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NC Iowa | I have thought about doing what you just described. But the harder i thought about it, the more I felt like that math didn't work. Lets walk through the math using general numbers. Lets say I sold 10,000bu of corn to the ethanol plant for $5.00. Then the price falls one dollar before you have to deliver the corn. So let say the local elevator price is now down to $3.80. There is a $0.20 out charge to buy corn from your elevator. That means my purchase price is $4.00. Simple math would say I just made a dollar(minus trucking cost lets say $0.15). So if we stop there it would show that I just made $8500. There is just one big thing that happens that is over looked is the value of the corn in my bin has dropped in value $10,000. So then didn't I really lose $1,500(the trucking charge)? If you think, well I'll just wait till corn goes back up a dollar to sell the corn in the bin. Then wouldn't you be better off just buying it back on the board? Buying on the board would save the trucking expense and load out charge.
Am I looking at it too hard? I your analysis you made an easy $0.30. But I feel you actually lost $0.20 because you made 30 cents on the corn you bought but lost 50 cents on the corn in your bin. | |
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Dumb question
