Canadian grain Levies/Royalties

[walterm]

When a seed grower grows seed there is Royalty costs involved and are built into the seed price at the time

Seed Royalty prices $1.50-$2 bu on average
Application fees for growing seed
Crop inspection fees
Cleaning cost to clean to certified standard $1 bu plus
Trucking cost to truck seed to seed plant
Trucking cost to haul clean seed back for storage
Screenings cost when you clean seed to certified standards you will have more screenings than cleaning commercial standards
Use 15% as a average number
Most screenings get sold into feed market at feed price
Feed price is usually 1/2 or less of price of product
Then you have extra work of cleaning air drills , combines , anything that handles the seed from seeding to harvest

Extra work of isolation strips around seed fields
Having to pay wages and have someone to load seed for customers or run a tractor so you can load seed when you are seeding in the spring time


Will use a example of Durum this year

Durum market price #1 $7 bu
Inspection and application cost. $1 bu
Trucking cost $0.65
Cleaning cost. $1
Royalties. $1.8
Screenings loss. $0.50

$11.95

Certified Durum seed price on Average is $12 bu and get lower price if you by bigger volume


Lots of times we don’t sell all the seed that is produced and the seed gets sold commercially to the grain terminals. We don’t pay royalties then but all the other costs are still there.
When a seed grower grows durum to produce certified seed they have to use registered, foundation or higher pedigreed to produce certified. The price of registered Durum would be $15 on average and $17 for foundation.

Now that depresses me after typing in all these numbers as it looks like we will be lucky to break even with Durum seed this year.

Thx nice break down. My question is why are seed growers so pro EPR. If farmers end up paying EPR on bin run won't they just elect to use more of their own bin run seed rather than from seed grower at current prices as long as germ and vigor is there.

Will the result in lost sales be more or less than the system today including the small amount of brown bag seed sold from farmer to farmer.

[furrowtickler]

When a seed grower grows seed there is Royalty costs involved and are built into the seed price at the time

Seed Royalty prices $1.50-$2 bu on average
Application fees for growing seed
Crop inspection fees
Cleaning cost to clean to certified standard $1 bu plus
Trucking cost to truck seed to seed plant
Trucking cost to haul clean seed back for storage
Screenings cost when you clean seed to certified standards you will have more screenings than cleaning commercial standards
Use 15% as a average number
Most screenings get sold into feed market at feed price
Feed price is usually 1/2 or less of price of product
Then you have extra work of cleaning air drills , combines , anything that handles the seed from seeding to harvest
Extra work of isolation strips around seed fields
Having to pay wages and have someone to load seed for customers or run a tractor so you can load seed when you are seeding in the spring time


Will use a example of Durum this year

Durum market price #1 $7 bu
Inspection and application cost. $1 bu
Trucking cost $0.65
Cleaning cost. $1
Royalties. $1.8
Screenings loss. $0.50

$11.95

Certified Durum seed price on Average is $12 bu and get lower price if you by bigger volume


Lots of times we don’t sell all the seed that is produced and the seed gets sold commercially to the grain terminals. We don’t pay royalties then but all the other costs are still there.
When a seed grower grows durum to produce certified seed they have to use registered, foundation or higher pedigreed to produce certified. The price of registered Durum would be $15 on average and $17 for foundation.

Now that depresses me after typing in all these numbers as it looks like we will be lucky to break even with Durum seed this year.

Thanks for showing numbers Jag without a bunch of rhetoric.

[farmaholic]

When I can no longer get any more income from the market the next thing I need to do is shave costs. Maybe some of the costs paid for producing certified seed need to fall! Take some of those costs up with the seed grower associations if they're too high. No one cares if the primary producer is profitable as long as everyone supplying goods and services is profitable and can take as much as the market will bear.

How about the entities supplying goods and services make the adjustments for a change? But NO, no one wants to give up anything they've gained and established, well neither do I. How much waste in dead-beat dead-weight employees? How much waste in excessive advertising? How much waste in useless bureaucracy? How about thinner margins and belt tightening like primary producers are forced to do when finances get tight. Don't expect your customers to do anything you won't DO!

[Jagfarms]

It came down to a very close vote at seed growers meeting. I don’t think 🤔 they are really sure how it’s going to work yet and they are still workin things out.

The way it sounds like it will be in place for new varieties coming out after these new rules are in place is won’t effect varieties that are out now previous to the new rules coming into place.

So when I sell seed as a seed grower of a new variety I will not have to pay royalties on the seed that I sell.

The farmer that buys the seed from the seed grower will pay the royalties on the seed. Before the seed grower was paying the royalties for you and now the farmer will pay the royalties. The price of the Certified seed will be a lower purchase price from the seed grower if we do not have to pay royalties.


If the farmer uses that new variety for seed the next year or years they will pay royalties on the amount of seed that is used for planting on thier farm.


I’m Not sure what the Royalty amount will be.


My views. It could discourage brown bagging seed as Certified seed prices will be more competitive than using your own seed for new varieties.
If the farmer has to pay royalties on seed they use will they share the new seed technology with thier neighbors at no cost?

In the future I think the seed companies will be checking seed varieties at delivery points and in the field. They can check varieties by doing DNA testing on the seed. Will have to have a record where the the farmer got the seed from.

[TOM4CWB]

When I can no longer get any more income from the market the next thing I need to do is shave costs. Maybe some of the costs paid for producing certified seed need to fall! Take some of those costs up with the seed grower associations if they're too high. No one cares if the primary producer is profitable as long as everyone supplying goods and services is profitable and can take as much as the market will bear.

How about the entities supplying goods and services make the adjustments for a change? But NO, no one wants to give up anything they've gained and established, well neither do I. How much waste in dead-beat dead-weight employees? How much waste in excessive advertising? How much waste in useless bureaucracy? How about thinner margins and belt tightening like primary producers are forced to do when finances get tight. