85th Annual Membership Meeting

ALABAMA FARMERS COOPERATIVE’S 85TH ANNUAL MEMBERSHIP MEETING

WHERE HISTORY MEETS OPPORTUNITY

BY JESSIE SHOOK

Photo Credit: Studio Panache

AFC President and Chief Executive Officer Rivers Myres took the stage to deliver his ninth President’s Report at the historic 85th Annual Membership Meeting. Myres began by thanking his wife, Mary Tucker, who was in the audience. He recognized all of the spouses and partners whose support contributes to the success of each person at AFC. On AFC’s 85th year, Myres took the opportunity to reflect on where the company began and where it is today. “At the time of our founding, AFC had 11 members and $10,340 of equity,” Myres said. “Today, we have 31 members and $390 million in equity. As a whole, AFC does business in 48 states and employs thousands of people.” Myres highlighted the changes that have taken place within the company and over AFC’s 85-year history. He made the point that even though the world and AFC are more complex, our core values remain the same. “AFC’s leadership thinks about these values every day,” Myres emphasized. “They are the guiding principles for every decision we make.” Myres was pleased to report that for the 2021 fiscal year, AFC returned $22.5 million to AFC’s membership in patronage and equity retirement. Not only that, but since 2014 AFC has returned over $97 million to the membership in the form of equity retirement, patronage, loyalty rebates and insurance incentives. “AFC’s membership today is healthier than it ever has been,” Myres said.

Photo Credit: Studio Panache

Rivers Myres presented the 2021 President’s Award to 25 Cooperative General Managers. (Photo Credit Studio Panache)

“I appreciate each of our Co-op managers for the hard work that contributed to this success.” Following his report, Myres presented the 2021 President’s Award to 25 Cooperative General Managers who finished the year with positive local earnings and net margin to sales equal to or greater than 1.5%. The retirement of James Fudge brought a new face to Management Services as Andrew Dempsey assumed that role as the new Vice President. John Gamble retired as Vice President of AFC Grain Division after 43 years of service, and AFC welcomed Bart Payne as the new Vice President of Grain. AFC’s Chief Financial Officer, Thomas Hallin, began his report by highlighting the events that made 2021 a transformational year for the company. AFC formed a new farm supply partnership, Faithway Alliance, with Tennessee Farmers Cooperative (TFC); formed a new agronomy joint venture, GreenPoint Ag Holdings (GPAH), with TFC and WinField United; and completed the sale of 50% of AFC’s ownership in Bonnie Plants to Scotts Miracle-Gro. These transactions had a profound impact on AFC and its membership. “Our financial condition is truly remarkable,” Hallin added. Each division and joint venture confronted challenges, faced changes and obtained victories over the course of the year. Each are looking toward the future to continued success. Faithway Alliance faced growing pains and dealt with logistical and operational challenges during its first year. Despite this, Faithway completed the year with sales of $158 million and net income of $2.6 million. Faithway also announced that Mike Elsea had become the new CEO after Tommy Dailey’s retirement. AFC’s 25% share of GPAH’s earnings was more than double AFC’s prior year share of earnings from Agri-AFC, in which it held a 50% interest. GPAH’s first year produced sales of $1.3 billion and net income of $58.7 million. GPAH is now the seventh largest retail economy company in the United States. Bonnie Plants sustained 2020’s historic growth through 2021. Although experiencing a slight dip in sales, Bonnie was able to retain 80% of the new business seen in 2020. Bonnie also broke ground on its new headquarters in Opelika, Alabama. This move will further strengthen Bonnie’s relationship with Auburn University. AFC Feed, AFC’s joint venture with Purina Animal Nutrition, is working hard to bring all feed manufacturing capabilities online, including the addition of a new warehouse, storage and blending facility on AFC’s Decatur campus. AFC Feed is positioned for growth and strong results in the coming year. Following the business meeting, AFC’s Board Chairman, Ben Haynes, spoke of the positive working relationships among the Board of Directors and the legacy of servant leadership inherited from those that came before. “They have taught the rest of us the value of camaraderie and friendship, of being thoughtful and deliberate and above all, of being patient.” Chairman Haynes said. The growth of AFC is attributable to years of service by prior directors and must be sustained with the continued work and diligence of its current and future leaders. “Eighty-five years is a historic milestone,” said Haynes. “There is not much in this world that lasts for 85 years anymore, and it is a privilege to be part of an organization like AFC that has stood the test of time.” Following in the spirit of service, AFC was honored to present a donation to Big Oak Ranch in the amount of $5.000. With matching donations from GreenPoint Ag, Bonnie Plants, AFC Feed and CoBank, Big Oak Ranch received a total of $25,000 following the annual meeting. Just like AFC’s efforts to serve and safeguard Alabama’s agricultural community, Big Oak Ranch provides a safe haven for at-risk children to provide an opportunity for a future they might not otherwise achieve.

