Grain Marketing Choices.

This post is in reguards to marketing choices after reading some of the responses to the post below.

I guess here in the midwest we do have choices when it comes to marketing our grain.

I have the choice of selling to my local Coop that I"m a member of, 10 miles away.

A private owned grain elevator 12 miles away.

A Coop down the road 25 miles to the west and another to the east 25 miles.

I would have to go thru a local dealer(coop or private owned)to sell and get paid but could deliver to an ethanol plant 20 miles north in Cedar Rapids.

Then 30 miles south there are several large hog farms that are buying corn as well to feed to hogs. These guys bid a good price for corn but you run the risk of getting a good check if they have money problems.

All licensed grain dealers are covered by the Grain Idemity Fund here in Iowa should they go broke. Which means you are insured against a bad check.

I deal with my local Coop 99% of the time.

Why?? They are always competive on the bids they give me. If they make money off of me they return it to me cause I am one of the owners of the Coop.

How and why do you guys in the outer edges of the grain belt market your grain?

Here locally we have similar options. I've not sold grain for a few years now as I've got a better market for everything (corn, wheat, alfalfa) as silage to a couple of local dairies. But I am current on my choices. Within 14 miles I have a co-op that will take corn, ear or shelled, with limited capacity. Also, one farm store with limited capacity for ear corn only. Either of these can only store around 5000 bushels at one time. Ear corn is 1.00 dollar premium over shelled on a 70 pound bushel weight using the daily paper spot market.

In a larger 30 mile radius are several (more than 10) milling and feed companies that also buy and sell acting as brokers. They take shelled corn, soybeans, and other grains. To my knowledge, as long as I stay within 30 miles we dont have a contracting option. Its call around and find the best price that day, then show up. Once I get out more than 30 miles there are lots of options with river port terminals, brokers, etc. Generally speaking, I found that freight cost more than outweighed any premium I got for not staying local. Also, there are several farmer speculators here who buy corn and particularly soybeans on a match price basis to store in their bins. Im like most people here, no storage except for ear corn.

Traders are required to be bonded here in NY but that does not mean that you will get 100% of the value on a dealer's default. My understanding that it usually runs in the range of 80% recovery but I have heard on occasion of guys receiving under 60%. I keep asking a fellow I know about a bad deal that happened to him a few years ago and the fact he changes the subject when it is brought up tells me he must have got hurt bad. Maybe somebody knows here how NY's bonding is structured.
I would say a big problem that there are few financially strong dealers here and they know it and reflect it in their basis. So if you want a really good price you may have to go with somebody that may be risky in some way (slow to pay or does not pay when promised). Hopefully that will change with corn as a couple of ethanol plants have come on line here. Definitely choppy waters here with something like wheat.
Some other parts of the state are not so bad but then you have to look at cost of transportation to see if it is worth running 60, 80, or 100 miles from home.

We are 20 miles from the nearest elevator. It is privately owned. 50 miles in three different directions to get the Coop. By that I mean that the same coop owns elevators in three different towns and they are all three about 50 miles away. The same privately owned company owns elevators in two of these towns, so we really don't have much option of who we sell to. Either the Coop, who pulled a major $h!++y on its patrons several years ago that many have NOT forgot and some NEVER will, or the privately owned one. They both have pretty much the same types of contracts, forward pricing, minimum pricing, delayed pricing, about any kind you want. Problem is, now they are all full and will not put anything on the ground, and the rail is super slow at delivering and picking up cars. About what the coop did. The board sold the elevator in our town to a local farmer without any patrons knowing about it until it was done. And no other farmer was allowed to bid on it, since it was all done in secret. They had the "annual" meeting the night before the sale became public knowledge and never said a word about it. The manager, who is no longer there, was not a very popular man around this area. Anyway, we are able to get just about any kind of contract that is out there from either elevator.

You don't say where you are from but we have seen a lot of the same things here in NY.

