Case Study

Stafford County Flour Mills & UMB: Managing Volatility

Stafford County Flour Mills & UMB: Managing Volatility

Pages 1 Pages

SCFM: The wheat market is volatile. In a given day, wheat prices can rise or fall as much as 20 to 30 cents, which is a significant change in a short period of time. Our mills process 1.4 million bushels of wheat a year, but we can’t control when it is sold to us. UMB: Due to the volatility of the market, SCFM hedges wheat futures, often requiring a great deal of capital to cover margin calls. SCFM: One year, we were making six-figure m

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