Brad Benson, AFC Vice President & Corporate Controller, presented a $25,000 check to Kyle Cantrell, Big Oak Ranch Director of Operations. (Photo Credit: Studio Panache)

85th Annual Membership Meeting

OPENING SESSION KEYNOTE SPEAKER

DR. DELATORRO MCNEAL

BY JESSIE SHOOK

Photo Credit: Studio Panache

Dr. Delatorro McNeal opened the 85th Annual Membership Meeting in Montgomery, Alabama with an energetic and inspiring message. With his infectious laugh, he began his presentation by having the audience stand and chant “I feel good,” loudly, in the packed auditorium. Dr. McNeal is an internationally renowned Peak Performance Expert. The Tampa, Florida, native and father of two daughters specializes in powerful, interactive experiences where he teaches business professionals to reach their peak performance within their company with psychology and methodology. Dr. McNeal described his presentation as a roller coaster ride. “We are going to have a lot of highs and lows, ins and outs over the next hour,” he said. “Here is my promise to you: if you let me, I will change your life.” During Dr. McNeal’s presentation, participants learned how to develop the emotional muscle to strive for peak performance daily. They identified the best peak states to put themselves in to win consistently and align actions and habits with the attributes of top performers. They learned to think creatively about how to improve their performance, change their attitudes toward work and increase passion, while also increasing their commitment to personal excellence and learning to lead within their organization with a greater sense of purpose and certainty. Dr. McNeal’s presentation was interactive from the start. He asked everyone in the audience to stand up and dance. “Did you know that according to neuroscience, when you dance, you are literally doing brain surgery on yourself,” he said. “Your brain literally releases four happy chemicals inside your head every time you dance.”

WILL YOU BE BETTER TODAY THAN YOU WERE YESTERDAY? WILL YOU MAKE A SIMPLE DAILY DECISION TO BETTER YOUR BEST?

Dr. Delatorro Mcneal

BEING THE BEST

“You will never be able to out earn your own self-concept.” – Brian Tracy After everyone in the audience stood up and did their jig, Dr. McNeal began explaining performance beyond goals – how to take your best and top it. He stated how important it is to know that you are the best and we are the best in our industry. This goes hand-in-hand with the belief that your best can be bettered each day and that small changes and improvements compound our growth over time. “Every single day life gives us one open invitation,” Dr. McNeal said. “Will you be better today than you were yesterday?”

COMMITMENT TO CHANGE

“Either proactively lead change or reactively be changed by change.” The first peak performance idea is the commitment to change. With how much the world is changing every day, Dr. McNeal stressed the importance of “jumping on the change train.” You cannot stand in the way of change; you will get run over. You cannot let change pass you by; you will be left behind. Dr. McNeal gave the example of Blockbuster. While everyone has fond memories of renting movies from Blockbuster, when change knocked at the door, they let it pass them by. Now, Blockbuster doesn’t even exist.

ATTITUDE

“The lion doesn’t allow its limitations to keep it from being king. He is king because he believes.”

Attitude is another key component to the three peak performance ideas. Dr. McNeal gave the example of the lion. While the lion is not the biggest, tallest, smartest or fastest animal in the jungle, he is still known as the king – all because of the attitude he exudes.

