Fast Forward

• Mike’s 4-year-old grandson may someday be a farmer, merchandiser or an elevator manager. He and others his age or older are growing up with a digital device in one hand and a computer available nearly 24/7. He’ll be your customer or your employee and the challenge will be to use those talents and preferences to your advantage.
• Country elevator managers talk endlessly about the challenges of finding and keeping good employees for routine tasks. Wireless networking allows even smaller ag businesses to instantly manage a stream of computer data from the scales, bins, dryers and pits to the main office. This can make “outside jobs” more attractive to the younger generation and can allow managers to operate with a leaner staff of more qualified workers.
• Consider computer skills as you interview and hire staff. You’ll need someone to manage and develop network systems and to fully incorporate future technology to gather and distribute information to/from your customers.
• Increasingly complex reporting is available now through temperature cables, CO2 monitors, and a host of other modern operational equipment. Incorporate these innovations into your expansion and rehab plans. The cost may seem unnecessary but you’ll also buy efficiency and the ability to better manage these ever-larger volumes of high-priced inventories. (Who wants to first find a bin of $15 soybeans going out of condition when you’re loading them into a train?)
• Electronic order management of your futures/options hedging will become more common at the country elevator. It’s not necessary (or even desirable) to enter orders yourself, but you want to be able to instantly see your net hedges, daily activity in real time and other important management information to monitor your business risk exposure.
• Search out ways to reduce fuel consumption to trim costs. Computers and GPS can aid in setting up feed delivery routes.
• Robots may perform routine functions as their unit cost declines. Robots that bag feed are already in use.

While you’re planning, think outside the box as well. Most country elevators receive and unload grain about the same as they did 50 years ago. Sure, they have automatic probes and electronic scales, and the information can feed to the accounting system instantly. But think beyond that.

We live in an automated age. Bank ATMs are everywhere and make it all but unnecessary to set foot in a bank except to secure your line of credit. Many groceries (at least in the cities) have self-checkout lanes where customers swipe their items and pay one central cashier or pay by credit/debit cards at the scanner. Fast food is available with a swipe of a card.

Grain elevators aren’t really that different from banks. Both handle a generic commodity that comes in various quantities or denominations, and is “routed” in a few basic ways, to a checking account or to savings, for example. People insert a bank card and deposit paper money and checks directly into the machine without even a deposit slip. (At least one major bank is moving into accepting check “deposits” via a scan by iPhone.)

Think about streamlining a country elevator along those lines — at least in part. Customers could drive up to a “grain bank” (a little elevator humor), insert a card or a pin number, and begin the unload process. The machine would ask a few questions (commodity, etc.,), offer a few alternatives (sell, store, contract, “other”), and instruct the driver where to go. At that point an automatic probe (perhaps a robot?) could sample the grain, test it and send the information to the management office, or even to a “traffic signal” that could direct the driver to a specific pit. As unloading begins, after a verification of an ID code, an automated system could route the grain to the correct bin and log other data. The outcome of the transaction could be sent instantly to the customer — wherever he is — as well as to the office. This would alert the farm customer to grade problems, or potential mistakes on disposition, information that’s valuable to farmers as well as to elevators.

In an ideal world the entire process could be handled with fewer mistakes, in less time, and by fewer employees, all of which will be essential to handling bigger volumes at low cost. In the real world there are problems to address. Drivers don’t always know more than to deliver the grain for Farmer Jones for example. But keep in mind that tomorrow’s farmers will be far more computer savvy; they have their own wireless communication ability — perhaps the farmer could handle the “issues” remotely to the elevator’s system upon receiving an inquiry or alert. The possibilities are endless.

U.S. grain production will continue to grow, and tight global supply/demand balances point to continued high-prices and volatility in the years ahead. These will be good times for elevators but the costs and risks will rise. Elevators have to plan now in order to prosper in that environment, not just through higher credit lines, but through good management and innovation.

The mission isn’t to turn country elevators into banks; it’s to embrace technology to your advantage, to enhance efficiency, to reduce costs and errors, and to make your business attractive and relevant to customers who were weaned on technology. Such changes won’t happen overnight, but the time to start is now. What ideas do you have for your business’ future?