After a few months, I was fortunate to get back to FS Grain and complete the job shadowing opportunity I was provided through the Grain & Feed Association of Illinois. As we know, the grain markets are much different this spring than last fall. That meant I got to see a shift in business operations. This spring, I spent both days at the FS Grain Main Office in Morris, IL. These two days were a deep dive into the operations of FS Grain. These specific conversations were able to tie things together and give me more confidence as I head into a grain merchandising internship with FS Grain this summer.
On the first day, I started off by speaking with Mark Trainor, the Safety & Regulation Manager. While I was aware of the risks that accompany the grain industry, I was able to learn how FS Grain not only meets industry regulations but exceeds them. This ambitious mindset has led Mark to implement safety procedures based on behavior. This allows the employees to take a proactive approach by understanding their behavior to prevent many unsafe situations from even occurring in the first place. I then met with CSR Manager Lisa Scribner and Sales Settlement Manager Molly Fanning. Their presentation and discussion were thorough. I learned about FS Grain’s processes that occur from when the grain leaves the field to when it is no longer in possession by FS Grain. This “behind-the-scenes” aspect of the business is extremely important, and it was able to tie together things I learned during the fall job shadow days. As the child of a FS Grain customer, I am now extremely appreciative of the accurate and efficient work Lisa and Molly do each day. After lunch, I wrapped up the day with Collin Graves, Controller at FS Grain. He was able to explain his role in evaluating and planning within the cooperative. Our discussion made me aware of how he interacts with a variety of people, such as the General Manager, board, and employees. I had a great first day and became more aware of integral business operations.
When I came back a couple days later, I started with Dale Vigna, who works with the trucking side of FS Grain. Based on the amount of phone calls and messages he received during the time talking with him, I was shown the busyness of his position. The many truck drivers and destinations definitely requires organization and effective communication, both of which Dale showed he is an expert in. I then had the opportunity to go back to the merchandising desk and meet with Justin Burke. He was able to explain the merchandising process based on each market, which includes truck, container, and rail. This breakdown was helpful in understanding how FS Grain operates in a variety of markets. After I came back from lunch, I spoke with Logistics Specialist Jeff Anderson, who showed me the details of the container markets. I was amazed by how variable the container market can be. While it can be a successful market, the drayage companies and railyards determine much of their ability to take part in that market. Overall, I learned more in the GFAI Job Shadow experience than I ever imagined. Thanks to the welcoming and kind people at FS Grain, I was able to further learn about the grain industry. I am grateful that this experience has prepared me well for my summer internship at FS Grain.
My name is Jacy Castlebury and I am currently a junior at Western Illinois University, studying Agriculture with a minor in Economics. I am also a recipient of the 2020 GFAI Scholarship. One of the things that this scholarship has given me was pairing with a GFAI member facility to spend some time job shadowing at, and I was assigned to Western Grain Marketing. Last semester, I spent two days with Scott Sims at the Adair location and learned about the rail markets.
Last week, I spent two days with Ryan in Rushville for the second half of the job shadow program. During one of my days spent at WGM in Rushville, Ryan allowed me to listen in on WGM’s merchandiser/originator meeting, which was very interesting. One thing that I caught onto during this meeting was their concern with the supply of grain. I learned that it is nearly impossible to tell how much grain supply there is, even just locally. However, it is important for merchandisers to have a good idea of supply because it will directly affect the elevator’s position.
Ryan taught me that there are five main categories of risk management as a grain merchandiser. These categories are futures risk, basis risk, spread risk, quality risk, and counter party risk. The futures market holds the largest amount of risk, because the futures markets are always changing. Basis is not quite as risky as those will determine local bids, so most contracts will be hedged on the futures market, leaving the basis open. Spread risk is the risk associated with the changes of prices from month to month. Grain is perishable, so there is risk as the quality decreases. County party risk was the last category of risk that we discussed. He told me that for every sale, there is a buyer and a seller, and there will always be a risk that the counter party for some reason cannot follow through with their agreement.
Overall, I had a great two days job shadowing at WGM in Rushville. Ryan was a great host and I am so appreciative that he took time out of his workdays to teach me some of the basics of grain merchandising. Thank you to Ryan and his team at WGM as well as the GFAI for providing me with this wonderful experience!
As I finish up my last semester at Murray State University, I was also able to finish up my shadows with Tosh Farms in Tennessee. My spring visits provided a slightly different experience from the fall ones, yet both provided me with invaluable experience. The Elevator Operations Manager whom I shadowed last semester, accepted a new position so I shadowed with his replacement. Mr. Wayne Casey is now serving in this role and is bring a fresh perspective to both the grain side as well as the whole company. In the past, Mr. Casey worked in Manufacturing as well as served our country in the Army, so doesn’t have an agriculture background – but is not letting that stop him. He walked me through how some aspects of his job are more difficult because of that, mainly due to our language that we use when describing items, or the acronyms, things like that. Hearing that opened my eyes, and my ears, to understanding how we could better make an impact on others if we broke some of that down. We talked about how the busy seasons change for him depending on the time of the year and how his new perspective was both good and bad for the customer base meaning the consumers and those he does merchandising with. Overall, it was very insightful and I am glad that Mr. Casey is taking on this challenge and I think he will be a great asset to the agriculture industry.
