MFA Oil committed to development
and marketing of renewable fuels
By Diane Searcy
MFA Director of Communications
hen Jerry Taylor
stepped to the podium
in November 2003 to
address delegates and
employees of MFA Oil
Co., it was a momentous occasion for
him and for his cooperative. MFA Oil
was entering its 75th year in business
and Taylor was addressing the group
for the first time as its president.
Paying tribute to past leaders,
Taylor listed some decisions they made
that ultimately positioned MFA Oil at
or near the top of Missouri’s fuel suppliers
and, in the case of propane, near
the top nationwide. He reminded his
audience that their company had been
conceived in 1929, survived the Great
Depression and the war years, and
then flourished when post-war prosperity
put an automobile in every driveway
and a tractor on every farm.
Turning from the past to his vision
for the future, Taylor promised the
member-owners that, under his leadership,
focus would be placed on making
MFA Oil the trusted rural energy
expert.
To accomplish that, he said, we
must continue to deliver the highest
quality products in the marketplace,
and they must be the right products.
Chief among the right products, he
declared, are biodiesel and ethanolblended
gasoline. He went on to reaffirm
MFA Oil’s continuing commitment
to marketing those products.
Early commitment
MFA Oil’s involvement with renewable
fuels goes back to the late 1970s,
when the company first began distributing
ethanol-blended gasoline, then
known as gasohol. High ethanol prices
forced it to drop the blends after about
a year.
The mid-1980s was a period of
growth for MFA Oil. While maintaining
its agricultural base, the cooperative
entered the convenience store
business and established a series of
company-owned and operated stores,
called Break Time, throughout rural
Missouri. In another move designed to
capture more of the increasingly
mobile, price-conscious customer base,
MFA Oil was one of the first businesses
in the state to actively promote the
unattended fueling site with its Petro-Card 24 operations.
So by 1989, when increased efficiencies
in production of ethanol, the phaseout
of lead in gasoline and changes in
tax laws made marketing ethanol-blended
gasoline cost-efficient, MFA Oil was
perfectly positioned to sell it.
A couple years later, representatives
of the Missouri Soybean
Association approached MFA Oil
management and requested that the
co-op supply diesel fuel for a research
project to be conducted at the
University of Missouri-Columbia.
MFA Oil agreed and began supplying
soy biodiesel to two rural electric
cooperatives in central Missouri. At
the time, however, demand for the
product wasn’t great enough to justify
keeping the biofuel in the company’s
product line.
That changed in 2002. In the wake
of the terrorist attacks on Sept. 11,
Congress and the press increased their
support for renewable fuels, and MFA
Oil’s member-owners, whose crops are
used to formulate biodiesel, started asking
for the product. MFA Oil responded
by making soy biodiesel available to
customers throughout its market area.
All blends were available, but B2,
which the company sold at 2
cents per gallon over the price
of its premium diesel fuel, was
the biggest seller.
Response was immediate.
In a state that has nearly 5
million acres planted to soybeans,
farmers led the way
as consumers embraced the
product MFA Oil marketed
as homegrown fuel-- good
for vehicles and equipment,
good for the environment,
good for America.
Between March and August,
the cooperative sold nearly 2
million gallons of soy biodiesel. In
2003, sales totaled 8.4 million gallons,
and MFA Oil projects an
increase of at least 10 percent in
2004, which means biodiesel would
account for nearly 10 percent of total
diesel sales.
Long history with ethanol
While MFA Oil’s active promotion of
soy biodiesel is relatively new, the cooperative
has a longer history marketing
ethanol-blended gasoline. In the early
1990s, when a federal excise tax reduction
made it feasible to sell the blended
product at the same price as regular
unleaded gasoline, MFA Oil made that
the focus of its marketing efforts at
Break Time convenience stores and
Petro-Card 24 self-fueling sites.
Although both auto and small
engine manufacturers approved the use
of a 10 percent ethanol blend, some
consumers were skeptical and acceptance
of the blended fuel was limited.
But MFA Oil believed in the product
and continued its marketing efforts
throughout the 90s and into the new
millennium. In 2003, the cooperative
sold 32.4 million gallons of super
unleaded gasoline, a 10 percent ethanol
blend, which amounted to 25 percent
of total unleaded sales. Projections are
for a 20-percent increase in 2004.
Also in 2003, MFA Oil started selling
E-85, a blend of 15 percent gasoline
and 85 percent
ethanol, at selected
sites. E-85, which can
be used only in flexible
fuel vehicles, has
the potential to significantly
reduce dependence
on foreign oil
and promote better air
quality.
For more than 30
years, MFA Oil has
been committed to
development and marketing
of renewable
fuels, working closely
with the Missouri
Corn Growers Association and the
Missouri Soybean Association. Jerry
Taylor’s keynote address at the cooperative’s
74th annual meeting was a
rededication of the company’s policy to
aggressively market products that use
crops grown by its farmer-members.