Gary, do you get your inputs from the Coop also? Used to be a Coop here in NY (Agway) but the management ran that outfit in the ground.
What worries me for the future more than grain marketing is input purchases. I hear the Mennonites here have been making considerable efforts to set up their own Coop as well as a federally backed financial institution. If they succeed they will sell to themselves (patrons) for considerably less than the private owned seed and fertilizer dealers will sell to the rest of us. I am guessing that the reason nothing has happened with a Mennonite bank is probably they have no intention of offering services outside of their community which is probably against discrimination laws for government backed banks. Again, just guessing on my part.
I am thinking that one of the hold-ups with their co-op efforts is the suppliers may not wish to alienate their other customers. I think it will come down to when the suppliers think the Mennonites have enough critical mass that it will not hurt too bad if the bridges get burned with the other dealers.
I guess one of the positives of very few single location machinery dealers left is it has left it harder for anybody to get one to obtain their own personal discount versus the rest of the community.
I don't write this because I am prejudiced against the Mennonites but I worry where it will leave guys like me once they get leverage in the local agri-businesses.

I've developed a direct-to-consumer market for most of my ear corn and oats. I have one grain broker I do business with about 40 miles away in Pennsylvania for the rest of the corn and any wheat or grain sorghum I might grow. Most grain business requires trucking 100 miles to the Lancaster, PA area now, except for a flour mill 20 miles away (very fussy) and a new soybean crusher about 50 miles away. All of the other grain brokers, Co-ops, feed mills, etc. that were closer have gone under in the last 15 years.

Here is the Northern Neck of Virginia; Northern Neck is just another term for the land bordered on the north by the Patomac River and the south by the Rappahannock River, on the east by the Chesapeak Bay and the west bt I-95.
Perdue, the chicken company not the university, is the major buyer for our grain. They have either bought up the elevators or paid just enough more until they are all out of business. 30 mile to the south, on the York River is a private elevator and there is a Miller to the west about 35 miles however Perdue sets the prices. Contracts are available but they are pretty simple in dealing with situation like this year. Example is this mine this year--contracted corn for $3.69 and about 120 bu/ac, what I figured I could deliever for sure except this the weather only allowed about 60 bu/ac. When I told the manager I would buy out the rest of the contract, Harvest price was $4.30) he didn't know how to figure it out. 2 months later, after repeated calls, he came up with a buy out of $2.00 bu. When I reminded him of the date I him I would buy out and that it was to be the difference he just started stammering. In the end I know it will be about $1000.
And I won't contract again until I know it is advantagous.

Yours sounds similar to ours. Couple large elevators within 30 miles, couple ethanol plants a little farther. I deliver to a elevator that I like to deal with that is 24 miles away. Sure wish I had that ground that was next to it when I see that farmer hauling in his grain with a tandem wagon load behind his tractor. No semi, no hopper bottom, no plates, no semi insurance. Boy that would be nice.

I don't raise row crops anymore, there is an private elevator 8 miles away that buys corn, beans and wheat. The rice elevators are large corporate owned and are at least 50 miles away. Most farmers here have their own storage and many of them sell direct to the river market about 120 miles away. Corn can be sold to the chicken feed market 50 miles away and there are several small feed mills that buy less than 10000 bushels at a time.

Everything I need for corn and soybean production can be bought from this Coop except machinery.

Yes I buy my fert, seed, pesticides, fuel, and LP from them.

If you want to see your small coops survive get envolved with the board of directors. They hire the manager and keep him headed in the direction you want the coop to go.

Were i live here in southern In we pretty well just have Cargill and 4 ADM"s within 30min of us. We do have an azteca milling about 45min from us but we dont grow any white corn. The local Co-op elevator shut down a while ago and any of the remaining mills are just to far to go for us to make anything. All but one of the adm"s are on the river. So we really dont have many choices. That is why I contract more than sell on delivery.