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who buys the wheat?
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Ed Boysun
Posted 9/22/2010 10:33 (#1369532 - in reply to #1369036)
Subject: Re: who buys the wheat?



Agent Orange: Friendly fire that keeps on burning.

Do you think you are capable of doing it? Used to be, that some locals would order in a boxcar, cooper it (remember grain doors?), fill it up through a gap left at the top of the sliding doors, ship it to Minneapolis, have it graded, and receive a check sometime later. High single car freight rates and lack of end buyers wanting to deal with just one car contributed to the end of the practice. You also had the possibility of paying demurrage charges on the car, if it wasn't loaded timely, if you overloaded the car, you needed to pay extra, if you did a poor job coopering and grain spilled on the way to the market, you didn't get paid for those bushels, if the miller wanted 14% pro. and the official grade came in @ 13.9%, you had a car sitting in Minneapolis that you needed to find a new home for and pay demurrage on until it was emptied. If it had too much dockage, low DHV count, low falling numbers, or too much moisture, it was the same deal; you were a sheep among wolves as you tried to get rid of a carload of wheat.

Some time later, a bunch got together (remember the NFO?) and got into loading 26 and 52 car unit trains. Some of them were loaded with trucks feeding augers, chuted into the tops of hopper cars that were on a siding. That wasn't real efficient as they had a hard time blending so each car had the proper grade and cars that didn't grade right got kicked out of the contract and were again looking for a home. Next step in the process was for the NFO bunch to build their own elevator and buy or upgrade a siding so it could handle 52 car units. Built in the 80s, the elevator is just a few scraps of tin today and no one ever talks much about the NFO anymore.

Myself; I'm pretty satisfied with just being a commodity producer and price taker. It seems to pay the bills around here and even provide a few frills for my chosen lifestyle and level of ambition. If you are really interested in getting above the commodity and into the "product" pricing structure, the first stop would be organic. Those guys don't need to deal with elevators and usually go straight to the users. Next step would be something like Dean Folkvord did, in starting Wheat Montana. He started selling his wheat crop direct to the shopper, in the form of a loaf of bread. Of course, that's a completely different level of skill sets and time required. He did cut out the middleman though.

That's not for me.

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