Today's Farmer

[Steve]

Ton4CWB

My reply to your statement, if we outright refuse to supply, substitution will often not give us another chance.

I believe if you have a good product don’t be afraid to ask the right price for it. We can even use Safeway store as an example they don’t change their price for every customer that comes into the store because they have good products to sell. They know good customers will be back for quality and service that Safeway provides. We can apply this system to our domestic sales but need to modify it for export.

Tom! you really don’t sell any different because when you pre-price on the futures or buy options you are also setting a price and that means your not going to sell below production cost.

If you create a shortage or a surplus the market price will fluctuate at the same rate beyond your control, therefore you better be prepared to watch the market daily. That is why we should try and control production. Most farmers don’t want to add more stress by sitting at the marketing table every day.

I trusted people to market my grain. That gave me time to get frustrated on the golf course because my golf ball is as predictable as grain prices.

Your next statement; that I should be able to sell my wheat not using the CWB services or elevator handling systems, therefore you are also implying too use producer cars.

You better slow down on this one, because if every farmer used the same sales approach what would happen to your good partners that you always refer too.

[ianben]

Steve
I dont believe we can control production
only Mother Nature can do that for us.
This is who is in control today; your CWB, Toms futures, my subsidies, all trying to tame her and failing miserablly.
We could learn from Safeway though.
Fix a fair price.( middle of historic high /lows)
Put it on the shelf(list it on the internet)
Keep the shelves full(hold stock)
Monitor competitors prices and services and use these to fix price.(do not try to be the lowest priced producer every time.)
Keep customers happy(Stable prices do make for happy customers I am sure.)

We cant control production but we must be able to market better!!!

Regards Ian

[TOM4CWB]

Steve,

I was not talking about using ANY Canadian grain handling, marketing or grading services.

I simply need to load my truck and take it to the buyer, if that be a processing plant or a US buyer that has nothing to do with the Canadian system.

Because my grain will even be graded with a US grade and not be able to claim the Canadian quality advantage, I believe this would be fair, infact in the 1950's the CWB allowed this type of transaction without the buy-back!!

We used to have an old saying in my marketing courses and seminars, If we don't sell some grain, then the price can't go higher later in the marketing year. Substitution is the reason why this is true, particularily in today's world of oilseeds!

For the people that have been working on marketing choice, change at the CWB seems to be like watching a glacier melt!!!

Thankyou for your kind words Steve, the thing that hurts me the most is to see a number of farmers in their 40's that would be still farming, if the CWB changes could bring changes particularily on the Cash Flow side.

When the bank pulls the plug and gives 10 days to sell everything, the CWB system is difficult to deal with!

[Steve]

Hi Ian

Thanks for your good comments and hope you had a better than average year.

I retired coming on two years but deferred most of my canola sales to January of 2002, so I think Revenue Canada will class me as a farmer for one more year. My golfing came to a halt with the weather so I decided to join you farmers on the net. I hope my comments don’t offend anyone because I enjoy reading everybody’s views and like to add my two cents.

I hope this cold weather will get more people back on the net.

Regards Steve.

[Steve]

The cold weather has driven me to the house. This computer is quite the little rig isn't it. I have read all your comments and find them very interesting. But I find all your marketing views are antiquated 19th and 20th century ways to market commotidies. Ianben has the most forward thinking ideas on how to better market our grains. I know all of you believe that the commotities market is the only way to set a price. I believe their are better and simipler ways of pricing that are possibly more stable and more profitable for farms. Lets remove the speculator from our commotity market and replace it with a buyer takes delivery and a seller makes delivery on a sale. This would be a true supply and demand market. Now I don't want to hear all about how us farmers can farm these speculators and all the other so called good points about the exsisting market(which is manipulative}. Lets hear some clear thinking on how to change our commotities market to the benefit of farmers instead of favouring buyers of our product. Spectulators done give a damn where the price is, just that it is going up and then down. Everyone lets try to dream up a better way to market. Thats why this computer was invented someone or a lot of someones figured it out to better our lot in life. Heres to better thinking The Kernel.

[TOM4CWB]

Kernel,

You must have taken your growly speculator shot before you wrote the last spot!!

Is not someone who lays their money down, and creates an opportunity for everyone, a person to be respected and encouraged?

If any of us knew the future... but the fact is that none of us do!!!

No one has a gun to your head and forces you to sell when the prices fluctuate lower than your expected levels kernel, so what thorn got under your saddle kernel?

[ianben]

Thank-you kernel, love the name!!
Toms been on this marketing course and he really believes he can beat the system.
Perhaps with dedication and effort he can but it is not providing the service today it was invented for.
Stable prices and reliable supply.
I see a better way, using this fantastic medium the internet.
I hope you see it too!
Not sure how we get there from where we are today.
Still too many horsemen out there saying that new fangle tractor will never catch on.
I'm sure Tom has a tractor bet he even zero-tills and grows GM canola.
There is no better way to market though!!
Once he's free of the CWB of course.
More individuals in the market, higher highs, lower lows.
Just what we need!!!

Regards Ian

[Steve]

To all

I will not specify what comments are directed to individuals but here they come.

I don’t believe that our grain marketing is outdated and we are seeing many changes because of globalization. These were some suggestions: we should be able to load our truck and deliver directly to the processor and I agree but only to the domestic market.

I think that most of us realize that the USA and Canada free trade agreement is quite fragile because of the population difference. Just stop and think if you antagonize the big giant, they can turnaround and flood our grain market to the extent that you would give wheat away, just to make room for your new crop. You better believe it just look what they did to our softwood market.

