Hopper, Dump O/O's & Drivers

He's on the power-only plan with Schneider right now building up some bucks. Sounds like he's leaning toward doing that for a while. He had sort of a B.S. day with empties not being where they were supposed to be (300 miles OOR), so I guess we'll see how long that keeps up or if it was unusual.

 

wondering if anyone has any insight to this grain sales business.

So the farmers grow the corn (for example) and have huge storage bins. This corn is then bought by the larger grain elevators who buy from all the farmers in the area. This is then resold again to the major national firms such as cargill and tyson with plants all over every state.

From what I understand, Corn is a commodity and the price is listed daily or weekly. So WHO does that price apply to? The farmer? the elevator? the national outfit? or whomever buys from them?

I'm hatching a scheme I think but there's a lot of unanswered questions and things to learn. The outfit that bought most of the grain put a lot of shipping on hold for various reasons. The farmers also have a lot of bushels unspoken for and it is slow going getting what is sold out of here.

Now the farmer is not Eclipse customer, and I'm sure the farmer can't compete with the elevator that resold to cargill.... but I bet I can buy and sell the corn and then haul it... and I bet on consignment too.

It couldn't be that hard, reason being, these companies buy EVERYTHING available. Even at Cargill it said to take a business card if they didn't buy from you last year or if you have more to sell or another source.

 

Well Pharm, I don't have good enough working knowledge of the grain merchandising business to be able to explain it, but I can share a few thoughts with you.

I'm not sure how it works in the south, but around here, the prices are based on the Chicago Board of Trade, traded daily, and overnight even. The elevators base their bids off of the board of trade price, plus or minus the basis, (usually minus). Most farmers I know of contract a good portion of their grain in advance to spread out their risk.

I know of a company near here that does exactly what you are talking about, buys grain directly from farmers, trucks it to a terminal, and markets it themselves. Basically a grain dealer with trucks instead of bins, (although they do own a small elevator now), lets the farmers supply the storage. But they have been around a while now and have probably 10 trucks and several office people to do the marketing, dispatching, etc. I'm sure they aren't the only outfit that does it like that, so yes, you do have a good idea.

But here's the part where I throw cold water on your idea. To legally do that, you need a grain dealers license. In Illinois the last I knew, you have to put up a $100,000 bond to get a license, basically to protect the farmers of a grain elevator bankruptcy. That may have changed, I don't know, $100,000 doesn't go too far anymore.

The other thing is, the grain business is a cold and heartless business. ADM, Cargill, any other nationwide or worldwide agribusiness didn't get to be that big by playing nice. Not saying they're crooks, but they play to win. If the market moves the wrong way for you, and you get pinched, they WILL crush you and not bat an eye.

Please understand I'm not trying to be mean, but being a trucker and a grain dealer both would be a whale of an undertaking for one person.

 

Thanks for what you guys have to say.

A grain/broker license would certainly be a pain. I don't know that I was talking about actually becoming a dealer or actually laying out expense to buy the grain.

More of what I had in mind was eliminating conflicts of interest and moving the extra grain. They produced more than expected which is unsold. I figure they cannot go direct to the guys I've been hauling to, and the guys setting up the hauling are dragging their feet so the loads aren't available.

I was thinking I could pose as the seller and contact the buyer directly and see if they could use 50k or more bushels to begin delivering immediately. I would bill them for all of it and the farmer would front the corn knowing it is moving quicker and the end-payer is proven through other channels.

Since the corn is only a couple hours away, I could also watch the market and try to avoid financial upsets that way.

I have a feeling though that I would just end up learning quickly that there is a reason shipping gets put on hold so long. But man it sure would be nice to get 75 cents or more a bushel in shipping for 100 miles one way all day long!

It's there to be sold and shipped, I'm there to ship it and ready to take on some headaches... seems there's a solution there somewhere... I"ll keep digging and thinking about it.

If anyone has any referalls to someone who has done/tried this, I'd love to pick their brains for a couple hours.

 

Well, depends, if he knows where he went wrong and honest enough to pinpoint it.

I'm avoiding any delusions of grandeur, but I think the idea has merit and just looking to solve a problem.