Comment Text:
Kokomo Grain, a family owned business started in 1950 with a 12,000 bushel grain elevator,has evolved into a regional grain facility with several locations and over 42 million bushels of grain storage. A Bona Fide Hedging program has enabled the growth over the years and allowed us to manage price risk that goes hand in hand in a commodity business. Commodity prices change daily do to the weather, world economics, war, terror, and other factors that are complementary or a substitute for certain commodities. As a result, boa fide hedging must be available to lock in prices that return a profit to business. In a commodity business, there are not always times when prices can be locked up that a profitable. Having a bona fide hedging program provides the flexibility to lock in a profit when it makes sense. Bona fide hedging also translates profitability to the family farm. Not many producers will open hedge accounts on their own. They rely on their local grain elevator to have the expertise and finances to lock in grain prices any time of the day and out as far as two to three years into the future. Most of the grain that is sold to grain elevators is priced for delivery some time in the future. The limiting of a bona fide hedging program would have a detrimental effect on the financial viability of the family farm.
Sincerely,
Thomas J Madru
Grain Manager
Kokomo Grain Company
