The Art of Grain Merchandising

grain_merchandising-1People often ask why they should read this book and the answer is quite simple, because merchandising skills changes people’s lives.

You may think this to be a bold statement but it is the truth . . . I’ve seen it happen time and time again. People that learn to trade the basis and develop their merchandising skills - what we like to call “basis eyes” - find it has a profound impact on their lives. There are stories of individuals all over the country that have made a real difference in their business and personal lives as a result of learning the skills of merchandising.

A small country elevator in northwest Indiana with 400,000 bushels of space was barely surviving on the slim margins it was making from storing grain. Then the owners learned how to increase their margins through merchandising and it transformed their business. Today, 20 years later, they operate one of the most successful businesses in the region and have over 4 million bushels of space.

This story is not unique. It happens all the time. As people develop their merchandising skills they improve their margins, become more profitable and their businesses grow. They put up new tanks for the right reasons . . . because they know how to generate profits by merchandising the space.

And, the benefits of merchandising skills go well beyond the financial advantages it offers. People tell me all the time that their jobs are much more fulfilling now that they know how to trade basis.

I met the manager of an elevator/feed mill a few years ago that was on the verge of quitting the grain business. He was working a lot of long hours in his small family owned elevator but never seemed to be getting ahead. Then he and his wife went to their first workshop on grain merchandising and discovered all the opportunities they had been missing by not understanding basis. They immediately embraced the skills of merchandising and are today not only operating a very profitable business but have since bought several additional locations and tripled the amount of grain they handle. The best part of the story is that the merchant constantly tells me now how much he loves his job! Work is a lot more fun and rewarding when you are able to make money and provide services that really help people.

Many of the companies we work with are family owned operations. It is wonderful to see what merchandising skills have been able to do for these families. One merchant I know was getting close to retirement age and was considering selling his elevator since none of his children seemed interested in getting involved in the business. Fortunately, he talked one of his sons into going to a grain merchandising workshop. The son found the idea of basis trading intriguing and decided to give it a chance. He not only found merchandising interesting but today he is one of the best merchants I know. Talk about having “basis eyes,” he does! The family not only didn’t sell the elevator, but they now have all the children working in the business and have since added other locations.  Dad is semi-retired, but you can bet he is very proud to watch his children continue to build the family business.

It is good to see new generations getting involved in the grain business. They bring a fresh perspective and vitality to the business. Giving young people the gift of merchandising skills is one way in which we can attract more of them back to our farming communities and provide them with challenging and rewarding careers.

Learning merchandising skills is not only a life-changing event for individuals, but I’ve seen it impact entire communities. This story involves a local co-op in a small town in Texas. This is a rather sizeable elevator that, at the time, was really struggling, as were the local farmers, despite the fact they produced and handled millions of bushels of grain. The town wasn’t very prosperous either, not much more than a stop light and a run-down convenience store. The co-op decided to hire a new manager to help turn things around. The first thing this manager did was to start an educational program to teach the employees two things - grain merchandising skills and positive farm marketing.

They put together a team that concentrated on helping local farmers to market their crops more profitably.  As a result of their educational efforts they were able to go from storing almost 100% of their crops to buying close to 80% of it before or during harvest. Farmers were able to sell at a profit and put more money in their pockets sooner. The lack of storage revenue wasn’t bad for the elevator; on the contrary, it made more money by merchandising the bushels. The impact this change of direction has had on the local economy has been remarkable. With new dollars circulating in the community, Main Street is quite a different place. There is a new hardware store, a bank, several restaurants and an assortment of shops that draw people to town. It is a thriving community that the people are proud of.

I am honored to know many outstanding merchants who have taken the gift of merchandising skills and made a real difference in their business and their community.

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Topics: Grain Merchandising