Profitability is key to the success of organic agriculture. That said, it is marketing that often determines profitability.

Grain Millers, Inc. operates grain mills in Oregon and Iowa where they process specialty grains for sale to value-added organic food producers across the US and abroad. Agri Trading Corporation, a wholly-owned subsidiary of Grain Millers, supplies the mills with high-quality grains, while providing assistance to small farmers in selling their other organic grains and by-products to feed industries such as cattle, dairy, and poultry. Between the parent and subsidiary companies, they provide small organic farmers with a crucial lifeline of stable revenue in an industry and marketplace that can be ruthlessly volatile.

Kay Heine

Kay Heine, merchandiser for Agri Trading, says "the organic food movement is no fad. Grain Millers and Agri Trading have been involved in the organic industry for 15 years and have watched it grow 7-10% each of those years. Our company is committed to helping the industry grow while maintaining the quality and integrity the new markets demand."

Kay grew up on a farm, and so she is committed to helping small farmers succeed. "I personally believe that you should treat your vendors as if they were your customers. On an individual basis, we try really hard to find a market for the farmer's product wherever we can. I strive to create relationships that will last over time."

In business, solid relationships are founded on trust and clear communications. "Having expectations clear from the beginning is crucial, on both sides of the relationship. I want to let farmers know what they can do to create a smoother process and prevent hang-ups down the road. The more information they can give, the easier it is. It saves time, both theirs and ours."

Grain Millers provides Kay with product specifications, the parameters a product must fall within to meet the needs of the market, and she passes that information on to the farmer. In turn, the farmer should take his or her product to a grain elevator and perform the standard testing for protein content, moisture, damage, and foreign material. "This information is very important to know, but it doesn't tell us everything we need for specialty products," Kay explains. "If they give me that information, I can tell them right off whether they should send a sample to the mill. The reason to send a sample is to protect both sides. The mill has to perform its own specialized testing, to learn whether the product will work for the end product."

For example, with oats, they need to examine groat yield; with wheat, they test for flour product potential. The method a farmer uses to sample his or her product can make or break a deal. A sample may be approved, but delivered truckloads rejected. "To prevent frustration and financial losses, it is important that the farmer send a true representative sample of what is in the bin. One part of a crop field can be totally different, due to soil, moisture aspect, or what have you. There is a way during harvest to take samples throughout the process, to give you that true representative sample. Find out how to go about this from your grain inspector."

"Expectations vary. A farmer may say 'my grain is good' and that’s enough. They may be right, but if the product doesn't meet the specifications of our customer, it may get rejected anyway. Many of our customers make specialty products with very unique requirements. Some products have tighter specifications than others, but most provide at least some leeway, in some cases with a discount schedule. Some companies will pay premiums for a superior product."

"If a load of grain is rejected, we make every effort to find some other buyer who can use it as organic. One of the hardest situations is when a product is infested – there's no way we can use it as organic because we cannot fumigate. In that case our options are very limited. Basically we can return the product to the farmer, or go with conventional fumigation and send it to a conventional buyer. In either case the farmer pays the processing and shipping costs."

Agri Trading provides crucial marketing support to farmers, merchandising over 2 billion bushels of organic grain per year. On a daily basis, they work directly with livestock farmers, sourcing grains for organic dairy producers and feedlots as a way to help growers move the grains they are unable to place into specialty niches. In addition, Kay says, they are seeking new opportunities wherever they may be found. "One of our major goals is to support the organic industry and expand the market. We are always looking for new markets for organic grains, making cold calls to companies to find out what they use grains for. We track opportunities in the media, on the Internet, and follow every lead. If we grow the organic business on the demand side, we can keep it as even as possible with supply, which helps the farmer with pricing."

"Our big message to farmers is: If you are considering going organic, yes, go ahead. There is a market for your product."

Kay Heine
Agri Trading Corporation
17138 NE 84th
Redmond, WA 98052
Tel: (425) 702-7173

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