Arthur B. Sogn

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The general public including the patrons has little knowledge of the internal operations of country elevators. This is due in part to the lack of adequate communication between the operator and his customers or patrons. In consequence the patrons too often fail to understand why a certain price for their grain is offered or why certain charges are made for services rendered. The farmer expects and is entitled to a ready market for his grains. The farmer may elect to sell his grain immediately at the current price, store it with the idea of obtaining a better price later, or borrow on it under the government loan program. If the farmer elects to sell his grain as he delivers it, he is immediately given a price on his quality of grain. The elevator operator has quotations from prospective buyers; and can within reason determine the current price at the terminals by radio reports on market trends that are broadcast at least every hour. The elevator operator in his effort to have a good market must evaluate his paying price many times a day. The purpose of this study is to point out and evaluate the many factors which must be considered by the elevator operator in the establishment of the buying prices of the various lots of the different grains which he purchases from the producers. There are many trade secrets which the operator uses not only to protect the financial stability of his organization but also to enhance the returns to the seller of grain. These will be revealed at least in part because they are basic to a complete analysis of buying and also selling practices. The evaluations of the factors determining the buying price of grain are based on the personal experience of the author as an elevator manager and from his visitations and contacts with other managers of elevators in southeastern South Dakota over a period of 12 years. Specific illustrations of the problems related to the buying of specific lots of grain are taken from the records of the Farmers Cooperative Company of Brookings, South Dakota.

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South Dakota State College


Agricultural Economics