Summer 2020 SFG Update

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President & CEO

Chief Operating Officer

Financial Controller

Max Smith Email:

Sharon Smith Email:

Ashley Basset Email:

Grain Merchandiser

Fuel, IT, & Feed Manager

Agronomy Manager

Mark White Email:

Kyle Smith Email:

Charles Smith Email:

Knoxville Main Office

Pleasantville Location

Centerville Location

Albia Location

1650 Quebec St Knoxville, IA 50138

702 E. Jasper Pleasantville, IA 50228

1605 S. 24th St Centerville, IA 52544

805 Hwy 5 North Albia, IA 52531

Office: 641-828-8500 Toll-Free: 800-828-5005

Office: 515-848-5000 Toll-Free: 800-586-5005

Office: 641-856-2828 Toll-Free: 866-856-5303

Office: 641-932-2100 Toll-Free: 877-932-5005

Knoxville City Location

Melcher-Dallas Location

Milo Location

Columbia Fuel Station

601 N. Sherman St Knoxville, IA 50138

126 2nd St SE Melcher-Dallas, IA 50163

101 1st St Milo, IA 50166

2441 Hwy 14 Columbia, IA 50057

Office: 641-842-5511

Office: 641-947-2000

Office: 641-942-6223

Cell: 641-218-4035

Mark White SFG Grain Merchandiser Most of our SFG trade area saw a near perfect planting season this spring. This allowed producers to get their crops planted timely and now as head into layby time for the corn most of the fields are showing good promise. Meanwhile the grain markets have been tough to read lately. Perhaps it might be more accurate to say they have been hard to read for some time. During harvest last fall the local prices hovered in the 3.50 range for corn and 8.50 for beans. A lot of guys who sold did it almost regretfully as most of thought better prices were just down the road. In late January the tension between the US and China ramped up a couple of notches as they were not honoring their phase one agreement. February was somewhat quiet as we started to hear about a new disease that was infecting a lot of Chinese people. It moved to other countries such as Italy where the death toll was large. Then in March it took hold in the United States and life as we knew it changed almost overnight. It presented the United States Ag economy with the perfect storm. People were forced to stay home; stores and restaurants were forced to close along with many lifestyle places

of business. People were not driving so gasoline demand plummeted along with the need for ethanol. Packing houses closed or slowed down due to sick workers and livestock backed up on farms across the nation. In the midst of this we saw commodity prices take a nosedive from prices most of us felt were already too low. The recovery from the Covid 19 pandemic has been slow to start and it will be painfully slow for some time. So, what is a crop farmer to do? The first thing is to take stock of what you have and what your needs are. For those with old crop grain that needs to move before harvest the next short weeks may offer some opportunities. We do not have a big weather story currently but there are some small stories out there. A pocket of dry area is just west of Iowa and currently moving this way. Excessive moisture in the far eastern corn belt has delayed planting. And the poor guys in North Dakota might have to concede to mother nature this year on a lot of acres. The USDA will release their first actual planted acreage report later this month and chances are it will create some fireworks. The majority of corn pollination will occur on the early side this year. That means the results will be known by July 15 and it too could be a major mover, the issue being we do not know if the move will be up or down at this time. The export market is still very fuzzy. Currently the US has the cheapest corn and beans in the world. China says they want to buy more from us, but they continue to act like the ugly sister that cannot get a date with the prince and is too proud to accept one from a pauper. Now you get to this point and it might be easy to confuse me with a politician as all I did was answer a question with more questions. The bottom line is we are in one of the toughest of times that American agriculture has experienced. Golden opportunities are going to be rare for a while. That means we will need to be prepared to price some grain at a moments notice. Please feel free to give me a call at the Knoxville office, 641-828-8500 and we can discuss your marketing needs.

SFG Update

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Charles Smith SFG Agronomy Manager As a whole, the spring season has went well for the agronomy department. We had 10 operators applying dry fertilizer, super grow, Nh3 and chemicals all at the same time. That was quite a challenge! Everyone stepped up to the challenge. We also had 40 to 50 other employees to support all the work. We could not have gotten all the work done without our good people. I could not have asked for a better group to work with.

