Grain Buying 101

3 necessary skills

You will get a rundown of 3 necessary skills of grain buying in this article.

By Cullen Wilson 12-10-19

I sniff a market for grain origination content. This is my test.

Grain origination (buying) is 3 dimensional: customer service, merchandising and sales. This reasoning is deduced from my own personal experience and reflection. (There is actually a 4th dimension, trust, but one cant acquire that like a skill. Trust is earned).

Customer service involves receiving customer inquiries on contracts, bids, hours, settlements, delivery sheets and the like. In a baseball analogy, customer service is fielding the ball.

The bid buys 80% of grain. The bid structure is the merchants realm. Originators are an extension of the the merchant’s merchandising activities. Merchandising activities included buying basis, selling basis and futures spreads. The originator is mostly tasked with the buy-side of the merchandising equation. Originators need to know freight calculations and the position of the merchant. I talk to the merchant I work for several times a day to exchange information. In baseball, the merchant would be the manager in the dugout.

Sales can be a dirty word. Nobody wants to be sold. What I consider sales skills is presentation skills and audacity (boldness). It takes sales skills to make an outbound call to a prospect. It takes sales skills to ask for a firm target offer. It takes sales skills to introduce yourself to a customer when he walks in the office. Sales skills are needed when proposing a marketing plan to the farm. It takes a little audacity to present at a marketing meeting or write a newsletter. The pitcher in baseball is the origination sales person, to finish out the baseball analogy.

Before one claims all this sales talk is deceptive and stealing bushels from farmers (a common claim), I took a poll on twitter recently on the value exchange between farmers and their buyers.



Farms can choose to swing at pitches or walk. A good originator is pitching to equip farmers to hit grain marketing singles, doubles and triples. Good originators inquire about needs and offer solutions.

Most originators I observe have good customer service and merchandising skills. But grain companies can hire customer service reps and merchandisers for those tasks. Putting yourself in front of people differentiates your origination program. It’s not easy and there are risks. That’s why I’m not worried about the competition reading this newsletter. (Plus grain businesses are geographically constrained. I only have so many threats).

I estimate 60% of my small readership is grain industry and origination folks. Why? Perhaps, everybody is looking for an edge?

Ideas (newsletters) don’t originate bushels. Bid structure, physical location, trust and service does. A farm I know can sell grain to 20 different grain handlers. How does one grain buyer differentiate from the other 19? Lots of ways I suppose, but my aim is to keep sharpening my customer service, merchandising and sales skills.

-cw

Give me feedback because you want more origination content at cullenjwilson@yahoo.com. Of course origination content won’t be free.

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Cullen Wilson is a grain originator in Yankton, SD.  The opinions stated in this newsletter are his and not that of his employer or affiliates. You may contact him at cullenjwilson@yahoo.com . Follow him on twitter @cullenjwilson

Disclaimer

This newsletter expresses the views of the author as of the date indicated and such views are subject to change without notice. The author has no duty or obligation to update the information contained herein. The newsletter is being made available for educational purposes only and should not be used for any other purpose.
Copyright © 2019 Cullen J. Wilson. All Rights Reserved. Information provided is general in nature and is provided without guarantee as to results. The information is not intended to be, and should not be construed as, trading, financial, insurance, legal, or tax advice. The author, its subsidiaries, and affiliates disclaim any liability arising out of your use of, or reliance on, the information.
Your situation is fact dependent and you should seek appropriate advice.

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