In 1538, the Duke of Norfolk wrote a letter to Thomas Cromwell, the chief minister to King Henry VIII. A plague had rampaged the regions taxed by the Duke, and he found himself lacking funds which he had previously considered certain. As the Duke reviewed which assets he would need to sell and consequently remove from his will, he wrote to Cromwell “a man can not have his cake and eat his cake.” The meaning is simple: Once assets are sold (or consumed, as is the case with cake), they can no longer be held.
In the world of agriculture, there is always a need to mitigate risk. Contracts cap the risk associated with price fluctuation, but in doing so, cap the potential for profits as well. Among commodities actively traded on futures markets, buyers locked into contracts still have a way of knowing how much was gained or lost as a result of the contract. But what happens when the current price of a product is not readily available?
This is often the case among industrial companies purchasing feedstocks. By signing an annual contract, buyers reduce their risk in exchange for the promise of continuous supply (assuming no force majeure). But they lose perspective on what is happening in the market. Instead, they rely on their supplier for information on current market conditions. Since we launched Glowlit, we’ve heard from many companies that would like to stay abreast of current market conditions despite continuing to buy via contract. Some are looking to increase their negotiating power upon renewal, while others seek to understand how to balance their risk (ie what amounts to purchase via spot versus contract).
For these companies, we suggest Glowlit Pro+. Glowlit Pro+ looks a lot like Glowlit Pro, but has one key difference. Pro+ allows companies to connect their ERP directly to the Glowlit system, bypassing the required manual data entry once per week. Pro+ was designed for buyers who purchase the vast majority of their product via contract but still want access to weekly data on ingredient prices. In other words, Glowlit Pro+ is for buyers who want to have their cake and eat it too. And since there is no difference in price between Pro and Pro+, they can.
Founder and CEO of Glowlit