For the second part of my spring visit, I spoke to the HR Department of Tosh Farms. This was fitting for me as I will be working as an HR Generalist upon Graduation in May. Tosh Farm’s business structure is different than the company I will be working for, but the values held in farming and this industry we love were the same. Tosh Farms works a lot with H2A workers, which I found intriguing and was really able to learn from them in this area of how workers are really needed for this industry and how they work to fill that role. While there, I was able to learn about their efforts in including veterans and giving back to the organizations that serve their community. You could really see the family values within their company and how that impacted employee performance, and overall company performance as a result of that.
My spring visits at Tosh Farms weren’t what I expected, but I think they were what I needed: a fresh perspective on an industry I at times, “get used” to, and another application of the career path I am going in to within another faucet of the agriculture industry. I am very thankful for Tosh Farms as well as the Grain and Feed Association of Illinois for providing me with these experiences. It truly is an honor to be a GFAI Scholar!
Post #2: Collaboration between animal health and feed industries
One of my favorite aspects of serving as a National FFA Officer this year is the time my teammates and I get to spend in meetings with agriculture industry leaders, most often as part of our virtual corporate sponsor visits. These visits give me a chance to take knowledge I've gained about the industry, whether through personal experience on my family's farm, my FFA Supervised Agricultural Experience where I raised and sold purebred dairy cattle, or college experiences such as the GFAI Industry Immersion Tour, and understand how it applies in the broader context of the industry and the influential players in it.
One such visit, with leadership from Merck Animal Health, was heavily focused on systems thinking and how different sectors of the agriculture industry interact with one another. Some of Merck Animal Health's recent acquisitions--from customizable animal monitoring technology to environmental impact measurement tools--are indicative of the increasing collaboration and interconnectedness of the animal agriculture industry. One of the members of their leadership team shared how the animal health industry is no longer just focused on treatment, but also on the holistic process of raising and caring for animals. This idea manifests itself in areas like feed additives, but also points to stronger future ties between the feed industry itself and animal health companies like Merck.
These shifts in mindset from influential agricultural players appear to be coming along parallel to shifts in consumer preferences, where buyers are increasingly interested in the environmental and social impacts of their food production processes. For animal health companies like Merck, it's an opportunity to collaborate with companies farther upstream, like those that process animal feed, to develop stronger lines of communication and ultimately provide more transparency and traceability in the supply chain. For many consumers, it's not enough to know where the animal product itself came from, but they also want to know what that animal's diet was, too. This is apparent with value-added products such as grass-fed beef, or vegetarian-fed chicken; it seems likely that forward-thinking feed companies will have an opportunity to reap more benefits while providing value that consumers desire in even more areas. One example is to identity preserve feed ingredients that came from farms with a focus on soil health, carbon sequestration, or biodiversity. Another is to utilize cover crops or more specialty grains that provide ancillary benefits to ecosystem service markets.
Successful innovation requires meaningful relationships and strong networks; this is exactly what groups like GFAI provide for their members, as do organizations like the FFA. As an FFA member and a beneficiary of GFAI's student programs, I'm excited to stay connected and watch as the industry continues to progress, through increased collaboration between feed and animal health companies and beyond.
Post #1: Entrepreneurship in the Grain and Feed Industry
While I have taken a gap year off of college classes in order to serve as a National FFA Officer, this role has taught me lessons far beyond what most classrooms can provide. The three-circle model of agricultural education consists of in-class instruction; leadership through FFA programs; and experiential learning--largely through what we call Supervised Agricultural Experiences--where students have their own project relating to agriculture, food, or natural resource systems. I'm especially partial to any aspect of experiential learning, and that's part of why I found so much value in the GFAI Industry Immersion Scholarship Program. Not only did we get to tour working facilities and learn from people who are out doing the work each day, but also we got to spend time job shadowing in those facilities for an even more in-depth learning experience. This spring, I've found myself in experiential learning scenarios that are more about thought leadership, industry-wide macro trends, and management; the time I spend in meetings with C-suite leadership of international agriculture corporations, however, is made more valuable because of the time I've spent on the ground with experts in the field, like those I met during the fall semester as part of the Immersion Tour and job shadowing days.
One of the most fascinating meetings I've had so far in my role as an FFA officer was with a leader in Syngenta's global biological products division. We talked about his focus in the area of new innovations through biological crop inputs that serve as one more tool in a farmer's toolbox, but we also covered some of the current trends in the agriculture industry as a whole. One of the most interesting, to me, was the increasing importance of the entrepreneurial spirit.
Much of the innovation that is occurring in agriculture is now coming at the hands of small start-up companies rather than the large, often multi-national, well-known companies in agriculture. Those larger companies, however, aren't missing out on the action; many have investment portfolios of their own, where they invest dollars into potential future acquisitions and are simply able to learn more about these emerging technologies. It also seems that hardly a week goes by without reading another email newsletter about a start-up acquisition in the agriculture industry. This trend has significant implications for both well-established players in the grain and feed industry as well as young people like myself who are seeking to find our place in it.
