The software powering the back office is empowering grain businesses to originate grain more efficiently and for farmers to find better margin.
With any job, part of it is science and part of it is art. Grain origination is no different. But with today’s tight to negative margins, professionals in the space are finding a threefold series of benefits:
- Incremental efficiencies and improved accuracy
- Confirmation of institutional knowledge
- Unveiling of otherwise undiscovered opportunities
The Move from Spreadsheets to Systems
Ali Piper, part of the FS Grain team with 18 elevators across northern Illinois, says 10 years ago, the 10 grain originators on her team were entering purchases on a SharePoint form, entering hedges in a separate platform and having a customer service rep manually enter the contract into their ERP. Added up, it was a manual and tedious process with many revisions as contracts were priced, rolled, split, and more.
“Then, at the end of the day, they’d have to manually mark them that they’d been entered for the end-of-the-day balance process,” she says.
Kaylee Heap, lead of IT for Growmark’s retail grain units, said while the process had already begun in other segments of the retail business—agronomy, energy, etc—grain had a unique set of demands for the technology to bring value to the business. She’s leading her team to to standardize software partners with a unified “Grain Stack” of software solutions across all Growmark Grain groups.
“We vetted a curated list of software vendors, some we were already using, and then ultimately ended up with a product suite to implement across our grain companies,” she says. “It spans commodity management, hedging, offer management, accounting, CRM, the customer app, and more.”
Heap says when working with the individual grain companies on the project it became obvious everyone acknowledged there was room for improvement.
“Our job is to solve some really complex problems in a systematic way that historically, we’ve been relying on spreadsheets for. Working in spreadsheets is limiting because the only person who knew how to use the spreadsheet was the person who made it. And now, we have a more seamless experience to the grain buyer, who is now able to enhance their relationship when interacting with their customers or prospects because of the information available to them,” Heap says.
The Power of Live Data
Contango is an example of one of those partners taking complex, manual processes and improving the business procedures and improving the work of staff. On top of that, it’s discovering otherwise opaque opportunities for the business, which Piper say is the shining star for how the intentional use of technology has elevated their business.
The manual process compounded by the multiple markets they sell grain into is a complex puzzle which in this case was improved with tech.
“We’ve got a couple of terminals, we load trains, we load containers, we sell into the Illinois River market, multiple ethanol markets, and a couple of soybean processors,” Piper says. “Contango scrapes all of those bids, gives us a heat map and a bid calculation of what’s the best bid based on where a farmer is sitting—and it’s all live.”
Piper’s team did an A-B test to compare the old way to doing business with using Contango, a software aiming to fast-track how a team gets insights about cash markets, customers, and prospects. The tech-enabled team secured a two-cent-per-bushel lower buy basis than the control group.
“The grain industry is an industry of so much volume and very slim margins. With all of the nuances, potential time delays, all of those half cents add up,” Piper says.
She says software, like Contango, has helped the team build call lists for the day, know when to send text messages, and discover new customers. Contango uses Farm Journal data to help build out its farmer records along with other data layers.
“There’s no looking back now,” Piper says. The processes have been streamlined, and the outcomes have been improved. There’s no need for a clipboard of 50 bid sheets you thumb through all day long.”
