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How Using a Grain Broker Helps You

Broker Advantage

Why should you use a broker? At Quality Grain Marketing we are transparent with our brokerage fees and have been charging a flat $2.50/MT fee since the company’s inception in 2002 – this comes out to roughly $105 per Super B. We are not trying to make extra money off of you not knowing the market price. Our mission is to get the producer the best price for their crops.

 

We won’t always have the best price but it is worth a phone call, text, or email to let us work for your marketing needs. We provide no pressure price updates as requested on all commodities – Feed Grain, Milling Grain, Out of Spec products, Organics, Pulses, Lentils, Chickpeas, Wheat, Barley, Canola, Rye, Oats, Peas and the list goes on. 

 

Misconceptions about Brokers

A question I receive all the time is “why should I use a broker?” or I hear statements like “brokers don’t make sense they just cost me more money.” I am going to take a brief moment and try to clarify some of these stigmas and shine some light on the misconceptions.

 

Why use a broker?

Quality Grain Marketing (QGM) works with you to be your end to end grain and freight brokerage service. We are transparent on our brokerage costs to you(our brokerage fee has not gone up in 20 years) and talk to dozens of buyers to help you find the top price on your grain. Some customers use us purely for price discovery, others don’t have time to make dozens of phone calls to ensure their buyer is giving them a fair deal. Our goal at QGM is to help you find the best price for your grain. 

Brokers cost money, why use them when my local elevator buys my grain for free?

One of the biggest misconceptions that I see and hear is the Line Companies are looking out for the little guy (you the producer). Line companies have massive overhead and need to pay for the infrastructure they have in place. They are not working for free and are certainly not transparent with the profit they are making off your grain. QGM will be up front on all costs and let you know what is actually net in your pocket.

More hands in the cookie jar mean less money for me.

Just because your local feeder or elevator is giving you a price does not mean they are the top of the market. Sometimes they are the best price but don’t bank on it. We’ve seen first hand buyers get complacent on their “regular” customers and start to take advantage of them because they are a sure sale. Sell through us if our price is better, if it is not do not sell through us.

Selling through the line company means my grain will move promptly and on time.

Better read the fine print on your contract with these guys. I’ve seen Malt Barley contracts drag for over 120 days with line companies (to the point of expiration and the grain is released from the contract). I’ve had guys tell me they sold their canola to the local terminal because they expected prompt movement and payment and the grain is still sitting in the bin 45 days later. QGM can’t guarantee that your grain will be moved on time but we will work with you to help get it moved and you paid. 

We can help you time the market.

To be honest anyone telling you they can time the market is either overconfident in their abilities (been lucky the last few times) or completely wrong. We will not make any claims that we can time the market, but rather we will let you know what we are seeing from our birds eye view from talking to Buyers and Sellers day after day. This may sound like boring advice but a strategy that has been proven to work year after year for decades is “Average In.” For instance, you have 40,000 bus of barley sitting in your unsold inventory. If you have the cash flow capability sell ¼ of that (10,000 bus) in the Fall (September-November), sell another ¼ in the Winter (December-February), 3rd ¼ in the Spring (March-May) and the final ¼ in the summer (June-July). 

 

At the end of the day it is more important than ever that growers have sharp pencils and know their cost of production, what is their net price sold (after fees and deductions). Combyne and Quality Grain Marketing are excellent complimentary services that make your job just a little bit easier. Using a Quality Grain’s brokerage service will help you save time and get a firm understanding of what your grain is valued at.

Reed McDonald