The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-01-08


WHEAT BUYING PROBLEM
The first problem of the big mill
is, of course, in the purchase OF
wheat. Millers estimate that in sea-
son and out an average of about
five bushels of wheat is required to
make a barrel Of -four. The capac ty
of the Grand Forks mill is 2,OOO
barrels day of hard wheat flour
and 900 of macaroni flour, total
of 5000 barrels day. If the mill
IS worked 300 days year, eleminat-
ing Sundays, it would grind 4,50O,-
900 bushels of wheat.
The big commercial mills buy
heavily on the wheat market in the
fall for two reasons-to get the
wheat before it gets out Of the coun-
try at the best possible price, and
to get the wheat they want.
To finance the purchase of the
wheat would require big sum of
money. 1t is pointed out that it
would not be necessary for the
state to invest $4,5OOOOO in wheat in
September and October, because if
the wheat is put in bonded ware
houses the state can borrow from
70 to 80 percent on it to pay for it.
But here another problem arises.
The capacity of the elevator at
Grand Forks is placed at about g.
100000 bushels. The original fig
ure was 1,659,O00 bushels. 1t would,
therefore, require two filings of the
elevator to provide enough wheat for
the mills yearly grind. There are
at present no other U. S. Bonded
Warehouses in the state on which
money could be borrowed SO we'll,
and much of the wheat would have
to be bought outright and" allowed
to rema n in country elevators or
other terminals, in the opinion of
many.
Must Carry Flour,
The problem of financing the pur-
chase az wheat is held by off rials
to be not as great as that of carry
ing on operations of the mill until
the flour is manufactured, sold and
the money for it received. OF neces-
sity, if not choice, state officials have
generally agreed the mill should be
operated on cash bas S as nearly
as possible.
But at best large sums would be
required. One of the best trades,
from the miller's standpoint, is the
English trade. The miller sells his
wheat, insures 1T and receives in
payment on the bill of lading, Eng
l'sh exchange based on 60 days time.
The exchange fluctuates, but it is
more nearly cash trade than most
transactions in the milling business,
according to commercial mlllers.
In establishing agencies the state
will have to sell much flour on con-
gnment. An interval of time will
elapse between the manufacture of
the -four and the sale, If there is
no ultimate loss. It was the con-
slgnment sales that resulted in much
of the Drake mills loss. The state.
on cash basis, must compete with
we'll financed mills which grant a
varying period of time for payment
OF the -four.
Not only is there the purchase of
flour and the sale for which work.
ing capital must be provided, but,
there is the mill payroll to be met.
The number of employees varies in
mills of varying construction, and
does not increase in proportion to
production, but vt is generally held
that from 100 to $50 employees would
be required at Grand Forks if the
mill were run at full capacity.
Would Need $l.60O,O0O
An example of the working capt.
tai required in the milling business
is seen in one small mall of 300 bar
rel capacity in this state. The mill
has $4,000 surplus aid in addition
usually $4,000 to $4,000 borrowed
and it's capital. The mill ,geperally
I is using about $16O,0OO toI keep its
BUSINESS going. On this basis, the
Grand Forks mill, ten times as large,
would require $1,6OO,O0O working
capital.
There are few officials who have
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