Beau Smith Albia Location Manager For those who I have not met, my name is Beau Smith. I have been the location manager at Albia since the beginning of 2020. For the past 10 years I have worked my way up at the family business to this position, starting out with cleaning out bins and eventually becoming the main applicator at our Centerville location. I have worked close with my father, Jason Smith, who has done his best to teach me everything he knows. This fact should make sure that the feed operations and quality will be at their best. I am also working with my uncle, Kyle Smith, who is teaching me everything I need to know has he hands me his old position. My background with livestock is mostly with cattle and horses. I helped my stepdad, Brad Arnold, with his custom cattle and the rodeo company that he used to have. This involved getting

We are now finishing up spraying corn for the 2nd pass and starting on beans. We need about 10 days and we can be done with post spraying. This could be one of the earliest seasons getting done with post spraying. Guess we will have to see. We had 4.5 to 6 inches of rain over the Marion county area. They had less amount to the west near Milo and to the south near Centerville. We have gone through our Nh3 tool bars and fixed them up for fall. Each bar is gone through from top to bottom. The bars have been put away and we are now going through Nh3 wagons. All the Nh3 wagons are stored at Pleasantville and Centerville. These locations will go through them and see that they are 100%. Each tank has about 15 things that need to be checked and signed off on. All tanks have pop off and hydrostatic valves that have expiration dates. That need to be changed out every 5 years.

in cattle on horse back and taking care of them during the calving season. Some more changes that are happening around the Albia location is our brand-new feed truck. This truck can haul up to eighteen tons of feed and unload it at 3,000 lbs./min. This will help improve our shipment times while keeping the same quality you expect from us. We will be starting to make final improvements to our driveway this summer. This will make it easier for everyone that comes to our location. COVID-19 has turned out to be a serious deal. Other than a few missing handshakes we are still able make and deliver feed the same as always. We are doing our part by making sales calls over the phone but also making sure to keep our office sanitized for customers that want to come in. COVID-19 has affected the prices on almost everything. Lucky for us we booked our creep feed just in time which means if you come in and book creep with us you will be getting a very competitive price. We offer both Hubbard and Kent creep. We also have creep feeders for rent that we can deliver. Feel free to contact us for more information on how we can meet your animal nutrition needs!

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SFG Update

our fuel stations from which is associated with our internet service provider. We’ve been aggressively inI’m excited to announce vesting in expanding that our LED price signs our infrastructure to are finally up and operabring in a second intertional at both fuel stanet provider to provide tions! We started this pro- us with a third layer of cess around late harvest redundancy. This but due to production should alleviate any delays and the COVID outbreak little progress was made. As internet downtime that with anything new there were a few programming issues has been experienced at the pumps. We hope to have that we had to work through with different companies to this project completed by mid to late July. get everything ironed out. Jeff Fox drew the lucky straw of Also for those who still have interest in getting an SFG having to get all three companies to work together which fuel card please reach out to any SFG locations and happened to be in three different time zones. (PDT, CDT & we can work together with you to get you setup. EST) Thank you for your business! As some of you are aware - we’ve struggled over the last several months to maintain reliable internet connection to

Kyle Smith Fuel, Nutrition, and IT Manager

Smith Fertilizer and Grain Offers Free Wi-Fi Access in Attica, Melcher-Dallas, and Milo to Help Bridge Telehealth and Educational Digital Divide During COVID-19

As part of a broader initiative by farmer-owned co-op Land O’Lakes, Inc., Smith Fertilizer and Grain is providing free internet access to our community.

As the coronavirus pandemic has created an unparalleled and sudden shift to virtual working and learning, people in rural areas now more than ever are feeling the impacts of limited or unreliable internet connectivity. To help neighbors communicate with friends and relatives, keep up with school work, and take part in other activities that are now done almost entirely online, Smith Fertilizer and Grain is making guest Wi-Fi access available in the parking lots of its Attica,

Melcher-Dallas, and Milo locations to area residents. This initiative is part of a larger effort by Land O’Lakes, Inc., a member-owned co-op with deep roots across rural America, of which Smith Fertilizer and Grain is a member. “Most of us that work for SFG live in rural communities and know how much our lives are impacted by a lack of affordable broadband access,” said an SFG representative. “We’re glad we have the ability and means to partner with Land O’ Lakes to help the communities that we call home.” To maintain social distancing, guests are asked to stay in their own cars while using this service. Users of the Wi-Fi can park on the West side of the Attica location, South side of the Melcher-Dallas location, and North side of the Milo location. Look for SSID sfgcommunitywifi. No password is required.