Attitude can be changed by making mindset shifts, such as focusing on excellence versus perfection. Instead of focusing on perfection and how things appear, focus on the reason for the task and the results needed for it to be successful. Other mindset shifts can be made by taking an obligation and turning it into opportunity. “Instead of saying ‘I have to,’ say ‘I get to…’” Dr. McNeal explained. “’This is happening to me,’ to ‘this is happening for me.’”

RESILIENCE

“Life only tackles the person with the football – value what you are carrying.” Resilience is the process of adapting well in the face of adversity. In this segment, Dr. McNeal referenced his mother, Olivia. She always told him “You can either be the racquetball or the egg. While the egg will break when it is dropped, the racquetball will bounce back. It may not always look pretty in the bounce back, but it comes out on the other side.” Resilience gives you the power to overcome difficulties. Make shifts from being the victim to being the victor, turning failure into fertilizer, and changing “I’m stupid” to “I’m learning.” Just like with your attitude shifts, these will make you more resilient in overcoming challenges.”

LIVE MORE

Dr. McNeal ended by reminding the audience of the importance of having fun in life. “I’m not the motivational speaker telling you to work harder, you are already doing that,” he said. “I’m gonna tell you to live more, have more fun and enjoy the journey that you are on.” The advice of Dr. McNeal was repeated throughout the remainder of the meeting, proving his impact on the audience. Change is a constant in agriculture every single day and Alabama Farmers Cooperative will be a part of that change, not left behind. For more information about Dr. McNeal and his resources visit his website: www.delatorro.com.

85th Annual Membership Meeting

E.P. GARRETT MANAGER OF THE YEAR AWARD

DANIEL SALTER

BY JESSIE SHOOK

The recipient of the 2021 E.P. Garrett Manager of the Year Award, Daniel Salter, began his journey with Alabama Farmers Cooperative and Quality Cooperative, Inc. with a phone call from past General Manager and 2016 Manager of the Year, Ryan Williams. Salter was assistant manager at an auto shop down the road from the Co-op. After Williams’ persistence, Salter decided to consider the opportunity. “The last time he called it kinda just struck a nerve and I felt like I needed to hear him out,” Salter said. “I started two weeks later.” Salter had been in retail most of his life with an agriculture background which made the transition seamless. He was assistant manager for three years before becoming General Manager of Quality Co-op and Salter said it fit like a glove right from the beginning. He knew he made the right choice. “It’s all about the people,” Salter added. “It’s not always the name on the side of the building, even though AFC has a very reputable name – it’s the people that you work with.” When asked why he enjoys working at the Co-op, Salter reiterated the most important thing to him – people. “I enjoy what I do because I get to work with so many different people,” Salter said. “While we are a rural store, we are under the umbrella of a large company that has the same values and ideals that I do. I don’t think a person should dread coming to work or dislike what they do – I couldn’t imagine liking anything else better.” Surprised wasn’t the word Salter used when his name was announced as Manager of the Year. “I was actually kinda shocked,” Salter said. “I knew that our store numbers were really good but you never know. I’ve never needed an award to validate what we do but it certainly tells us that we are on the right track.”

Daniel Salter was surprised when his whole family was there to watch him receive the E.P. Garrett Manager of the Year Award. (Photo Credit: Studio Panache)

When Salter accepted his award, he was greeted by his family. His son, Elijah Daniel (4), joined him on stage, making this moment even more special. “That’s what it’s all about,” Salter said. “He loves it. He always tells me he’s going to be a Co-op man and working for a company that is very accepting of families means a lot. Just like inviting my whole family to see me accept this award … what company does that?”

Family is as important to Salter as it is to AFC. He described the importance of having a supportive family at home. “They live this every day, just like I do and it’s one thing to win something, it’s a totally different feeling when someone is there to see you accept it,” Salter added. Salter said his success at the Co-op comes from staying humble and putting his customers and employees first. “My belief is that I don’t have all the answers and I have a willingness to listen to others, to customers and to the people I work with,” he said. “I am a people person first and foremost, I try to make the Co-op a very good atmosphere for the employees because I understand that the employees are the most important commodities that we have.”

