Grainnet

U.S. Grains Council Hosts Ag Industry Showcase for Russian Grain Buyers

This article is reprinted from the May 15 edition of the U.S. Grain Council's Global Update.

Representatives of Russia’s feed grains industry saw firsthand U.S. agriculture during the Russian Grain Buyers Mission, hosted and organized by the U.S. Grains Council from April 28-May 7.

While in the United States, the delegation visited the Chicago Board of Trade where they heard a presentation, took a tour of the facility and discussed risk management issues with representatives from Archer Daniels Midland Company, a Council member, and FC Stone.

The group also participated in a short course at the International Grains Program (IGP) at Kansas State University.

During the course, they learned about potential risk management tools and strategies that could be used in their grain trading operations.

“Russian traders and end-users are finding themselves in a new and dangerous economic world,” said Jay O’Neil, USGC consultant and senior agricultural economist at IGP.

“With commodity prices as high as they are, the Russians came to the short course anxious to learn about the futures markets and what options and strategies could be employed to manage their input price risk,” he said.

According to O’Neil, a new electronic commodities futures exchange just opened in Moscow and the Russian team was interested in learning how futures exchanges work and how they might utilize their local exchange or the Chicago Board of Trade as a vehicle for hedging.

In addition to risk management issues, distiller’s dried grains with solubles (DDGS) also generated interest among the visiting delegation.

The group visited the LifeLine Foods facility in St. Joseph, MO where they learned that the DDGS protein level of LifeLine Foods’ production process produced 39-45 percent protein levels.

“This could be very significant to a foreign customer who is paying very high freight rates as it would deliver more protein for the freight dollar,” said O’Neil, who accompanied the group on the LifeLine Foods tour.

The Russian team continued its mission in Illinois where they had the chance to see the farming operation of Steve Ruh, Illinois farmer and past president of the Illinois Corn Growers Association.

Ruh’s farm is located in Sugar Grove, IL.

“They (participants) got to witness the actual planting process and even ride on the tractor with Steve,” said Phil Thornton, value enhanced project director for the Illinois Corn Marketing Board, who hosted the team May 7.

“The group was primarily interested in the overall management of the operation, such as input costs,” he said.

While in Illinois, the delegation also visited a grain elevator and Corn Products International, which specializes in corn starch, corn gluten meal, corn oil and other related products.