SFG Update

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Derrick Hoodjer R7 Specialist, Melcher-Dallas Agronomy Sales The 2020 year has been a big year for technology at Smith Fertilizer & Grain. We want to go away from the plant it and forget it attitude and work hard at finding opportunities throughout the season. SFG has taken steps forward by really focusing on multiple technologies to help accomplish goals in the growing season. This summer we have focused on Field Monitoring Tool, Field Alytics and Field Forecasting Tool. The Field Monitoring tool is a program we are using to look at crop progress throughout the season. The model will use satellite NDVI images to monitor how far along a field is. NDVI is essentially looking at how much green material the field is producing. As crops produce more biomass the images will be “greener�. The tool will determine if crops are growing at a fast or slow pace. Once we determine which fields are struggling or doing well, we can scout and find out why. This would help us prioritize fields that could be fixed or fields that could be pushed to higher yields for a better return on investment. Once we determine fields to apply fertilizer for example, we need to break it down and put the right amount on every acre. Field Alytics is the program we use to make variable rate (VRT) application maps. We can make normal VRT maps based on soil samples for P & K but I also like to take this a step further and use this technology to variable rate nitrogen. Nitrogen is a very hard nutrient to figure out, but a rule of thumb is that higher yielding areas need more nitrogen. Field Alytics can find these areas and apply that nitrogen. There are multiple ways to accomplish finding higher yielding zones. The best way is using a yield map but for growers without that

capability we use corn CSR2 ratings based on the soil type. I use Field Alytics to assign a yield goal to each of these zones then apply nitrogen based on those zones. We have the capability to variable rate pre-season NH3 and Sidedress Urea. I can see a movement towards more in season urea and see this as a very easy way to capture more bushels in the growing season. Our final technology is the Field Forecasting Tool (FFT). This is a crop model that tracks nitrogen, potassium, water, and plant growth during the growing season. FFT is used to determine in season nitrogen needs as well as all fertilizer needs for the next growing season. This model predicts the growing season and how much fertilizer will be used. We also utilize tissue samples to calibrate FFT so we can be as accurate as possible. These tissue samples give us a look into dry fertilizer, nitrogen and micronutrient needs. FFT gives us a return on investment strategy and can find us the best rate on fertilizer inputs. This is an overview of technologies we are utilizing this season but there is much more once you get into these programs on a field level. We have multiple fields in all programs, and they can be tailored to any farming operation. Smith Fertilizer & Grain is becoming a leader in using technology in the agriculture industry. Reach out to any of us and we will set up a time to go over how using multiple technologies can benefit the farm gate.

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SFG Update

Jason Smith SFG Operations Manager As planting season is complete and in a couple of weeks spraying season will be all but over it will be time to shift our focus over to our summer projects. We have a few location upgrades going on this summer that will allow SFG to better service our customers. Here is a brief overview of the locations and the improvements we have planned this summer. First on the list is at Pleasantville we are putting up a new salt shed. The shed we had been using has limited capacity and has been past due for an upgrade for a while now. The new shed will be a hoop style building and will be able to hold twice as much as the one its replacing. At Milo we are rebuilding fill stations of the NH3 plant. The current fill station is slow by today’s standards. The new fill stations will allow us to fill up five wagons at the same time. This will allow us to fill wagons around four times faster than we do now. On the elevator side we will be reroofing part of the woodhouse and replace the old grain probe with a new one.

At Melcher we will be replacing the truck scale. This also has been long overdue. The new one will be an above ground style and will be placed in the same general location as the old one. We will also install a new grain probe to complete the package. This project is starting on June 18th and is scheduled for completion around June 29th. Sorry for the inconvenience but we will not be taking any grain at this time. At the Albia location we have added some new safety railing around the truck scale. This will make it safer for everyone when entering and exiting the scale. This will also allow SFG to clean and preform scale maintenance in a more timely and safe manner. The feed mill is getting the roof coated with a sealer that will keep everything dry for years to come. To go along with the upgrades and improvements to the facilities as always, we will be working to get all our grain elevators in tip top shape in preparation for what we hope is a plentiful harvest. This will involve a continuation of the repairs we made at the SCC locations last fall. Some of these repairs were made temporary in order to get through the harvest. I am going to have to go through my notebook to make sure we do not miss anything! Our goal is to have all the projects complete and everything in tip top shape by midSeptember.

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