Fixed price contract really sucking today

[btjadenlepp]

My problem with the FlexPro this year was
you had to commit tonnes to it before said
tonnes were harvested. Given the quality
wreck, even with it being above the FPC
and pool, I think we were right to avoid
it. The domestic market is and will
continue to pay more for feed wheat than
the Board in 2010/11.

www.farmlinksolutions.ca

[Braveheart]

Jay-Mo, I feel your frustration. We made our committment to the FPC on Jan 26. I know it's not what we could have gotten just south of us in Rolla, ND, in fact way short, but I've hauled to Rolla and it is like running a gauntlet. The natives weren't all that friendly. Yet they're happy to haul their canola to TLA as i'm sure you've noticed.

We took the FPC that day because I can't count on the CWB PRO to become the actual CWB final. When we considered that and opportunity cost on the money we had to go. Besides, there was good profit to be made and we couldn't leave it at risk.

The FPC was not originally conceived to be as complicated as it is. But the combination of the mindset of the CWB of "command and control" and their desire to be the great wizard that levels the playing field for all prairie farmers leaves the FPC as the poorest attempt to imitate the open market there could ever be.

If Alan Oberg and his caste (yes caste not cast) really represented farmers as they say, they'd stop being "yes men" for the CWB bureaucracy and the NFU and design something that could be simple and would work. (eg. futures mius basis = street price. Over simplified but not off the mark.)

[Steve_Winkler]

On the feed side of things, anybody doing any further pricing with PPO options even though it is feed?

We did half ours on a 200% epo early in December for a decent net, well above the Pro. Local feed offers have been quiet, and those I have heard or been offered have been less than a FPC price ( even with all the discounts, although haven't figured the FPC stuff since initials rose, not sure if the spread has changed there ) and /or an EPO at the %200 level.

Going to commit the rest of our feed tonnage to a b-series on Monday most likely, have to crunch the numbers again after 2:00pm to see if any type of ppo will work out. Be so much nicer if the wheat had graded!!

[Steve_Winkler]

Doing some numbers with FPC and feed wheat and it has gotten quite ugly. If my math is anywhere near correct, spread from #1 13.5 to feed is $102/tonne or $2.78 bu.

FPC Feed discount $35.26/tonne or $.96 bu.

So FPC $345.68 -102-35.26= $208.42- freight elevation 49=$159.42 net/tonne
or $4.34 bu. YUCK. Oh plus trucking incentive $4.53 bu. Still Yuck.

200% epo 235.05/tonne or $6.40/bu - freight/elevation 49/tonne = 186.05net/tonne or $5.06 bu. trucking =$193.05/tonne or $5.25 bu.

Quite the spread but perhaps I've miscalculated.