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How It Started
It is often said that a large
percentage of producers market the majority of their grain in the bottom thirty
percent of the year's price range. Producers often see major advisory services publish
outstanding results each year and wonder why they aren't getting similar results
by reading the same advice. This is why we adopted the idea of having producers
pledge their bushels to be marketed following the advice of top advisors. We saw
several advantages of having ProMark Grain responsible for implementing the advice
instead of the producers. First, many times the producers hesitate or disagree with
the advisor's advice, so no action is taken. Second, producers tend to have a hard
time differentiating between hedging and speculating, and therefore have a difficult
time making wise business decisions without letting emotions take over. Last, because
of economies of scale, many producers have a hard time hedging small percentages
of production (For example: 10% of 10,000 bushels), since the smallest contract
most of us trade is a 5,000-bushel contract. By combining multiple producers’ bushels
together, we can easily hedge very small percentages of production at any given
time.
The concept of ProMark Grain was started in 1999. It started as a partnership called
Central Minnesota Marketing Partnership (CMM). This partnership consisted of ten
producers who each pledged 20% to 30% of their production (approximately 500,000
bushels) to the partnership to be marketed following the advice of outside advisory
services. The producers left the cash, futures, and options marketing to Bruce Yaggie
and Scott Field, who implemented the advice of the advisory services. ProMark Grain
is an all-inclusive (futures, options, and cash) marketing service for producers
of all sizes. ProMark Grain's goal is to market the producers' grain in the top
one-half of the year's price range through the use of the best advisory services
available.
We are currently managing over 10 Million Bushels of producers’ production nation
wide.
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