102 



JAMES VALLEY FARMERS ELEVATOR 



CONDE, FERNEY. STRATFORD. GROTON. SD 

 MAIN OFFICE - BOX 1 95 - GROTON. SD 57445 

 (605) 397-2347 



The following is a e::ample of a grain inarlet and grain cocnpanies tal inq 

 advantage of the curretit marketing conditions, which are impossible to say 

 the least. Before vomitoKin levels were rela;:ed, big grain companies had 

 some of the best opportunities in history to use a natural disaster for 

 their own profits. On September 10, 1993, James Valley Farmers Elevator of 

 Broton South Dakota put samples of a loaded twenty-3i:( car unit train of 

 spring wheat on the spot floor of the Minneapolis Brain Exchange. That day 

 the spot market was quoted at between '4i4.81 and J.S'.21 per bushel for #1 

 spring wheat. Ihe Broton train graded at a HI average. The train 

 consisted of twenty-two cars of 1992 wheat, and four cars of 1993 wheat. 

 The opening bid for the Broton train was *4.51 per bushel. Broton rejected 

 the opening bid^and bargained back and forth until finally accepting a bid 

 of $4.96 for the train with the stipulation that the bid was contingent 

 upon good vomitoitin results for the train. The commission company doing 

 the selling of the train for Broton did five car composites for the 

 vomito;:in results. These results came back negative. The purchaser of the 

 Broton train was a large grain company, who upon seeing the vomitotin 

 results demanded that the tests be rerun- on a individual car basis. As it 

 was 3:30 on a Friday afternoon that was impossible, so the purchasing grain 

 company refused to take the train. Broton was then informed that the train 

 did not trade, and would have to resell the train on Monday. Broton was 

 then forced to start paying the railroad demurrage charges for failure to 

 bill out their train. By Monday when Broton tried to resell the train the 

 markets had dropped *.15 per bushel. Also, Broton ran individual vomito:;in 

 tests on the cars in the train. The tests were run by the same company and 

 on the same samples as the five car composites from the pi'evious Friday. 

 Before the tests results were done, Brotons commission company offered to 

 buy their train at a $.40 discount to the Friday bid no matter what the 

 vomitoKin results were. When the individual results came back, the average 

 vomito:;in on the train was 3.2 parts per million. These same samples 

 averaged less than two pai-ts per million on the previous Friday when done 

 as five car composites. Grotons commission company then offered to buy 

 their train at a *.70 discount, trying to take advantage of the high 

 vomitoHin results. Broton refused to sell the train and had it reprobed 

 and regraded. The same unit train still graded ttl taut had a average 

 vomitoMin of 1.3 parts per million. #1 spring wheat was quoted on the 

 Minneapolis Brain Exchange at between *4.73 and 1i4 . 93 per bushel on 

 September 15, the day Broton resold the train. The first bid on Brototis 

 train was $4.35 per bushel, yet the market indicated a lot liigher level 

 than that. Broton refused that bid and future bids until they finally sold 

 the train for *4.67. In the course of trying to sell this one train Broton 

 spent $3,120.00 in demurrage charqes to the railroad, and received $.29 per 

 bushel, or $25,520.00 les;; for the train then it originally sold for. If 

 Broton would not have ?'eprobed the train and accepted the bid based on the 

 high individual vomitoHin results, they would have received $.50 per 

 bushf-'l, or $44,000.00 less than wliat the train was fitially sold for. 



