Coordinated marketing should benefit farmers

This year, a wheat farmer may have gained more than $4,000 from 100 acres of wheat by holding the grain from wheat harvest in June to sell now as drought lowers supplies to drive up prices.

The gain is figured from prices supplied by Dick Tippin, Team Marketing Alliance representative at Cooperative Grain and Supply in Hillsboro.

The price of wheat Friday was $4.34 a bushel compared to close to $3.00 a bushel at harvest. It can be assumed there were wheat yields of 30 bushels or more an acre multiplied by a $l.34 a bushel difference less a 3- cents-a -bushel storage fee per month if held at the co-op.

Drought is driving all grain prices up, and is adding to a two-year-old effort by area grain cooperatives to add stability and added profits for farmers. The price of milo was $4.42 a hundred pounds, corn was $2.71 a bushel and soybeans was $5.44 a bushel.

Lyman Adams, manager at Cooperative Grain, said TMA, which was formed at wheat harvest in 2,000 by four cooperaties, has put the co-ops between farmers and terminal markets, “so we can go out there and fight for them. It’s given us an advantage in size and control. We have a lot more opportunity in marketing.”

Adams said terminals have been trending toward trying to get farmers to bring grain directly to them, cutting out country elevators, but it can also leave farmers more vulnerable to terminal dictates.

Tippin explained that the member cooperatives together control a bigger geographic area, a larger pool of grain for bargaining, and added sales capability. It gives co-ops with halted railroad service better access to markets to be in partnership with co-ops that have rail siding, he said.

The member cooperatives are Cooperative Grain, Farmers Cooperataive Elevator Co. at Halstead, Mid Kansas Cooperative at Moundridge, and Farmers Cooperative at Nickerson with the main office in Moundridge. Together the cooperatives own 40 country elevator facilities for the handling of bulk grain.

Tippin said all member grain producers of all four cooperatives are benefiting from added money per bushel for crops.

The cooperatives are selling and transporting grain directly to terminal companies such as Cargill, ADM Farmland, DeBruce, Bartlett, and the High Plains ethanol plant at Colwich. They have trucked grain to water transport at the port in Oklahoma.

As the grain division for the four local cooperaties, TMA passes back all profits to them at year’s end, and pays a “put thru charge” to each elevator for bushels handled along with storage.

Tippin said around 70 Cooperative Grain members also sign up for TMA’s farm marketing program in which the producer pays a fee for marketing advice such as help in locking in acceptable prices in the futures market for grain delivery at harvest.

For instance, Tippin said, new crop prices Friday that could have been locked in for delivery on harvest were $3.51 for wheat next summer, $4.41 for milo this fall, $2.68 for corn this fall, and $5.06 for beans this fall.

Tippin said TMA offers producers in the marketing program specific recommendations for execution through cash delivered contracts, help in developing a marketing plan and updates throughout the marketing year, crop insurance recommendations incorporated in a marketing plan, producer control of the timing and executions, and marketing based on individual needs.

TMA’s outlined goal strategy says, “For most ag producers, trying to control and manage the grain marketing side of their operation leaves them feeling confused and frustrated.

“In today’s complex global marketplace, grain operations profitability hinges directly on how we manage marketing. The challenge is using all the information available today, and putting it all together to develop a specific market plan for your operation’s needs.

“The goal of the marketing agreement is to market customers’ grain at above average prices year after year, which is accomplished by utilizing the implementation of a risk management marketing plan.

“The only marketing decision made by the customer, is to decide when to let the TMA maketing specialist go to work.”

TMA also can pool grain as a Commodity Marketing Associate of the U.S. Dept. of Agriculture, therefore saving producers trips to the local USDA office by using the government loan program, and collecting loan deficiency payments upon the producer’s behalf.

In short, Tippin said, the program allows the farmer to concentrate on producing grain while someone else does some of the market worry.

Farmers who store grain on the farm can contact TMA merchandisers when it is time to sell, and TMA can give them bids for self-delivery to local markets or with TMA providing transportation.

Tippin reminds producers that TMA gives them the best of two worlds by tailor-making a program that fits their farm while giving them the leverage of a large marketing pool of grain.

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