Ethanol plants like this one in Granite Falls, Minnesota, are a boon to farmers. But Kevin McNew, Cash Grain Bids, Inc., Bozeman, Montana, says limited plant bins make farmer storage decisions even more critical.
marketing decisions. One subtle, but the storage space will earn better in both. Furthermore, make sure
important, way ethanol plants have returns on holding their grain. The you have a market adviser who
changed grain marketing is through market will pay more for storage ser- truly understands your local cash
grain-storage decisions. vices as a result of a relative shortage market. Most advisers focus on the
Between 2000 and 2007, corn of bin space. national picture, but there are those
used in ethanol increased by 2,500 who direct their attention to local or
million bushels. Over that same new basis lessons regional conditions. Their services
time period, the amount of grain- Cash grain basis has gotten more can help you pinpoint the best local
storage capacity in the country unpredictable. Blindly doing the marketing options in your area.
increased only 700 million bushels. same cash strategies year after year
will likely be a format for poor per- Look locally for the best
More storage needed formance. For instance, always stor- markets and factor in your
With larger crops being grown to ing grain after harvest or routinely trucking and storage costs. Many
fuel the ethanol industry, there has delivering grain to your favorite times the buyer paying the best price
not been a similar increase in grain buyer likely will leave you short of for delivery today may not be the
bin space. Ethanol plants generally your best pricing options. best overall option when you factor
build only enough bin space to ac- Instead, producers should capital- in storage costs.
commodate a two-week supply, and ize on basis volatility and harness
farmers and commercial elevators that risk into better opportunities. Recognize that your local
have been slow to build up their Here are three steps to take. market is everchanging. Do
storage capacity. your homework at least once a week
The end result is that larger crops Separate out basis and and determine what the best option
at harvest will be met with a weaker futures marketing decisions is for marketing your grain. Chances
basis. However, farmers who have to help you maximize your potential are that the best place to sell your
grain today may not have been the
best market you sold to last month
or perhaps even last week.
learn more Cash Grain bids, inc., 1627 W. main St., Suite 44, bozeman, m T 59715 866/290-1196 | www.cashgrainbids.com
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