June 2011 Newsletter

By Karl Kupers on July 07, 2011

As we approach the Day of Independence for the United States I am reminded of the independence Shepherd’s Grain has in pricing our farmer’s wheat crop. For many outside of agriculture the idea of not being able to match up your cost of production to your marketable price is very foreign. The fact is wheat producers in this region and many throughout the world are tied to the commodity market primarily for export trade.

Our Shepherd’s Grain producers have been involved in that commodity trading market for their entire farming careers. In fact when we set the pricing program of Shepherd’s Grain to be a true and transparent cost of production model it has even taken many of our producer’s time to become comfortable with the concept. In truth, the commodity market is and must be the pricing program when dealing with international trade. The differing currency values, the differing political scenarios, and different trade programs need a program like the commodity market. Shepherd’s Grain beginning gave us a chance to change the way we marketed our wheat and we took that opportunity to become independent of that commodity market approach. The concept was simple, to be sustainable you must at least cover your cost of production and the commodity market did not give us any assurance that would happen. This idea was also supported by the thought you cannot “do the same thing and expect different results”. Sustainability is a complex thought that many have difficulty in wrapping their arms around. Once you embrace the thought the execution is much simpler than you imagined. This was in part the basis of this break from the normal pricing to an independent transparent cost of production model. As I am sure during the turmoil surrounding our country’s Independence, our Nations citizens must have had questions if this endeavor would work. It is the same with some surrounding Fred and I in our early days of development. In fact, we even had those thoughts. The SG pricing of cost of production is such a radical departure from our historical way of pricing that questions are still out there. We have “tested” this theory for over 9 years now and it appears it may be one of the primary reasons customers switch to Shepherd’s Grain and certainly a solid reason to “sustain” that relationship. No matter the concerns or pressures, we are committed to retaining our independence from the tyranny of “taking what we can get and be happy” thought. Our pricing program ensures an economically sustainable return for the farmer and a stable cost to the buyer. You will note that this newsletter is dated as a June/July newsletter. Summer is a time for vacations and family outings so to reduce the flow of information you receive I will resist another newsletter until August. Our producers are gearing up for their harvests and looking forward to a great return on all the hard work they have put in over the development period of this crop. The difficulties with the cold and wet spring will hopefully now result in a great crop. As always we thank you for your support of Shepherd’s Grain and our family of producers. Have a great and safe 4th of July week-end and a great summer.