The commodity marketing exchange is a good place for seller and buyer to meet for many reasons. In this place you advertise, sell, buy, pay and collect money.

Now lets look at some do it alone systems. How are you going to collect your money from some foreign country on grain sales and or rectify a dispute at the border crossing? I know there are brokers, but that is not always free of problems and besides at any time the border guard can tie up your load for days.

We need large grain companies and or the CWB to handle all export transactions because they pay the farmer at the delivery point and that relieves him from any export liabilities.

The large corporations trade on the commodity exchange or sell direct to buyers. So lets stop and realize that we need this middleman and it will cost us elevation also transportation charges.

[TOM4CWB]

Steve,

Take a look at the special crops, beans used to be the PNW specialty, now the prairies dwarf the PNW production. Peas and Lentils the same.

I don't see the US stoping trade here, the same as Canola, no border controls either.

What about Oats at $3.50/bu, no CWB, many small companies, marketing choice and no US border action on Oats!!!

The CWB has done a really good job of fooling you folks!

If someone can come up with a fair way to regulate supply, without billions of dollars in supply management quotas, and a system that can anticipate shortages like the futures can and do now, let me know.

How many people are you folks willing to starve to get a "fair" price for your produce?

I know that is a hard question, but it is one that needs to be asked.

Now I don't say I ever beat the market, and I do use co-operative pooling systems outside the CWB, as well as the CWB, so please spare me...

Isn't in the end, the freedom to choose the way you and your farm sell the products, at the base of a free, fair, and democratic society?

How does this stop you folks from joining together in a marketing alliance like sunkist oranges or Oceanspray cranberries are marketed!!!

[TOM4CWB]

Lets put all products on the commotities market then Tom. Everything that is sold as the result of production or manufacturing. All the items in Safeway and Canadian Tire should ride the wave of speculators. I then could maybe pick a better time to buy a cheaper can of beans or a spark plug. Farming is good. Marketing is the pits. Now skrub your minds clean of the way we have marketed in the past and invent a new way. Tom they really brain washed you at those commotity marketing courses that you took. Think boys think. The Kernel. PS Tom have you sold all your canola yet.

[pandiana]

I like the bread example. It helps to put the complex economics of marketing from primary production to retailing in a package small enough to swallow (pun intended).
I agree with Steve's description of the pressures that exist on the middleman, from unions, to utilities, to urban expansion. However, as I see it, the problem is that, as the costs to the middleman expand, they exert pressure on the entire line of production. This pressure can be relieved in either of two directions; upwards, to increase the retail cost or, downwards, to erode the profit of primary production. The primary producer has no way of ameliorating his rise in costs but must absorb them. Primary producers that have been able to 'add value' to their production by working up the production chain have been better able to offset some of these rising costs.
I realize that this is an oversimplification of a complex problem but I feel that a close look at a few 'trees' might help us analyse the 'forest'.

[Steve]

Pandiana

Thanks for your very good, also diplomatic comments and views.

This confirms my way of thinking that you don’t need a nasty pill before one starts his views or comments, only politician do that on their campaign trail.

I also don’t like to see at CWB or farm chemical information meetings disrupted by some person in the back out of control and calling the speakers liars, crooks and what ever implying their the cause of all his problems.

Regards Steve.

[ianben]

Sorry if you think I 've been getting too personal.
I admire Tom's ability to use markets to his best advantage also people who manage to add value sucessfully.
I fear however they are very much in the minority but good luck to them.
If we take Steves point and look what our customers want right down the chain.

I think we will find they want stable prices and supply on demand.

I don't think our"markets" today provide this.
"Markets" only exist for commodities which fluctuate in either or both of these things.
What opportunities are we missing by not providing the above.
How much easier is it to budget, plan investments if you are confident on price and supply?
Our buyers must constantly watch the market and try to manage their risk.
We supply a constant worry and additional costs.
If the present systems worked I would shut up tomorrow.
Does the cheap grain get to the hungry people?
Do low prices reduce supply or is it just the weather?
Are people investing in factories which use our products?
When they do.
Do we treat them as we should?

There has to be a better way!!

Regards Ian

[Steve]

This is the way I see it.

The statement about more individuals getting into the marketplace will make higher highs and lower lows I believe stands true.

We can relate this to housing in our country, when the big boys helped the buyer and seller with the transaction and charged a fee, the market was stable because the builder built this house for the person that called it home.
Now with homeowners being speculators the market is in chaos and the price doesn’t even come close to the real value.

These are some of the reasons that farmers go bankrupt or have cash flow problems:

1.Ratio, land to equipment too low.
2.Also expanding too fast with new diesel pickups and John Deere 9650 combines, where older equipment could be used.
3.Management, priorities are not in the right order.
4.Insufficient funds to start farming, too much borrowed money for land, equipment and operating.
5.Adding partners with no money but more mouths to feed.
6.CWB problems, 1 % [ if you get a cash advance on stored grain you are committed to pay it back.]
7.Low grain prices.
8.The list could go on but I think I made my point.

I still need an answer for, who should be in charge and allocate the railway cars to the users????????? I know some people were saying earlier on that the way it is now was no good.

[Steve]

Allocating railway cars? Ummmm lets let the railway allocate the cars after all it was the taxpayers and the farmers who bought and paid for the cars. It is called a subsidy to the railroad. When the Government gave subsidizes to farmers to buy tractors and combines they didn't set up a gov. agency to allocate the use of such things by the farmers. It allow each business to decide the useage of them. Just maybe the railroad could manage to turn a rail car around in less than 21 days if they didn't require permmission from CWB. Just my 2 pennies worth. The Kernel.