Commodity investment group adds pricing tool

by Emily Wilson
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North Star Commodity Investment Co., St. Paul, Minnesota, U.S., will begin using the DRCSM pricing tool developed by E-Markets within its professionally managed grain program.

This is the first time the DRC pricing tool will be used to benefit all three parties — the producer, the local elevator and the commodity broker/marketing advisor — in the grain marketing process, said Scott Cavey, president and chief operating officer for E-Markets, based in Ames.

"The commodity broker/marketing advisor develops the marketing strategy on behalf of the producer and uses the DRC pricing tool to pull the trigger," Cavey said. "The elevator benefits by knowing how the grain is priced and when it will be delivered, thus enabling them to better manage their own pricing and shipping."

North Star provides information, analysis and advisory services to farmers and agricultural businesses throughout the nation and works with more than 50 elevators in Minnesota. Its goal is to "help producers avoid indecision and lost opportunities by implementing marketing plans on their behalf that still allow them to deliver locally to people they trust," said Marc Peterson, North Star director of educational services.

John Valentine, general manager of Meadowland Cooperative, Lamberton, Minnesota, said that adding the DRC pricing tool to the grain program benefits both the producer and the cooperative.

"Since North Star is using the DRC pricing tool to establish the cash price, we can now effectively manage the daily pricing results and originate grain earlier while our mutual customer, the producer, is able to capture the most value possible in the market," Valentine said.