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| Grain trader,
I agree with your coop comments or at least they make the easy money.
"Coup has said many times over he isn’t doing anything on the buying side that someone else couldn’t do if they wanted to. "
This is what has me confused if he's Not buying in such a volume that a 1500 acre farmer couldn't buy at the same price levels then why does that farmer need to give him a $52000 check just so they can custom farm 500 acres and receive a $50000 check from coup? They would be better off buying their fertilizer, chemicals, and epley seed corn at the same places he does and save the wear and tear on their equipment. The only reason I can see that they would do this is if they have no other source of financing which if that's the case junior better not be coming back to the farm.
Now if coup has a warehouse full of chemicals and sitting on multiple barge loads or unit train loads a fertilizer and he can make $35 per acre and still save me money vs me buying it direct on the river or from chemical wholesalers then that's different.
Maybe coup was just speaking hypothetically and using this as an example why farmers should get their cost of production in order but I took it like it was doing business with him personally. Maybe he was talking about Acme fert, chem, seed, and crop ins company doing the in his hypothetical vs Coup get your cost of production in line Inc.
Just above this post is a question about using a auger to move transfer fertilizer from a semi. Really nothing special about buying fertilizer by the semi load and wholesale chemicals vs hiring a Co-Op to do all this for you. I'm not saying you can't make it that way but you're definitely leaving a lot of profit on the table.
How would it work with the Co-Op out bidding its own patrons on a cash rent auction? How would the COOP be able to pay more rent to sub it out vs a farmer that is a low cost producer like coup? I'm thinking the 1st time the coop rents a 1000 acres they lose business on a 100000 acres from the other farmers that wanted to rent that ground
Edited by mikeswoh 1/13/2019 18:48
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coup-more high rent?
