GrainContractswithLocalElevators.pdfVIP

Grain Contracts with Local Elevators by Mark B. Major, MSU Teton County Extension Agent. Cash grain markets have changed significantly over the past ten years. A common method for a producer to market grain in years past was to harvest their crop, then deliver at the elevator and take the price offered. This document will discuss two methods to forward-price grain before MontGuide delivering it at the local elevator. MT201001AG New 2/10 WORKING WITH THE LOCAL ELEVATOR In essence, basis is an estimate of storage and manager is the key to successfully marketing your handling costs, transportation costs, profit margins for grain. Producers should make sure that have built sellers, and quality variations from those listed in the rapport with those involved in purchasing their grain. futures contract specifications. However, specific local Like any relationship, this takes time and trust by both supply and demand conditions can also impact basis. parties. Face-to-face meetings are not always necessary, The costs listed are deducted from the futures price to but are important in establishing and maintaining a arrive at a locally offered cash price. good relationship. Most elevator managers are happy to Basis has seasonal patterns that can be used to discuss your local marketing options with you. develop strategies for selling or holding grain. If the Many grain producers find that producer knows the historic seasonal they ar