COMARK GRAIN MARKETING

November News

As I write this on Nov. 3, over half the fall crops are still in the field. Approximately 9 million bu. have been harvested so far in the CGM group of elevators.  Dryland corn is the only crop that is substantially harvested.  A very frustrating fall for producers who want to harvest at high moisture levels, and coop managers who must limit that moisture in order not to have a disaster on their hands with spoiled grain in the bin.  The good news is that the best grain dryer there is has finally arrived.  Sunshine, a good breeze and low humidity. 

This unusual fall weather has brought much discussion about the need for grain dryers.  Only ten years ago it would have been hard to imagine that today our crop mix in south central ks. would be 40% corn, beans, milo, cotton, sunflowers and canola.  That crop mix brings a lot of challenges to the country elevators that were designed to handle one crop---dry wheat. 

Each cooperative must look ahead, evaluating their needs in the coming years.  Dryers are expensive but can be a good investment if the need to use them is there nearly every year. On the other hand, if they will be used only 1 out of every 10 or 20 years, that would probably not be a good use of the money you have invested in your cooperative. When this crop is in the bin and some of the emotion has passed, many coop managers and boards will be evaluating facilities to more effectively handle this increase in crop diversity.

Three months ago “available space” was a huge concern.  Space is still an issue, but the weather delays have allowed time for more grain to be moved to market and storage. On Sept. 18, Danville Coop opened their 3.3 million bu. elevator at Wellington and it was added to the CGM grain license. Today there is 1.4 million bu. of grain in the facility and more will be added as harvest progresses. Long term, this will allow us to carry more grain in locally owned elevators and attract additional members that may be storage    deficit.

Another calendar year is nearly behind us. We have one coop member that ends their fiscal year in Oct. and one in Nov., both are expecting solid results.  CGM has paid out to the members $12.5 million in cash for storage, handling and profit so far this calendar year, and we are expecting a favorable audit at year-end. We have a very good staff of people in place at all levels that make this cooperative marketing model successful. It is truly a cooperative effort from the field to the market. 

CGM and Comark Inc. have outgrown the facility we are currently in. In September we broke ground on a facility that will provide us with room for growth and also provide the Farmers Coop Elevator with administrative offices.  The building sits on main street at the south end of Cheney.  Completion is scheduled for late January.

Every year has it’s challenges and 2009 was no exception.  But, rain makes grain and we have been blessed with plenty of it.  Thanks to everyone for your business this year, please remember your local coop employees with a kind word this fall, they are the backbone of your businesses.

David Smith  

Seed Program for 2010 Cropping Year

Yes it is time again to be looking at your seed inputs for the coming year.  We are carrying quality Dyna-Gro seed as well as Cropland Genetics for all of your planning needs.

Best time of the year for pricing your seed input needs is now. On the reverse of this sheet are our ‘Early Pay’ and Volume Discounts.  Best pricing is before November 15, 2009.

Also this year I would like to let you all know that we have a retail Seed and Agronomy Fieldperson.  Kirk Kennedy has accepted the position as of November 1, 2009. Kirk has been a valued employee of Valley Coop for many years as the Atlanta branch manager.  He brings years of seed and agronomy experience to the table for your benefit. He will be in the field promoting primarily seed, but also will be able to help with your fertilizer and chemical needs as well. Please welcome Kirk to this new position within Valley Coop when you see him. He can be reached at 620-394-2290 ( Atlanta office ) or 620-229-0312 cell number.

Cooperatively,

Richard Kimbrel

General Manager

Valley Coop, Inc.

620-221-4343

08-04-2009

Valley Coop Board Approves Equity Redemption Payment for 2009

At the regular Board of Directors meeting held on July 30, 2009 the Valley Coop, Inc Board approved another equity payment. This payment will redeem deferred patronage from the years 1986 thru 1989. The payment will continue on the Board of Directors plans to have our revolving fund equities to a 15 year revolvement by the year 2011. This payment will put just over $159,000 back into members hands by the end of September 2009. The Board of Directors is pleased with the progress the company has made since the inception of the plan to get members equity back to them in a timely manner.  

It takes the support of the membership, which allows for adequate profits to allow for the upkeep of facilities and equipment, and allows for redemption of equities. The members should be proud of the strides made in the past few years in all areas of the cooperatives growth and profitability. We appreciate your support.

Richard Kimbrel
General Manager         

03-04-2009                            Developing a Marketing Strategy 

 Marketing Plan – PROFIT NOT PRICE

 Do you do a yearly marketing plan for your crops?  If not, you should consider doing one.  A good marketing plan will help you 1) set profitable goals 2) Achieve those goals, and 3) have a backup plan if your goals are not reached.  A good marketing plan is the first step to marketing success.

To begin with, it is important to think about the marketing periods that you are looking at.  If you still have bushels in Open Storage you are worried about the Post Harvest Marketing Period.  If it is a growing crop, you are concerned with the Pre Harvest Marketing Period.  Both have unique challenges associated with them, so they need to be looked at differently. 

In Post Harvest, costs associated with storing grain and interest costs are adding up, while there is no guarantee of better prices.  However, you have all the information you need to make marketing decisions.  You know how much money you have in the crop and you know what your yield is.  See Below.  Cost of Production divided by yield = breakeven price.  Cost of production plus desired profit divided by yield = Pricing Goal.  This method allows you to define a “good price” because let’s face it in today’s markets that is hard to define.

In the Pre-Harvest period, there are some unknowns, but there is no costs associated with storing the grain.  You don’t know exactly what your costs/A are and you don’t know what your yield will end up being.  In this time frame there are also chances to see attractive pricing opportunities due to any number of market conditions.  That being said, the same calculations from above apply.  You need to know your expected cost of production and use a yield that you feel is attainable whatever that is.  For an example, your 5 year average production.  Again, this allows you to define a “good” price.

Now, you know what your starting pricing goals are, and assuming you understand the risks associated with forward contracting as well as your risk tolerance, it is time to put your plan to ACTION.  Call the Coop and enter some target orders.  Know what contracts are offered and use them to your advantage.  Understand how to limit your risks.  Don’t forget about a Plan B.  If your goals are not achieved, make a decision on what to do then.  Take your marketing by the horns and have fun making money.

                   Advice from Ryan McCoy  CGM, LLC  Marketing Manager