Art of Grain Merchandising

Jason Wheeler

Recent Posts

Why Low Grain Prices Lead To Higher Costs (And Why They Don’t Have To)

Posted by Jason Wheeler

Aug 23, 2016 11:00:00 AM

Some costs in business are unavoidable. Production Agriculture is no different. It seems like everyone is trying to take a piece from you at every turn sometimes and you are the one taking all the risk and feeding the world. You try and cut costs where you can and be as efficient as possible, but there is just a lot that goes into producing grain. It takes land, seed, fertilizer, chemical, fuel, equipment, and labor just to name a few. No matter the year or the circumstances, you have to pay those bills and many others.

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24 Excuses to Delay Farm Marketing Decisions

Posted by Jason Wheeler

Jan 21, 2016 4:30:00 PM

If you have tried to originate grain for a day or for a lifetime, you’ve heard plenty of reasons NOT to sell grain. “OK,” you say, “why don’t we go ahead and put in an offer to sell the grain at a price that would work for you?” Then you find out there are even more excuses than you realized. Some of them are reasonable and some of them… not so much.

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2016: The Year Your Grain Business Really Grows

Posted by Jason Wheeler

Jan 5, 2016 11:00:00 AM

In order for any business to be postured for long term success, it needs skilled employees. Hiring employees that already have the skills is ideal, but not always possible. Even when you can, every employee can get better at their craft and grow themselves, which will in turn enhance the company they are working for. The grain business is a relationship business as we all know and you need your customers to have relationships with the most skilled staff you can assemble for your operation to maximize its potential.

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Fact or Fiction? Farm Marketing with Farm Storage

Posted by Jason Wheeler

Nov 24, 2015 11:00:00 AM

 

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28 Ways to Know You're Married to a Grain Merchandiser

Posted by Jason Wheeler

Jun 16, 2015 11:00:00 AM

Being a grain merchandiser can be a pretty lonely existence. There just aren't that many people on the planet that truly understand what a grain merchandiser does. However, there a few special people who have vowed a lifelong commitment to this rare breed. Although grain merchandising doesn't make a lot of sense to them, they appreciate our dedication and our passion and are always there to support the crazy hours and the constant stream of phone calls about rejected loads and other logistical emergencies. 

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What do USDA Reports Mean to your Farm Marketing?

Posted by Jason Wheeler

Apr 7, 2015 11:00:00 AM

When the USDA Crop Report comes out, it is always the talk of the grain business. People making predictions, posturing for a big rally or a big freefall, or breathlessly watching a quote screen. Sometimes it's much ado about nothing, but other times we do see the fireworks that some anticipate. It makes for some intense moments of greed, hope, and fear all rolled up into one. 

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How to Avoid Farm Marketing Scams

Posted by Jason Wheeler

Mar 31, 2015 11:00:00 AM

It seems like each crop year that comes around brings new types of contracts with new promises. Of course, the years of low prices that make it harder to buy grain mean even more contracts with even more bells and whistles. It's enough to make your head spin.

Many times, the "new" contracts are really just new names for old contracts. To say it as kindly as I can, they didn't change the names of these contracts because they worked out well for the people who used them.

Once you get outside of simple, straightforward contracts where everybody knows exactly what they are getting into, there can be some troubling unknowns: what price is sold, what basis is sold, how many bushels are sold, etc. We all know when one of those goes wrong, they can go terribly wrong. All too often, more than one of those things can go wrong at the same time.

Of course, the reason these contracts come about is because they can work great if conditions are right. So, the key is to truly understand all the possible outcomes of each contract BEFORE you enter into it. This can be a challenge in and of itself because, much of the time, the person promoting the contract doesn't even know how it works.

Here are a couple of ways to look at new or unknown farm marketing contracts that can help make sure you fully understand the risks involved:

1) Understand that there is no such thing as a premium without a transfer of risk. If the contract offers to give you a higher price, a new farm bin, an iPad, or something else, they are also asking you to accept some risk. Discovering that risk will be difficult as the buyer typically is more trained on explaining the benefits than explaining the risks, but understand there is risk there and you should know what it is before you sign the dotted line.

2) Ask extreme hypothetical questions. What if prices go to $1.00 and I don't make a crop? What if prices go to $87.00 and I don't make a crop? What happens if basis goes to -300? +400? You get the idea. Questions like these tend to flesh out the weaknesses in these contracts.

For an in depth discussion of how many of these farm marketing contracts work and how to compete with them or use them, click below for information on our Grain Origination Course.

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8 Grain Elevator Policies That Hurt Profitability

Posted by Jason Wheeler

Jan 6, 2015 11:00:00 AM

Over the last decade of traveling the country and visiting with grain elevator managers and merchandisers, I’ve seen and heard some pretty amazing ways that people do business. Some are incredibly ingenious and others are off the charts on the other end of the spectrum. Many times it’s honest mistakes and misunderstanding that drive these policies, but they can directly hurt a company’s chance at making money. I’d like to share several of these poor policies with you today.

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Price Later Fees Part 2: Why Grain Elevators Lose Money Charging Them

Posted by Jason Wheeler

Oct 7, 2014 11:00:00 AM

Price Later (PL) Fees are unlike any other fees charged by grain elevators. For a background on PL Fees and what causes them to change, check out Part 1 of this Blog Series HERE. Even those with intimate knowledge of PL fees often don’t understand the full impact and purpose behind them.

There are 2 common misconceptions related to PL that can be dangerous to a grain elevator’s profitability if the grain merchandiser believes them:

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Topics: Grain Merchandising

Price Later Fees Part 1: Changing Fees & the Grain Merchandising Behind It

Posted by Jason Wheeler

Sep 23, 2014 11:00:00 AM

Depending on what area you are in, you may hear it called Price Later (PL), Delayed Price (DP), or No Price Established (NPE). All of these terms describe the same type of contract: the farmer gives legal title of the grain to the commercial grain handler upon delivery, and has the option of waiting for some amount of time afterward to set the price and basis. We’ll refer to it as PL for this blog post.

The fee charged for this service can vary greatly from year to year or even month to month. There are a few market forces that cause this variation: Volume, Spreads, and Basis. These factors are all directly related to the grain merchandising for the grain handler.

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Topics: Grain Merchandising