|
Lubbock, Texas | plowboy - 11/23/2012 11:02
Most of that is true, up to a point. It is not all true absolutely, however. There most certainly are economies gained by taking fertilizer up the supply chain a step or two, and by taking grain down the supply chain a step or two or even farther. The grain enterprise shares labor very well with the farm, as the grain merchandizing and transportation really starts when the farming is done, and the transportation can be done with the same assets and personel who are required for harvest to work. The fertilizer fits well with the grain, because generally speaking you can send grain out and get fertilizer in on the same trucks and the same trips, keeping the trucks running loaded both directions. You also remove considerable overhead from the process by not having the commodities changing ownership and being handled so many times for no reason.
yes but in farming a farmer with 1,600 acres or 4,000 can pretty much cut out the same number of people in the supply chain as the guy with 40,000 acres can
and for the guy with 40,000 acres to cut out more than that is the point at which he goes from being a farmer cutting overhead to someone that has to do business as if they are in the elevator, fuel, seed, chem, and fert business and even if they are doing that for some of their neighbors as well they will still be a VERY SMALL elevator, fuel supplier, seed, chem, and fert dealer compared to some of the ones that will buy at the same levels as they are.....but they will now be subjected to the very same issues those larger guys are subjected to
like if you have an issue and can't get the last 5 truck loads of grain onto the barge before the barge says it is time to shove off because of port/dock cost or because they are going to close the river or because this is the last minute we can shove off and still make it down river to get loaded onto the ship we are meeting in New Orleans......when you are the larger operator in that business you might have other grain sitting in New Orleans you can divert to get the ship filled...you might know someone in the New Orleans area that can trade for 5 trucks of grain for a few cents of profit and a promise of replacement very soon.....you might have 10 barges that are waiting on a closed river so the ship will have to wait because that 10 barges is too much volume to not wait on.....but when you are the "big time farmer" that is the smallest of the small dogs in the push boat and barge business......your one barge will end up and pay a large penalty to someone for not getting there on time
and if you have all of that "margin" (for your grain barge business) spent on farm rent.....you have a financial issue....because your 5 neighbors are not going to just step up and cover the cost of you not getting it done | |
|
a postive spin on the whole ILFF/Stamp farms controversy