Customer service is also something Salter keeps at the forefront. “I’m really big on customer service – if we can’t do anything else right, we can at least ace customer service,” he added. Salter also believes that the leadership throughout AFC contributed to his growth and ability to win this award. “I think what contributed to me winning this

Family is as important to Salter as it is to AFC. award was AFC having the He described the importance of having a supportive correct leadership,” Salter family at home and how it meant the world to him said. “Having the right to have them present to see him accept his award. people in place to navigate me through the learning process and once again, I don’t have all the answers, but some people do, and you’ve got to be willing to listen to those people,” said Salter. Salter expressed how all the right people have to be in place at every level of this business to have success. “’The people that actually contribute to the award a lot of times never get recognized and it’s not just me or the people that work at Quality Co-op,” Salter said. “It’s everybody that answers the phone when I call, the people that I email when I need product, the people that make sure I get that product and don’t lose a sale – it’s everything working together to make that happen. Everyone should take pride in any manager winning because they certainly didn’t do it on their own.”

85th Annual Membership Meeting

BREAKFAST KEYNOTE SPEAKER

BRETT BRUGGEMAN

BY JESSIE SHOOK

As President and Chief Executive Officer Rivers Myres introduced Brett Bruggeman at the 85th Annual Membership Meeting, he described Bruggeman as “authentic” and “a man of his word.” “When he tells you something, you can count on it. He’s going to do everything possible to make it happen,” Myres said. Brett Bruggeman is the President of WinField United and Executive Vice President of Land O’Lakes, Inc. His role focuses on delivering data-backed, insight-driven agronomics, operational excellence and sustainable solutions to help agricultural retailers meet farmers’ needs. Bruggeman began his career with Land O’Lakes, Inc. in 2015 with the merger of Land O’Lakes and United Suppliers seed and crop protection products businesses, which is known today as WinField United. Bruggeman explained the importance of AFC’s Annual Membership Meeting and how having the leadership and membership together was a special event and an opportunity to show the commitment everyone has for this industry. “The reality is, there are some opportunities or hurdles, however you want to look at it,” Bruggeman said. “And when you hear the commitment of everyone, it’s a pretty big deal.”

Bruggeman sees nothing but opportunities. Knowing the concern for the current market, he described what is happening and what we are going to do. “It’s probably the biggest opportunity, at least in my 30-plus years, that I think we have as a system to take advantage of,” he added. “You have something special, and we need to make sure we keep pushing.”

Photo Credit: Jessie Shook

WHAT’S HAPPENING IN THE MARKET

While some may say that the market has always been ever-changing, Bruggeman wants everyone to stop and think about the volume of change and the rate of change. In less than 24 months, 20% of urea and 20% of MAP/DAP have been cut off; there are four new CEOs with our competition, five new leads with manufacturers and $30 billion invested in new ag technology. “This is a fast train, and it’s not to underestimate what we can do or not,” Bruggeman said. “It’s to get your mindset that there is always change but it’s probably at the highest

volume and highest speed that we’ve ever felt.”

Bruggeman stated that many are blaming supply chain problems on COVID-19, but supply issues started back in 2016 with China’s president. He began implementing strict environmental standards which led to manufacturing plants shutting down or relocating causing supply disruptions. Next is inventory – in 2017 inventory levels were at 130%. “All the different manufacturers were coming together,” Bruggeman said. “Everyone was producing, and the market was shrinking, the inventory was growing. Since then, our working inventory is not 130%, it is closer to 25%.” In 2018, tariffs were added to existing duties on imports into the U.S. This 15-25% increase in tariffs caused fewer products to come from China. This was followed by COVID-19 in 2020 and port infrastructure issues. Weather caused supply issues in Texas in 2021 along with hurricanes. “Also in 2021, North America is no longer the most profitable place for manufacturers to sell their product, it’s better in Brazil,” Bruggeman added.

