The Four Cent Merchandising Challenge: Where Can Your Elevator Find Four More Cents?

What could four cents change at your elevator? When you look at what actually reaches the bottom line, the answer might surprise you.

That’s why we created White Commercial’s Four Cent Merchandising Challenge. We’re not looking for one spectacular trade. We’re looking for small, repeatable improvements in the grain merchandising decisions your team already makes every day.

When I started doing peer analysis at White Commercial in 2008, I thought financial ratios would get everyone excited about improving performance...They didn’t.

Merchandisers weren’t looking to become bankers or CPAs. They wanted to run better grain businesses. I needed a way to connect the financial statements to something they could actually use. That led me to gross profit per bushel of licensed storage space. Take your gross profit, divide it by your licensed capacity, and you have a starting point for a much more useful conversation.

What Is One Cent Actually Worth?

For companies participating in our 2025 survey, median gross profit was 70 cents per bushel of space. Expenses, including depreciation and interest, were 57 cents, leaving 13 cents of net income. Those figures reflect our participating customer group, not a guaranteed result for every elevator. Your numbers may look different. That’s why the first step is knowing your own.

Seventy cents sounds like room to maneuver, thirteen cents puts things in perspective. Using that 13-cent starting point, one additional cent represents roughly 8% more net income. Two cents is about 15%, three cents is 23%, and four cents is 31%. That assumes the additional gross profit reaches the bottom line without additional expenses. We’re also talking about improvement per bushel of space, not automatically an extra penny on every bushel handled. Still, it makes you look at a penny differently.

Think about how casually we sometimes treat one when setting a bid or evaluating a sale. When the profit you keep is measured in cents, those small decisions add up. So where do we start looking?

Start With Grain Origination

Origination is the foundation. If you overpay for grain, everything afterward becomes harder. Even an excellent selling basis may not make up for a poor buying decision.

Start by working backward. Where can you traditionally sell? What freight and other costs come out? What buy basis leaves room for the margin you need?

That means tracking your markets and questioning habits. Even something as routine as how you round a bid deserves a look. It may seem insignificant on one transaction, but what does that habit mean across the entire business? The goal is to know what works before you make the commitment.

Look Beyond Today's Spot Bid

Once the grain is on a truck and you’re shopping spot bids, there may not be much room left to negotiate. Looking ahead changes the conversation. What delivery periods does the buyer need? Could a larger volume commitment help? Are there terms that work better for both sides?

Instead of asking only, “Who has the best bid today?” ask: “What can we arrange now that meets our margin goal and gives us flexibility until delivery?” Good forward grain sales are about being intentional, not simply finding somewhere to unload.

Know What Your Spreads Are Doing

Which futures month should I use? How much volume should I spread? Did I act too early? Did I wait too long? Those questions are familiar to plenty of good merchandisers.

Harvest brings supply into town faster than the market can use it. Connecting that supply with later demand creates opportunity, but you have to measure it and know how to capture it. Selling for later delivery does not mean waiting until later to make the sale. You may make the sale now and connect the timing through futures spreads. Our tools help measure those opportunities and give your team a more structured way to make the decision.

Shift the Basis Curve Left

Moving the basis chart to the left probably deserves a little explanation, and we’re saving the details for its own session.

The basic idea is connecting when you own the grain with when attractive margins are available. We’ve seen those changes shift an elevator’s basis curve and improve margins. It’s another opportunity to challenge the way things have always been done and ask whether there’s a better way to approach it.

Where Are Your Four Cents?

Bring your team together. Start with gross profit, expenses, and net income per bushel of space. Then look at origination, sales, spreads, and basis ownership. Where are habits making decisions for you? Where would better information give you more confidence? Choose one change you can measure consistently.

You don’t have to find all four cents tomorrow. Start with one. Understand what it’s worth. Then build on it. Where are your four cents? Call White Commercial, and let’s get after it.

There is a risk of loss in futures and options trading. Past performance is not necessarily indicative of future results.