|
South Central NE | Well said John. I agree 100%. You must get to a point where you control your own grain stocks because that is a big piece in the puzzle in controlling your own destiny. Whenever you do your hedging with your own money you can control where the grain is delivered. That is one huge bargaining chip. Then you are in a position to actually merchandise your basis by taking bids. We have found that most elevators have from 5 to 10 cents cushion in their basis bids. Sometimes even more! They may also make concessions on picking up your grain which with the cost of fuel can be significant. But the minute you HTA or hedge your grain in some way thru the elevator (COOP or private) you are at their mercy basis wise. And DPing grain is by far the worst. An old friend of mine, who at one time owned a small local elevator, told me that the DP was his biggest profit center. He said every time he mentioned the word "free" farmers would come running. He never really explained the mechanics of it so maybe someone else can give us that. It is great for the elevator because they no longer have to bid to get that grain and they can ship it as needed. Why? Because you have given up ownership (title) of your own product. And you will therefore be at the far end of the list of creditors in the case of an elevators financial failure... Thank-you
Edited by Irrigate NE 1/10/2014 06:59
| |
|
Do you think this Co-op elevator is ethical?