From how I see it, there are two distinct ways to play a role in grain and feed industry innovation: we can either be the kind of person who begins or works for a start-up, or we can be the kind of person who works for the larger company that will ultimately purchase and scale up the innovation created by the start-up. Either role requires somewhat of an ability to think independently and creatively; this is the type of thinking fostered by experiential learning that both the FFA and the GFAI student programs provide.
This semester I spent two days shadowing at Advance Trading Inc. in Bloomington, IL. ATI assists grain sellers and buyers in managing their risk through hedges in the futures market. My first day at ATI this year fell on the day the monthly USDA report came out. In the brokerage world, this is an important report because trading prices can be heavily affected by its predictions, although the impact of the report is greater in some months compared to others. When the report came out I was sitting with Nathan Mangold and watched as prices fluctuated wildly. This was a great insight into how the markets can change on a whim and how important it is to react correctly as a commodity trader when these reports come out. My second day came this past week and I spent most of my time with Curt Strubhar, a broker who mainly serves commodity buyers such as elevators and ethanol plants. The first hour was spent listening in on calls to clients from various regions of the country to discuss recent market activity and potential trading strategies going forward. Most farmers are busy planting here in central Illinois so this is a good time for brokers to formulate strategies before the crops are above the ground. Over the next hour, I met with two brokers who specialize in helping farmers manage their risk when selling grain. Key decisions in a farmer’s risk management strategy include whether to sell or store grain at harvest and which option stances to take in the futures market. To finish up my day, I again met with Curt and joined him on a video call with a couple other ATI employees and new investment company in St. Louis. The main topic of discussion was the soybean meal and soybean oil markets and how prices are determined for the different regions of the market. These markets are largely impacted by a value called crush, which is the difference in value of soybeans and its byproducts. The ratio of contracts to maximum daily crush can lead to a discount or a premium on shipments of these two commodities if the ratio is outside of the established range. It was a privilege for me to sit in on this call because it is a unique service offered by ATI, as they were helping a firm that doesn’t specialize in agriculture to become more familiar with the industry so that they can become more involved in it.
Grain and Feed Scholarship
Hello again, my name is Kyler Masching, and I am a Junior at the University of Illinois studying Agriculture and Consumer Economics with a concentration in Agribusiness- Markets and Management. I also am completing a minor is Crop and Soil Management. I was able to be paired with Consolidated Grain and Barge at the Dwight, Illinois location for my job shadow. I really enjoyed being able to job shadow here, as I was able to learn about the company as well as the basics of grain trading. The merchandisers, Sam and Kevin were able to explain to me the different pricing options that customers have when selling or delivering grain to CGB. These pricing programs are great for farmers that are attempting to sell their grain ahead of harvest and for farmers who think the market might have some upside potential but want to reduce their downside risk.
One of the days I conducted my job shadow during the Spring of 2021 was on Wednesday, March 31. This was a very exciting day to observe the markets because the Prospective Planting Intentions Report was scheduled to be released from the United States Department of Agriculture (USDA). In the morning, we discussed how large of an impact the Prospective Planting Intentions Report could have toward commodity prices as the number of projected acres being planted directly relates to the supply side of commodity grain prices. We discussed the acreage projections of other firms in the market and how these projections would compare to the USDA acreage projection numbers. Then at 11am, the Prospective Planting Intentions Report was released, and the market began to react to the Acreage Projections. The commodity futures market quickly jumped up toward its maximum price move in one trading session, which is called the limit price. At that time, the limit price for corn was $0.25 and the limit price for soybeans was $0.70. Both corn and soybean increased prices to their limit that day, moving corn upward $0.25 per bushel and increasing soybean prices by $0.70 per bushel.
On my next job shadow day, I met with Larry Ketcherside who is the facility manager at the Dwight Consolidated Grain and Barge location. He explained to me what his daily roles and responsibilities included and that his roles can change based upon the day. He showed me the various Excel spreadsheets he uses to help organize and track grain while it is at the facility. He also explained the aspect of his job which includes planning for the future and ways to help make the facility more efficient. Another important role I was able to observe and help with was the probing of grain trucks as they would enter the Consolidated Grain and Barge facility. Probing is an important action the elevator takes in order to know the moisture content and the quality of the grain is it receiving. After the trucks are dumped the grain is monitored inside of the grain bins by cables that track the moisture and temperature of the grain. By tracking the moisture and the temperature of the grain, the operators at the elevator can ensure the grain is keeping its proper condition for when the time comes that the corn and soybeans will leave the facility.
I would again like to thank the Grain and Feed Association of Illinois for this scholarship opportunity and to Consolidated Grain and Barge for a great job shadow experience. I was able to learn many interesting components about the grain industry through the Industry Immersion Tour and through the job shadow experiences.
Grain & Feed Association of Illinois
3521 Hollis Dr.