February 6, 2023
American Edge Grain is not a household name in farm country — not yet. But Terry Wastweet, founder and CEO, is using strategies that have worked in other industries to help producers get a better price for high-quality corn while enabling end users to get a better product with more value at the same time.
So, what is AEG? It’s the first data-driven, virtual grain-attribute exchange, connecting farmers who have grain with premium attributes to the end users who need them. Attributes are qualities such as protein percentage, energy content and mineral values.
“Not all corn is the same,” says Chris Thompson, a partner and executive vice president of AEG. “There is a lot of variation in quality for these various attributes. At the same time, there are certain end users, like large dairies in the Western U.S. or ethanol producers, who achieve better performance if they start with higher-quality grain.”
Wastweet adds, “No. 2 yellow corn is a commodity. It must have a minimum test weight of 54 pounds and is allowed a certain amount of damage. Elevators trade No. 2 yellow corn as a commodity, and that is what they deliver to customers.
“What we’re doing is identifying where large quantities of corn with better attributes than No. 2 yellow corn exists, and then matching it with end users who are willing to pay for a better product.”
How grain exchange works
Today, AEG has access to about 25 million bushels of grain, with hopes to expand its market reach.
“Right now, we concentrate on corn grown west of the Mississippi River,” Thompson says. “Most of our grain comes from the Dakotas, Iowa and part of Nebraska. A good share of it becomes feed for dairies in California and other Western states.”
This is an identity-preserved market. But if you’re a producer, you don’t have to segregate for traits. Instead, you handle grain like you would normally. The only difference, Thompson explains, is that AEG arranges to install a small device on the intake for corn to your bin. All corn that enters the bin is assessed for key attributes the company can use to find markets for your grain. All the data from participating growers is aggregated so AEG knows where bins of corn with specific attributes are located around the country.
End users select corn with attributes they want, Thompson says. Then it’s a matter of arranging trucking and facilitating delivery, he adds.
Premium to the producer depends upon the value of the attribute to the end user. “Sometimes it’s around a quarter per bushel, but that is an arbitrary number,” Thompson says. “It can be more or less, depending upon exact quality of the corn and its value to the end user.
“We certify producers and end users, and match them up.”
Learn more about AEG at americanedgegrain.com.
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