NGFA Country Elevator Meeting Chicago IL 111216 The Grain Industry Supply Chain Beginning to End httpsvimeocom192701470 Our Industry in 1 minute 43 seconds Definition Customer ID: 1019004
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2. Presented by:Greg Beck, SVP, CGB Enterprises, Inc.NGFA Country Elevator MeetingChicago, IL 11/12/16The Grain Industry – Supply Chain, Beginning to End
3. https://vimeo.com/192701470Our Industry, in 1 minute 43 seconds
4. DefinitionCustomerMerchandisingOperationsPrice discoveryGrain FlowFinal commentsQ & AAgenda
5. Supply chain management (SCM) is the oversight of materials, information, and finances (system) as they move from farmer to dealer to terminal/processor to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. Supply Chain Management
6. The answer is yes, what’s the question? - Rally’s commercial.Customers are more demanding, or they will be soon.Many leave, without a word that their not happy.Who is the customer really, the farmer or the buyer/end user?BothFarmer pays the elevator via purchase and carry margin and mix and blend revenue.End user creates opportunity for enhanced income potential: quick ship, delayed ship, low or high damage/FM/Moisture scales, etc.End user generally wants consistency whether proc, feed or export.End user always wants communication. What’s coming at them!Customer
7. Operations to Merchandising or Merch to Ops, which is more important?Both! Communication is the answer – MAJOR shortfall in many companies.Must have discipline to communicate well – up and down the chain.
8. Crop quality, Harvest pace, Hours, Facility strengths and weaknesses, space allocations (it will change).What markets will you be shipping to?Arrange and coordinate freight (Trucks, rail, barge).Critical element here.Set bids/hours/discountsHave a plan, with 2-3 contingencies, in writing pre-harvest.Prepare on the front side of harvest.
9. Maintain quality, maximize return to facility (hold or quick ship).Market maximization is enhanced if ops knows exactly what merch is thinking. Reverse is true of Merch understands op capabilities and limitations.Avoid Yellow and Red cards!!! Who establishes price and freight mode?Prepare on the back side of harvest.
10. Domestic prices - just enough to create grain to move – no more. Pricing on export side is completely global.U.S. is not the price driver. U.S. is the residual supplier. Black Sea and SAM near empty every year, down to pipeline supplies.Domestic or Export - Be careful feeling you know where prices will go.Example – Gulf YSB basis falls $.40 in SON 2016.Take what the market will give you.Price: Who sets the price?
11. Price Continuum
12. Barge/rail grades from origin are reviewed and entered in destination logistics deck.Export logistics group evaluates: Grades. Timing. Potential hiccups.Arrives to destination.Rail unloads asap. (demurrage too expensive to hold a train.)Barges held or unloaded depending on vessel lineup, commodity, grade, quality, etcVessel documents reviewed/approved. (dot I’s, cross T’s.) Vessel called to berth. Barges/rail called to facility/dock.Barges/rail/trucks unloaded and graded by FGIS. Held or shipped immediately.Vessel loaded.Vessel sets sail!Export Model – after it leaves the elevator.
13. International Trade Flows
14. % of Total Use by Segment CornSoybeansFeed39%-Processed48%54%Exports14%46%Domestic Grain Flows
15. Origination/logistics group evaluates quantitative needs and timing.Evaluation of competitive bids and offers from sellers.Bids adjusted accordingly based on flow of grain to the facility.Grain at origin graded and shipped.Grain arrives by truck, rail or barge.Rail offloaded first, then barge, then truck, according to demurrage costs and facility layout.Samples taken, graded and weighed. Toxins very important.Grain stored according to quality or moved directly to processing.Main product and by-products are loaded out by truck, rail or barge after calling in (rail, barge) and inspecting the vehicle for cleanliness.Grain/Oilseed/Feed Processing Model
16. Customers are both the farmer/dealer and the end user.Communication is the key for successful facilities.Preparation, with a written plan that has 2 or 3 contingencies, is critical for maximizing profitability.Prices are set based on a continuum of ever changing variables.Prices are more volatile than ever, don’t think you can predict them.Profitability comes from tightly managing the supply chain.Read, stay current, be informed.Wrap up – Grain Supply Chain
17. Questions & Clarifications
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