News

CEO visited Farmers' Grain in Litchfield with Spencer Janssen. What has evolved over the past few years is Spencer's refined and succinct way to explain the grain market to our young entrepreneurs.

"When the farmers harvest their grain it has to go somewhere. They can store it themselves. They can sell it direct to buyers. Or, they can store it or sell it to [the grain elevator]." Spencer outlined the risks and costs for the farmers to store or sell their grain and then how those same risks and costs are transferred to the grain elevator to store or buy the grain. "If we buy a million bushels of grain, for example, and we don't sell it for 5 months, what risks and costs do we incur?" The team listed several costs; there are loans for building storage bins, labor, insurance, electricity, pesticides, "which also requires a substantial amount of cash flow."

Spencer explained that offsetting those costs is the result of buying and selling grain on the Chicago Board of Trade. "We sell according to the basis defined by the CBOT." Relative to the price of grain, for example, is the ability to buy and sell according to the basis. "If we do that well, we make a profit that [in turn] pays for the expenses [we accrued] when we bought the grain to begin with."

Montgomery CEO Calendar


Add this calendar to your iPhone
Print Calendar

News Archive

Montgomery CEO Calendar