Wisconsin ethanol plant buys grain online

By | August 27, 2007
Castle Rock Renewable Fuels LLC, a plant under construction in Necedah, Wis., is buying grain online through the Dynamic Pricing Platform (DPP) developed by Farms Technology LLC in Overland Park, Kan. The online marketing system has five ethanol plants among the 52 buyers using DPP, according to Farms Technology CEO Jason Tatge. Buyers base their bids on the Chicago Board of Trade (CBOT), minus the basis—the spread between the local cash price and CBOT. As the market fluctuates, the DPP matches the buyer's chosen basis with the farmer's target cash price and triggers a sale. Tatge described DPP as a productivity tool analogous to using a telephone rather than face-to-face meetings.