THE PROBLEM:

Inventory costs for Agricultural Processors are massive. This cost typically will represent the largest cost component for a Processor. In addition, Processors often only have the opportunity to acquire a years worth of product once a year. As a result, inventory acquisition costs often require a significant portion of the total available capital that a company has available. This massive capital demand may prohibit many Processors ability to participate in the marketplace to the extent they could otherwise. Processors need product to run through their facilities and make sales. Huge inventory costs also detract from other critical needs such as additional marketing or upgraded facilities that likely generate higher returns for the company.