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Corn+Soybean Digest

Grain Producers Can Calculate Transportation Costs Online

Once the crop is out of the field, the next decision farmers face is where to sell their grain. Should they sell to the local elevator or a more distant market with a premium price? Now producers have a tool to make that decision.

The Soy Transportation Coalition (STC) has an online calculator available to assist producers in making the most profitable decision when delivering their soybeans or other commodities. The calculator can be accessed from the Indiana Soybean Alliance’s (ISA) web site at http://www.indianasoybean.com by clicking on the calculator icon at the top of the homepage.

“Farmers have to take into account not only the price they are receiving for their commodity, but also the cost associated with getting that commodity to the market,” says Emily Otto-Tice, ISA grain marketing director. “Once all those factors are considered, selling at the highest price is not always the most profitable option.”

In a few quick steps, the STC calculator can assist in measuring not only how much money will be received, but also how much will be spent.

“The idea for the calculator came after visiting with a soybean and corn producer who mentioned how many farmers do not fully incorporate transportation costs when deciding where to deliver their soybeans or other commodities,” says Mike Steenhoek, STC executive director.

The online calculator takes into consideration a number of factors that remain constant no matter where the crop is sold, including the total capacity of the semi or other means or transportation, fuel cost per mile and maintenance cost per mile. It also factors in cost of labor or value to time, because time is money whether someone is hired to deliver the crop or if the farmer delivers it.

Then, the calculator accounts for the differences between the two market locations, including mileage for the round trip, round trip time including wait time and the spot price at the two locations.

The calculator will then determine the farmer’s most profitable option, calculating the profit per full load for each market destination and the additional dollars one market may offer over the other.

The STC was established by the Indiana Soybean Alliance and six other state soybean organizations, the American Soybean Association, United Soybean Board, National Grain and Feed Association and National Oilseed Processors Association. The primary goal of the STC is to position the soybean industry to benefit from a transportation system that delivers cost effective, reliable, and competitive service. The calculator can also be accessed at STC’s web site, http://www.soytransportation.org/.

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