes the markets move big time. This

year it was rather tame. They moved some numbers around but at the end of the day it matched expectations better than most years. Currently there are some bright spots. Domestic demand continues to be strong as ethanol and bean oil are very profitable for the processors. Crude oil trading at 80.00 plus is helping the price of ethanol. New uses for vegetable oil is pushing soy crush margins to the 2.00 a bushel level. The availability of other oil seeds in the world is currently short. Canola and palm oil have traded to record highs lately which in turn is helping the bean market. Hot dry weather in South America has the attention of grain traders. Reliable information from that part of the world is sometimes hard to come by. That leaves traders to trade off of emotion and that can lead to wider price swings. At this point you may be asking, what is a guy to do? First off if you are carrying old crop don’t get caught up in the notion that prices will go higher to cover input prices of the new crop. We need to remember the old saying that lower prices will cure higher prices. Input prices rise fast and retreat slow. 13.00 plus beans and 5.70 plus corn are not only good prices, they are also profitable prices. There is no need to lose sleep selling here, even if prices go higher. Starting some new crop sales at this time would be advisable. Get something on the books and get a plan formed as we get closer to planting season. Your investment in thee 22 crop is going to be huge. Don’t hold off making some sales and end up being the guy who always says, should have, could have. Again, remember the saying, low prices cure high prices. You want to be on the right side when this happens.

Operations Update Charles Smith Agronomy Operations Manager

Looks like fall is officially over. We finally received some snow to kick us out of the fields. The weather has stayed extremely nice for us to finish NH3. I know we still have some lime, super grow, and dry fertilizer to do when the weather allows us. All of us at SFG couldn’t have asked for a better fall to get all the work done that we did. As of today, we have applied 55% of our allocated tons of super grow. Lime has stayed very steady this fall/winter, but are amount of lime to do seems to stay the same. We have applied about 60% of the anhydrous this fall where we normally put on 40% in the fall for the company and will apply the rest this spring. We have winterize all our equipment and put it away for the winter for the most part. This winter we will go through and do maintenance or other work needing done as the weather allows us to. If the

weather doesn’t allow us to work outside we can bring it in and go through it. It is never too early or too late to start planning for the next crop season. Spring will be here before you know it. We like to put together agronomy programs so that farmers can start planning for their spring needs. SFG offers full services for your agronomy needs to help the grower make better decisions for their operation. With prices rising, it is a great idea to give your local SFG salesman a call and get prices locked in. As always, we are continuing to grow as a company and to do what is best for our customers. If you ever have any questions, don’t hesitate to give us a call!

Tune into SFG Top Performance, our weekly podcast with all the information you need to increase your profitability and success! New episodes posted Monday mornings! Click Here to view, or look us up on YouTube!

Northern Agronomy Update Jason Jensen Northern Agronomy Sales

In the Northern area we have had a good run of fall NH3. Weather allowed fall applications to flow smoothy and gave us ample opportunity to apply any acres that farmers were wanting to get applied this fall. We have also had a good run on fertilizer and lime applications. The good fall and early winter weather that we have experienced will make spring work flow much smoother. With that said it is still vital to contact your local SFG agronomist and make plans for inputs for the 2022 growing season. In the past few months, I have heard more times than I care to mention something about the cost of inputs for the 2022 crop year. We must look beyond the initial cost, as they are not going down anytime soon, with our nation having a supply issue on every product that we use in everyday life. As we are looking at products for 2022, we need to look at what value that product will bring to your operation, and what may be lost in returns if that product is cut trying to decrease expenses this growing season. Very little has changed in the overall makeup of corn and soybean production, and we must do anything that we can to keep that competitive edge on our neighbors. Some things to focus on while procuring 2022 inputs for your acres:

We must start with a seed that will produce top end yields taking advantage of any growing conditions that we may experience in 2022. This seed should also contain traits to help as needed to optimize yields. IE. Insects, weed, fungal, and rainfall. We must apply adequate fertilizer with proper placement on your farm to optimize crop growth and development, cheating on rates below that of optimum production only cheats yourself on yield potential. This includes N, P, K, and micronutrients needed to optimize yields. VRT application also allows fertilizer to be applied where needed on your farm to add value to your operation. We have many new and exciting options to VRT fertilizer at SFG using yield potential, CSR, soil types, and soil test information, combing this information gives us the capability to spread fertilizer more accurately than ever, to optimize returns across your acres. We must keep our fields clean to prevent weeds from robbing yield from our crops, and keep the weed bank under control for future years. One pass programs have failed many times in the past, so there is no reason to think that anything other than a 2 pass program with multiple modes of action will control weed pressure this year. The weeds don’t care if chemicals are hard to find or that pricing has increased. We must protect our crops against disease and insects as needed, by means of fungicide, insecticide, seed treatment, and other forms of protection. Talk to your local SFG agronomist to help you put your agronomy plan together for 2022 to keep that competitive edge on your neighbors. Spring is less than 75 days away so it is time to finalize initial plans for the 2022 crop season.

Central Agronomy Update Derrick Hoodjer Agronomy Program Director During the beginning of 2022 we have officially put away the long 2021 fall. Almost a foot of snow as halted any agronomy work to be done but allows us to take time and reflect 2021 and plan for 2022. As we know 2021 was a year of records for our growing area. Growing conditions were good with only a few areas with harsh weather and this led to record yields. Harvest 2021 was very bountiful. After harvest this led into another record of input prices. We’ve had to be very price conscious going into this winter and make sure we have a plan set up for success. Keeping the pencil sharp and using products that have positive return on investments are the keys to success for crop year 2022. In our central agronomy territory, I have done a lot of ROI planning with customers for next year. This is a very important step to take because even with record high nitrogen costs, corn still has a strong ROI in most of our central territory. Early on there were talks of more acres going to soybeans because of the high input prices but our territory will still be mostly in a 50/50 rotation. At price level that corn is at

there is still a strong ROI when comparing to soybeans. The biggest argument is, “What if prices tank?”. This makes marketing grain extremely important this year and customers really should be locking in prices for fall as the prices stay at profitable levels. A lot of conversations I have with customers involve locking in prices to cover the high-cost inputs to start. This is a good strategy because once all inputs are covered it takes a lot more risk out of growing crops. ROI strategies are important for the entire operation as well as considering each product individually. Products on the farm that showed us the best ROI this year are fungicides and sulfur. These products in the right scenarios can have huge benefits. We have a lot of data on both items to prove the benefits and will continue to test each year. Fungicide timing and biological products are my focus for 2022 testing. Biological products are trying to manage or add soil biology to the cropping system. Most products are geared towards making nutrients more available to plants. This theory has been tested in labs and on small plots and have seen positive results, but I haven’t seen them translate to the field level consistently. I had a starter plot show very positive results in some areas and no results in others. This tells me that we need to find the timing or scenario where they work the best. (Continued on Page 7)

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My plan for the 2022 growing year is to test biologicals that apply with starter, with the seed and applied over the top with herbicides. There is still a lot of information to put together before these products will gain market share. SFG plans on looking at these new products to find the best scenarios and make sure none of our customers miss the next big opportunity. We need to take what we learned from the 2021 high yield and do our best to translate it in this next growing season. We know there will be new challenges already as we have faced a foot of snow in January. This again reminds us that ultimately mother nature will have the

Southern Agronomy Update Taylor Banks Southern Agronomy Sales

Well it looks like winter has finally set in on us and as I write this snow is falling again here in Centerville. We have still been working on some application work as the weather allows for dry fertilizer and lime and this fall was great for getting work done. Between an extended period to get fall work done and pre-pay we have got a good chunk of dry and NH3 on this fall so that will definitely free up some time in the spring. As we get closer to spring it is important to get the rest of our inputs booked

final say. Us agronomists and producers need to do our best to capitalize on the variables we can control. That’s where the sharp pencil comes into play. I know we can affect the bottom line of operations because of the testing and success we’ve had in the past. I welcome the customers challenges with pricing and always want to have those conversations. We can’t always be the cheapest price every time, but we will take the time and find what works on any operation we work with. Thank you for all the business in 2021 and continue to challenge us to earn your business in 2022.

so we are ready for spring. There are still good discounts on seed at this time and with the uncertainty of supply on some chemicals getting your needs spoke for now could eliminate some headaches in season. 2021 threw us a few curveballs late in the season for chemicals but it appears 2022 might start off the same way it ended so the last thing we want as growers is to find out that something we need is unavailable when we need it the most. The nice thing is with the XtendFlex and Enlist E3 varieties we have options on weed control and our pre’s will be more important than ever this time in making sure we are controlling the problem weeds. The easiest weed to control is the one that never comes up. So in the coming weeks I will be working on helping my growers get inputs set up for spring and I encourage anyone who has questions or still has product needs to contact your local SFG agronomist.

