The Grain Merchandiser and the End User: Who is the Customer?

When you, the grain merchandiser, think in terms of the buyer/user being your customer – rather than you being his customer – it puts a different light on the relationship.  Customer service is about providing services of value for which the customer is willing to pay a premium – which may come in the form of monetary rewards and/or repeat business (loyalty).  When it comes to molding your relationship with buyers into one of valued customers it is a matter of discovering what customer service means to them and doing what’s possible to meet (or exceed) the expectation.

For this week's blog, we have a guest submission from a successful grain merchandiser in Eastern Iowa. Here is her story of how she started looking at her buyer as a valued customer and achieved great success!

The Story of Kelchen Grain

We are in an area with a lot of farm storage, so the majority of the corn we handle goes direct from farmer bins to a market with multiple large processors. We have always been good at farmer relations, but until recently we were back to back traders with no real buyer relationships. When we bought a load from the farmer, we sold a load to the processor. I don’t think they knew or cared who we were. When we started to see the opportunities of basis trading, it didn’t take long to see that the processors were valuable customers too – just as valuable as the farmers. We started to pay attention to what they wanted and needed.

The first step was to start making bigger sales. We knew the bushels were coming from the farm, and about when, so we started making offers to the processor at value line numbers. There is a noticeable change in our relationship with the buyers now that we sell in hundreds of thousands of bushels instead of hundreds of bushels. We have also been able to prove to them that we have a good idea of where the basis will be in our market, and they take our offers seriously – even if they are above the currently posted bids. We have also worked hard to give them the service they need. If the buyer calls and needs extra trucks this week, we will do our best to get them there. If he needs us to slow down on deliveries, we do that too. It’s not always easy, but he is our customer and we do what we can for him. If he is running out and needs to buy some bushels from us for quick ship, we charge a fair basis but don’t rake him over the coals. Better buyer relationships have improved our farmer relationships as well. When the farmer is ready to ship out of his bins, we almost always have a sale to ship against and can move his grain right away, and we can pass on some of our higher basis or shipping flexibility to the farmer when appropriate.

We have learned that even a big corn processor needs service, and our buyers are just as important to us as customers as our farmers are. This has paid off for us in a big way over the last several months. Last summer when we were trying to get in basis balance, we were able to price 150,000 of a 300,000 bushel new crop sale despite stated company policy of not pricing anything because of our service. One fall, a late corn harvest made it impossible for us to get all of our October contracts delivered on time. The buyer rolled us to Nov with no penalty even as others were being charged to roll. We also believe that our history of service is a meaningful factor when one of our buyers considers an offer we have given him. Our goal is to buy a fair basis when the farmer wants to sell, sell a fair basis when the buyer wants to buy, and provide the best customer service possible to both.

Marilyn Sullivan
Kelchen Grain
Edgewood, IA