Insights (Sponsored by StoneX) - 3

ketplace, consumers may balk about paying high
prices for their favorite boxes of cereal.
Better management of procurement and pricing
can alleviate issues that have implications across
the organization and, beyond that, to suppliers
and customers.
Just-in-Time Inventory
On the raw material side, a processor can better
control - or at least better manage - their inventory
with differing approaches.
For example, by working with an agribusiness
service provider like FCStone Merchant Services
(FMS), a processor can pay for inventory only
when it needs to be used. This just-in-time inventory
model more efficiently uses liquidity and capital
that can in turn then be used elsewhere within
the business.
Similarly in typical grain origination programs,
grain is bought from producers through spot cash
contracts and forward cash contracts that use a
variety of pricing options. Futures, options and
OTC markets are used to minimize risk and offset
exposure to volatile markets.While this system can
Customer testimonial
" FCStone Merchants Services has been working with us for almost two years with their inventory repurchase
program. The program frees up cash by minimizing corn inventory ownership and by eliminating daily
margin call requirements. While corn has increased in value by $4.00 per bushel in a short period of time,
margin calls on farmer contract corn have not tied up any of our working capital. It has also allowed us to be
more aggressive purchasing corn further into the future and it simplified our internal accounting. FCStone
Merchant Services also offers our farmer clients services like direct deposit and a wide array of structured
pricing contracts that we were not able to offer on our own. There is no doubt that because of FCStone
Merchants Services we are a stronger and more competitive company today as a result of their programs
and services! "
FCStone Merchant Services'
Protection by the numbers
In the last two years...
* FMS farmer settlement teams have
worked to process more than $400
million of grains settlements for clients.
* FMS enhanced origination programs
have onboarded 1,316 farmers, executed
more than 12,500 contracts and
processed 67,370 scale tickets.
work, there are shortfalls, including the need for
enough working capital for the marketing year and
a required understanding of commodity markets
and hedging strategies.
By leveraging experts in origination, risk management,
hedging and payments and using the
latest system and technology platforms offered
by a service provider, a producer/processor can
- The CEO and Commodity Manager of an Ethanol Plant in the Midwest.

Insights (Sponsored by StoneX)

Table of Contents for the Digital Edition of Insights (Sponsored by StoneX)

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