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NW Iowa | Kind of stemming off the thread below.
The purpose of middlemen, in my opinion, is to connect buyers with sellers. In effect, it can expand available markets to both sides. I feel sometimes they are needed and other times they're unnecessary.
That article the other day about Smithfield buying elevators, to me, makes good sense for them. Pigs I watch get feed from the Algona mill they wrote about in the article.
In my opinion, its good business for Smithfield, for E-plants, for any user to buy direct from producers. However, the larger users likely can't source enough directly and need to buy some (most?) from co-ops. But it was mentioned below that they may get better quality from producers. Likely true, especially while using up a large crop like this one that has had large volumes stored outside.
It was also mentioned, concerning users wanting certain characteristics of their feedstocks, users contracting directly with producers. I foresee a day when crop production is contracted with users, same way Smithfield contracts with swine growers. Maybe the rowcropper would own the crop and contract to sell certain varieties to the user. Maybe the user would pay for the inputs they want and pay the grower for land and equipment and labor or whatever. Might greatly reduce the importance of the CBOT to the farmer, much like most swine growers these days could care less what live hogs are on the CME....
Is this mentality contrary to that of a "real farmer"? Seems like a good way to stabilize gross income and reduce risk.
Am I nuts?? | |
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smithfield and middlemen