Southern Feed Update

you is calving season. There are many stresses that can affect your calves’ health this time of year. One thing we can do to alleviate these stresses is to use Mike King calving mineral, particularly those high in vitamins Southern Feed Sales and probiotics like Bio-Mos. Bio-Mos is a unique probiotic that “feeds the gut” and ensures proper intestinal health. It helps reduce scours in calves Hello, my name is Mike King and I’m the newest and increases milk quality in cows. You want to feed salesman for Smith Fertilizer and Grain. I start feeding mineral at least three weeks before will be based out of the Albia office and cover calving begins and continue through weaning. the Southern half of SFG’s trade area. SFG also has other stress-mitigation products I was born and raised on a livestock farm in Hubbard, Iowa, Northeast of Ames. I went to college in Muscatine, where I achieved a twoyear degree in animal nutrition and agronomy. I’ve worked with livestock producers across Iowa for over 30 years and look forward to meeting everyone in the SFG area. One thing I am discussing as I’m out meeting

available, such as scour tubs, colostrum packs and paste, and many kinds of milk replacers. These are all products you want to have on hand all through calving season to ensure the health of your herd and profitability of your operation. To discuss these products or to just introduce yourself and say hello, give my cell phone a ring at 641-218-4232. I’ll be glad to chat!

Northern Feed Update Scott Goetz Feed Manager

Well, another year has come and gone. But, before we know it, the grass will be turning green, and calves will be hitting the ground. If you have never tried a calving/breeding type mineral, this would be the time to consider using one. Hubbard and Kent both offer very good options for calving/breeding minerals. These minerals are high quality minerals to start with, then they add a trace mineral pack. These trace minerals are essential to cow health, including reproductive health. The cows also pass these trace minerals on to their calves, this will increase health and vigor in calves at birth. Trace minerals help a cow to have more nutritious colostrum to offer calves. Calves who receive colostrum from cows supplemented with trace minerals are heathier and have better immune systems. They get off to a better start, this will carry through their lifetime, making them better doing calves overall. Trace minerals will enable cows to recover more quickly from calving and cause their reproductive system to have better overall

health. This will allow cows to cycle more quickly, and breed back with better results. There are other benefits associated with trace minerals, but I feel these two benefits offer the biggest return. Trace minerals have been researched and put through numerous trials. Over and over they have been proven to benefit breed back and new calf heath and vigor. A calving/breeding mineral needs to be started at least 30 days before calving. This gives enough time to get through the cows system and passed on to the calf. They should be offered at least through breeding season. Smith Fertilizer and Grain will have booking specials in February and March on minerals. In the northern area of SFG, you can contact me at 641-218-4015, or in the Southern area you can call Mike King at 641-218-4232. We would love to talk about your operation and how SFG can help you with your mineral and feed needs.

Knoxville Main Office

Pleasantville Location

Centerville Location

Albia Location

1650 Quebec St

702 E. Jasper

1605 S. 24th St

805 Hwy 5 North

Knoxville, IA 50138

Pleasantville, IA 50228

Centerville, IA 52544

Albia, IA 52531

Office: 641-828-8500

Office: 515-848-5000

Office: 641-856-2828

Office: 641-932-2100

Knoxville City Location

Melcher-Dallas Location

Milo Location

Columbia Fuel Station

601 N. Sherman St

126 2nd St SE

101 1st St

2441 Hwy 14

Knoxville, IA 50138

Melcher-Dallas, IA 50163

Milo, IA 50166

Columbia, IA 50057

Office: 641-842-5511

Office: 641-947-2000

Office: 641-942-6223

Cell: 641-218-4035

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