This also leads to crop protection issues. The product supply issues experienced in 2021 will be the same in 2022. Packaging issues, transportation delays and Gulf weather events caused significant delays in 2021. WinField United reported 187 vended brands as stocked out, while also experiencing 14 force majeure delays on raw ingredients.

WHAT IS WINFIELD UNITED DOING?

While 2021 may have been full of challenges, Bruggeman explained it was still a great business year for many. Support in these challenging times comes from focusing on optimizing manufacturing locations, innovation of technology, product substitution, reshaping our supply chain and focusing on sustainability. By optimizing manufacturing locations, WinField United brings a new value proposition by being able to make products themselves. Logistics is a big deal and having the footprint brings more capabilities. WinField United is also using technology, including monthly market intel updates. This empowers WinField United and its owners to make better busi-

ness decisions. “The monthly market intel is shared with our field sales teams and is available to your business to help aid in inventory positions during both stable and volatile market swings,” Bruggeman said. Advances also come in the form of product innovation. This includes synthetic AI, biologics, combination AI and bio, and advanced genetics. Management changes in technology include digital and ag technology, AI and automation, ecosystem service and outcome-based markets. Product substitution is an additional consideration. According to Bruggeman, there is plenty of product. It may just not be the same brand or SKU; but, it still does the same job. “There most likely will not be enough for re-spray,” Bruggeman said. “Get the right stuff down the first time.” For the betterment Bruggeman also emphasized that now is the of the entire system, time to focus on sustainability. Carbon diox- WinField United has a ide levels have never been this high in human plan in place to improve history and increase in demand has spurred the supply chain. That investment in new carbon programs. includes removing steps, forecasting demand, visibility of inventory and structured deliveries. By streamlining the process there will be more direct ship, pick up and structured delivery in the form of reliable, twice-weekly delivery in-season. They will utilize Evolve (digital order management system) which will help forecast demand while also allowing visibility of inventory. Bruggeman also emphasized that now is the time to focus on sustainability. Carbon dioxide levels have never been this high in human history and increase in demand has spurred investment in new carbon programs. The WinField United system is uniquely positioned to win with its four pillars. First, retail reach – 4,000 salespeople and local farmgate relationships. Second, market access – infrastructure and competence. Third, science – innovation and research. Lastly, Land O’Lakes brand – known brands open doors with consumer packaged goods. Just like what we hear from AFC’s very own Rivers Myres, “Watch Us Win Together,” WinField United has set up a system that is positioned to win. “While many players have jumped into the space – no one can bring the context, assets and resources to the challenge like our system,” Bruggeman said. “We not only have the leading agronomic platform, but also the infrastructure to deliver on market needs.”

85th Annual Membership Meeting

GUEST PROGRAM

A CREATIVE EXPERIENCE

Creativity was blooming at AFC’s 85th Annual Membership Meeting. The guest program was a creative experience with Jess Margeson from Frou Frou Floral Design. Frou Frou creates beautiful floral arrangements for a variety of occasions – from weddings and corporate events to bridal showers and birthday and holiday parties. Jess Margeson founded Frou Frou after she moved to the Auburn/Opelika area. Jess’ work has been featured in Southern Weddings, East Alabama Living and Southern Living. During the guest program, participants created beautiful centerpieces for the dinner tables at AFC’s Awards Banquet. This added a beautiful and personal touch and participants were able to take their floral arrangements home following dinner.

ENTERTAINMENT BY SHELBY DARRALL

The entertainment for AFC’s 85th Annual Membership Meeting was rising country artist Shelby Darrall. The California native grew up with a love of music that was inspired by her father, Chuck Darrall, and his band, SilverCreek. Darrell grew up performing in the tasting rooms of wineries in Napa Valley. She moved to Nashville to pursue her musical dreams and quickly gained respect in the Nashville songwriting community. She has collaborated with artists such as Jake Owen, Larry Fleet and Josh Kerr, and recently opened for Little Big Town.