Data supply chain links grain from field to customer
It’s an everyday scene at cooperatives across America: A producer hauls a truckload of grain to the elevator, gets the necessary paperwork for the delivery and then is on his or her way.
What is extraordinary is what happens to that grain once it enters the cooperative system. Characteristics of the load — whether it’s protein level, moisture level or any other variable — are entered into a database that powers digital tools, allowing traders to market the grain more effectively by understanding where it came from, how much grain just like it is available across the system, where it needs to be delivered and what needs to happen to meet customer specifications.
As recently as a few years ago, these steps weren’t interconnected. But now, as this complex journey from farm to customer is increasingly powered by digital tools and data, there’s deep understanding of the supply chain like never before.
Fueling Innovation
More than grain is benefiting from the opportunities that come with data. Production of Cenex® premium diesel is now able to better meet farmers’ cold-weather diesel needs. Timing, volumes and delivery locations used to be a guessing game, but now weather-based modeling and predictive analytics bring clarity to those decisions.
“Using data, we’re planning better on the supply side to maximize production and get winter-ready diesel where it needs to be before cool temperatures demand it,” says Ron Batey, director of refined fuels pricing and economics, CHS.
For example, in October 2020, the technology predicted earlier than normal cold weather using 10-day forecast models. “The team was able to see the real-time effects on winter fuel demand and prepare supply so farmers could continue harvesting despite the cold weather,” says Jason Wittek, director of refined fuels trading and risk.
Elevator Efficiency
A digitally focused supply chain improves co-op efficiency, providing value to producers like Mike Haynie, a third-generation Montana producer of spring wheat, peas, lentils, corn mustard and hay barley.
Haynie markets his crops through CHS Farmers Elevator in Macon, Mont. The facility recently upped its digital profile by installing card readers so truck drivers can swipe ID cards as they enter and camera probes for grain testing. Computer software also helps track grain type and storage availability instantly. Grain delivery wait times dropped from up to one hour to about five minutes.
Speed is vital to Haynie, whose three trucks make the nearly 60-mile trek to Macon during harvest and winter months as they move 300,000 bushels of grain every year. “By the time the traps open, it’s almost time to close them and get off the scale,” he says. “We only have so much time to drop our crops and the quicker the process, the better.”
That efficiency is thanks to a data-driven system, says Casey Nay, grain originator, CHS Farmers Elevator, which will move about 20 million bushels of grain this year. “From the moment customers enter our facility, we’re relying on technology to give them the most efficient experience. By using an integrated system, we can not only unload grain faster, but we know where it is headed in market and can provide a competitive price.”
A Proactive Path
By integrating data with a new approach that follows crops from origination to final delivery, crops like Haynie’s are flowing faster and more efficiently through the supply chain. “Every minute we can get ahead of the market is important to our owners and those who rely on us to supply grain,” says Kevin Hall, vice president of supply chain and continuous improvement for CHS.
One example is how wheat flows from CHS locations in North Dakota and Montana via rail to domestic markets in the eastern U.S. or to the West Coast for global export through TEMCO, LLC, a joint-venture export terminal in Kalama, Wash.
As facilities across the cooperative system receive wheat, specifications like protein level and falling number are entered into a dashboard. This allows Brian Brauch, CHS western wheat senior trader, and others to connect global customers with the type and quality of wheat they want.
“By relying on data and digital tools, we’re able to work proactively,” says Brauch. “As we find out what products our global customers need a few months out, we can use digital tools to understand how we can meet those needs.”
Brauch relies on digital systems to tell him what types and volumes of wheat are in storage, including its quality profile, and what is forecasted to be delivered from producers. “Technology has filled the gaps, allowing us to understand every part of the process. That helps us forecast yields more accurately and proactively find a market for the crop,” he says.
“Because we’re able to work ahead of the market and connect the dots from customer needs back to the point of origination, we can optimize market opportunities to bring the most value back to the producer.”
Digital Revolution
“By digitizing our supply chain, we are streamlining the process and proactively connecting producers to markets,” says Hall.
Across the CHS supply chain, digital tools are everywhere: streaming video of crops being delivered to elevators and terminals, using data to better coordinate shipments of fertilizer, showing stored grain and connected scale systems via dashboards, viewing origination and transportation information in real time, and using drones to clean and inspect terminals.
“Connecting data across the agricultural landscape benefits the whole supply chain,” says Riley Buss, data engineer for CHS. “Our ultimate goal is to understand the whole picture to help producers find the best market opportunities.”
Check out the full C magazine with this article and more.