1. What Our Clients are Looking For
• Commodity costs are a significant cost of goods sold
• Supplement internal commodity expertise
• Develop and implement a strategic business strategy to manage cost
• Track, report, and forecast key commodity costs
In short:
Become their trusted source for agricultural commodity and energy
information and management processes
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www.BeesonInc.com Beeson & Associates, Inc. (502) 241-8460
2. What We Heard
• Commodity cost surprises have impacted results multiple times
• An active search for commodity risk management help is underway
• Exposure to: flour, soybean oil, palm oil, and sugar
• Evaluating the need to establish a margin account
• Would like support during the 2013 planning process
In short:
The issue is on the “radar screen” and solutions are being evaluated
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3. Customized Commodity Solutions
We strive to institute a complete solution Who We Have Helped
What is risk to the organization?
• Volume at risk is the mismatch of forward sales and commodity
ownership
• Price risk is the volatility of the market
• Risk = Volume X Price risks
What capability is there to manage risk?
• People, processes, and financial tools
What is our market opinion?
• Research and outlook
What are the benefits?
• Execute and track results
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www.BeesonInc.com Beeson & Associates, Inc. (502) 241-8460
4. Our Team
Blend of experience and education delivers results
Matt Beeson Alex Norton
• Founder 1995 • Director: Risk Management
• Key commodity purchasing roles • Economics: Wake Forest
– Pillsbury, Brach Candies, KFC (PepsiCo) • MBA U Mass in progress
• M.S. in Ag Econ University of Illinois • Joined Beeson & Associates, Inc. in 2008
James Stewart Philip Beeson
• Energy leader • Director: Commodity Services
• Key energy management roles • Finance at Johnson & Johnson
– Summit Energy, GE Appliances, Integrys Energy
• Finance: Miami of Ohio
• MBA University of Louisville
• Joined Beeson & Associates, Inc. 2011
• Joined Beeson & Associates, Inc. 2011
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www.BeesonInc.com Beeson & Associates, Inc. (502) 241-8460
5. The Process
We end with market outlook What we hear?
2-day launch “This process changed the way
we think about and manage
• Learn your business needs the markets.”
• Get underlying volume information “We no longer start with a
• Mutually set objectives of the program panicked feeling about
market direction, but put
together a business strategy
Ongoing support based on market conditions.”
• Weekly market outlook “The positions we do take are
understood, quantified, and
• Monthly strategy webinar tracked.”
• Execution of strategies (if desired) “We have not had an
unmanageable commodity
surprise in the 4 years we
Track the results
have been using this model.”
• Provide results tracking
• Utilize proprietary web-based reporting Bundle(if desired)
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12. Implementation of Margin Account
Is it really necessary? Our Experience
Accounting treatment Few of our clients manage their
own margin account
• Mark-to-market
• Hedge accounting
• Vendors will embed option
strategies
Cash impact
• Accounting and cash impacts
• Margin can be significant are insurmountable
• Most of the risk management
Training programs do not require it
• Understanding and use of options
However, it cannot be debated…
Flexibility of having an account
has advantages!
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