Emotions Aren’t Helpful in Grain
Marketing Decisions, Nor in Debating
Marketing Choice
It’s long been said that emotions are a
grain marketer’s worst enemy. Greed,
fear and ego more than any other factors
stand in the way of prudent decision-
making when it comes to selling crops.
For example, how often have you decided
not to sell at an attractive price,
because ‘it could go even higher?’ Or
have you perhaps priced some grain right
at the bottom of the range, because ‘it
felt like the price would keep falling
forever!’ Most farmers will also admit
to putting too much stake in what their
neighbours say they sold their crops at,
then waiting for a price as good or
better to come along simply to avoid
feeling like they got beat.
Compared to greed, fear and ego,
indicators such as the margin the farm
can lock in above its costs at current
prices, an inverse in futures or a drop
in export buying, provide much more
logical and reliable reasons to make a
sale. When emotions run high, it becomes
very easy to ignore such basic math and
market signals.
Similarly, we are finding commercial
market realities to be completely absent
from the Canadian Wheat Board’s (CWB)
position regarding the future without a
monopoly. The meetings held across
western Canada last week allowed pro-
monopoly CWB Directors, staff and
producers to vent their emotions, but
unfortunately, most of these emotions
are based on half-truths and
misperceptions about what the CWB
actually does.
The farmers who support the CWB monopoly
are feeling sad, and they are feeling
scared. It’s OK to be sad and scared –
this is a major change. But these
producers seem to have confused what the
CWB monopoly means, with what the
Prairie pools did historically.
Pool elevators provided a co-operative
alternative in marketing grain; they
were launched to empower producers who
felt taken advantage of by the local
privately-owned elevators. The pools
bought all of the crops farmers offered
them, merchandised them to the best of
their abilities, and then returned
dividends to producer-owners.
The CWB provides price pooling, which is
a viable risk management approach that
will continue to be offered after the
monopoly is ended. The CWB markets wheat
and barley to end users, developing a
reputation for good Canadian grain and a
brand, which is similar to the work that
Pulse Canada and the Canola Council do.
Producers must recognize that there are
many stages involved in marketing grain
along the supply chain, and the CWB
operates solely at the end of it. Furthermore, at this final stage, their
efforts only cover 3 of the 15-20 grain,
oilseed, pulse and special crops that
are produced by farms in the designated
area.
If CWB supporters can’t be clear and
realistic about what they’re feeling,
nobody will be able to help them. The
antics at last week’s producer meetings
took them another big step towards
losing their organization entirely. Just
like how emotions can get in the way of
good grain marketing decisions, all of
this drama is only hurting the
industry’s ability to envision a
successful future.
www.farmlinksolutions.ca
Marketing Decisions, Nor in Debating
Marketing Choice
It’s long been said that emotions are a
grain marketer’s worst enemy. Greed,
fear and ego more than any other factors
stand in the way of prudent decision-
making when it comes to selling crops.
For example, how often have you decided
not to sell at an attractive price,
because ‘it could go even higher?’ Or
have you perhaps priced some grain right
at the bottom of the range, because ‘it
felt like the price would keep falling
forever!’ Most farmers will also admit
to putting too much stake in what their
neighbours say they sold their crops at,
then waiting for a price as good or
better to come along simply to avoid
feeling like they got beat.
Compared to greed, fear and ego,
indicators such as the margin the farm
can lock in above its costs at current
prices, an inverse in futures or a drop
in export buying, provide much more
logical and reliable reasons to make a
sale. When emotions run high, it becomes
very easy to ignore such basic math and
market signals.
Similarly, we are finding commercial
market realities to be completely absent
from the Canadian Wheat Board’s (CWB)
position regarding the future without a
monopoly. The meetings held across
western Canada last week allowed pro-
monopoly CWB Directors, staff and
producers to vent their emotions, but
unfortunately, most of these emotions
are based on half-truths and
misperceptions about what the CWB
actually does.
The farmers who support the CWB monopoly
are feeling sad, and they are feeling
scared. It’s OK to be sad and scared –
this is a major change. But these
producers seem to have confused what the
CWB monopoly means, with what the
Prairie pools did historically.
Pool elevators provided a co-operative
alternative in marketing grain; they
were launched to empower producers who
felt taken advantage of by the local
privately-owned elevators. The pools
bought all of the crops farmers offered
them, merchandised them to the best of
their abilities, and then returned
dividends to producer-owners.
The CWB provides price pooling, which is
a viable risk management approach that
will continue to be offered after the
monopoly is ended. The CWB markets wheat
and barley to end users, developing a
reputation for good Canadian grain and a
brand, which is similar to the work that
Pulse Canada and the Canola Council do.
Producers must recognize that there are
many stages involved in marketing grain
along the supply chain, and the CWB
operates solely at the end of it. Furthermore, at this final stage, their
efforts only cover 3 of the 15-20 grain,
oilseed, pulse and special crops that
are produced by farms in the designated
area.
If CWB supporters can’t be clear and
realistic about what they’re feeling,
nobody will be able to help them. The
antics at last week’s producer meetings
took them another big step towards
losing their organization entirely. Just
like how emotions can get in the way of
good grain marketing decisions, all of
this drama is only hurting the
industry’s ability to envision a
successful future.
www.farmlinksolutions.ca
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