Fall Harvest Time

Posted by on Sep 13, 2017

Harvest time for farmers is the busiest time of the year. Especially in livestock operations as they have the usual day to day cattle tending and milkings, and have to add in the feed prep that will keep the animals thriving through the tough winter months. This makes for a busy time for LaBudde as well. Feedmills and farmers contract their feed needs with LaBudde for the whole year. This locks in their price and tonnage needed to feed the animals from October through September of 2018.

All feed companies should be members of the National Feed and Grain Association. This governing body sets up all the guidelines in which farmers and industry companies trade grains and feeds. These include legal time tables on how soon you must send out agreements in writing and other rules that have been in place for a very long time.

Back to why fall is busy. Like corn and soybean harvest, most feed contracts are written to start in the fall because it coordinates with their corn harvest. A farmer can sell their corn to the food plant that manufactures corn sweetener and in turn purchase back a byproduct to use for feed. Food processors buy their corn October – September shipments, so in turn tend to sell yearlong contracts to coincide.

This makes late summer and early fall busy as we write contracts for the next year that will ship in multiple shipments. Many of our pet food clients also do their yearly planning for fall for the next year. Especially for two of our most popular ingredients, Tomato Pomace and Beet Pulp. Harvest starts in August for both, so we plan out the needs and make certain we have enough raw product to cover all their needs. Labudde works with their end customers to make sure the plants run smoothly and shipments arrive on time.

Planning for the year is a benefit for many producers. Price security in a fluctuating market is the biggest advantage. Some years we are able to grab the lowest price, however even if we don’t hit the magic sweet spot that gets the lowest price, having a stable price is often an advantage as well. Think of it as knowing your groceries will cost $100 each week. Your milk will always be $1.99 and bread will always cost $2.50. This makes your budgeting a lot more simple!!

This idea is similar on a farm. Feed and labor are the two highest costs on a livestock operation. Utilizing the board of trade, farmers can use trading tools to lock in their price for products in some markets. So it makes planning and managing the operation slightly less stressful if you can try and lock in some items that can vary in price into fixed cost items. We offer this tool to our customers. Some still may choose to buy week by week and play with the market.

So as you send your kids back to school and start seeing more and more tractors and combines on the roads, we too are starting our year anew. We help forward plan and consult with our customers to help them be profitable into next summer.

 

HAPPY HARVEST!!

 

 

 

 

 

 

 

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