Started beans

flying belgian · Sep 29, 2011

Started combining beans today at about 5:00. South central Mn. 12.4% moisture. About 50 bpa. I'm satisfied. Got about 700 bushels out. Sold them a few months back for around 12.50 to 13.00 /bushel so haul them direct to elevator. In my next life I am not going to own a 750 Massey combine. Had to replace a bearing on one of the paddles in the feeder house. Eye, eye, eye. Well got to get some sleep. With this wind blowing I will be able to get an early start tomorrow. Thanks to my bil for helping with that bearing.

John_PA · Sep 30, 2011

Sounds like a good day, minus the bearing!

How does your elevator pre-buy beans?

I wish that was an option for me. I sit and watch the prices drop, knowing I don't have storage. Although, the place I sell to does a grain bank program at 15 cents per bushel a month. I can hold for 10 months and pay them $1.50 per bushel for storage, and then sell in July or august when the price looks good.

Of course, I should be taking that extra couple dollars per bushel profit and setting it aside to buy grain bins. I figure it is easier to let them have the worry about spoilage and moisture content for the 9-10 months I would be holding them.

Get some pictures of those 50 bpa beans!

IaGary · Sep 30, 2011

John are you saying that if you wanted to sell
beans today for January or whatever month delivery
you can not do it?

I do it all the time with any of the elevators
around here. I can price beans or corn today for
delivery for any month I want between now and 2
years from now and maybe out longer yet. When I
sell to the local elevator they turn around and
sell to a processor for the same month. The
elevator figures what they need for a margin for
trucking and paper work and that's what they bid
me for that month delivery.

And storage costs for beans at the elevator 15
cents a month in PA? It's about 3 cents a month
here for storage in Iowa.

You or I need to open an Elevator in PA. You can
build storage bins for around $2 a bushel. In PA
I could pay for the elevator in 2 years then reap
the profits they are.

Gary

Bus Driver · Sep 30, 2011

Wait until the EPA kicks in their regulation that dust cannot travel beyond the boundaries of the field. Pick the beans by hand?
What about when they require silt fencing around every field?

NY 986 · Sep 30, 2011

Gary, it's a different world here in the East. Where I am at the elevators have had a long history of instability. There have been quite a few that would forward contract but then you have to weigh the issue of whether you will get paid. There is a long list of operators that failed and left farmers hanging. Yes, they are bonded but more times than not that does not mean full reimburstment. I've heard of guys getting half or less of what they are owed in these situations. I'm am too small and run too tight to the margin a lot of years to take a chance on somebody crapping out and owing me a lot of money.
As a stated here recently a big national outfit has solidified its presence here by buying a rail siding and adding to the capacity there. Maybe in the future I can have confidence in a forward contract.

IaGary · Sep 30, 2011

Here in Iowa we have the Grain Indemnity Fund.

All Iowa licensed elevators are insured under this Fund. If a elevator goes broke the Fund will pay 90% the amount owed to the farmer not covered by the Federal Warehouse insurance. Forward contracts are paid at current prices and not future prices if a elevator fails. So a farmer will be out 10% plus maybe a few cents less than what the future price he had sold for.

This fund was funded by a checkoff of a few tenths of a cent per bushel checkoff from the farmers every time a sale was made back in the 90's untill the account was up to where the state wanted it for reserve. There is no checkoff now because it is fully funded.

If you sell or store at a USDA Warehouse and have a warehouse storage receipt you are covered in any state.

I would never deal with a elevator that is not licensed by USDA Warehouse or a State Licensed.

In Iowa the elevators have to be licensed by the state to do business but not the USDA I believe.

Other states may have the same type of fund or licensing system.

Gary

NY 986 · Sep 30, 2011

The only requirement here is that they be bonded. Theoretically that should cover farmers to at least 80 percent but the fund the bonds are paid from is finite. Some instability is due to dairy or livestock operators hitting hard times. If you have a bad year or two in the dairy industry that will put a lot of farmers behind on their feed bills which impacts the elevators. The fund is insufficient for an event of that magnitude. Then there are the elevators that like to gamble and do not immediately hedge a contract they write.
Again, what I am talking about is here in NY and don't know specifically what the fellow from PA is facing. I would imagine he may have been in an area served by Agway years ago and nobody has come in to replace them. Going into the Southern Tier here and Northern PA there are lots of areas under served because the businesses that have went out have not been replaced.

massey333 · Sep 30, 2011

Gary,we may have a play on words here.I don't know of any elevator that offers storage for a later date.DP(lose ownership) which has a dump charge with storage till Dec.1 or Jan.1 and then 1/2 cent per day(.15c per Month) charge afterwards.But with DP you can't preprice the future market.Only way to future sell is to keep the grain yourself and haul in at that time.You(We) have 3 choices at harvest,sell,DP,store at home.

IaGary · Sep 30, 2011

I can take beans to the elevator today sell them for March price, and pay storage at the rate of 3 or 4 cents (Not sure on the exact rate) per month till March. The elevators around here rent out storage.

So if today's price is $10.00 and March is $10.50 I would net $10.30 cents. Sometimes the carry in the market will not pay the storage, so you are better off selling on the today's price.

Our options here are sell, sell with deferred payment, put into storage under warehouse receipt, or sell for a future date and pay storage till that date.

Gary

massey333 · Sep 30, 2011

Thank you Gary,but you are speaking of us 40-50 yrs.ago.They may have one-three million cap.but are loading rail cars 24-7 unless they can't get cars.If you don't have your own bins,then it's sell now or DP which is ????as far as the indemity fund because you no longer have title to the grain.ADM and Cargill pretty well bought everything up and then closed them down or sold with a non compete clause,so some are now farmer owned for their own use.

northvale · Sep 30, 2011

It is seriously time to starve these people.

Started beans

flying belgian

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John_PA

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IaGary

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Bus Driver

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NY 986

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IaGary

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NY 986

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massey333

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IaGary

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massey333

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northvale

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