Key Cooperative FOB Program

Key Cooperative implemented a Freight on Board (FOB) program this summer which provides producers with a competitive, custom bid for grain picked up at the farm-gate by Key Cooperative, and delivered to the most competitive end-user within the local market.  This new program has seen a lot of success and we want to build on it by further expanding our competitive portfolio of marketing options.  Starting in December, Key will be bidding the same bid as the processor on all full-month bids for grain shipped direct off the farm through Key Cooperative.

Traditionally, we’ve taken protection on direct bids to the tune of one or more cents on corn and three or more on soybeans.  We’ve been partially offsetting this protection by passing on DPAD “Domestic Production Activities Deduction” to members selling grain through Key Cooperative.  Now, we will be bidding the same full-month bid as well as continuing to pass on DPAD to Key’s member growers, therefore, making it all the more attractive to market grain through Key Cooperative.

It’s important to note there will be some conditions. First, any grain delivered through Key Cooperative that is not sold to Key prior to delivery, and therefore spotted, will have a one cent per bushel deduction applied.  Also, a one cent per bushel deduction on corn and two cents on soybeans will be applied to any “quick ship” grain sold through Key.  Lastly, bids are subject to change at any time and we maintain the right to take protection at any time given certain market conditions.

We want to ensure that we have the right grain bid structure in place to serve all our growers and all their grain.  We see the importance of having both a competitive FOB and Direct Ship program to help members capture more from their grain stored on-farm.

Please don’t hesitate to contact a member of Key’s grain team to put together a marketing plan to fit your needs or answer any questions.

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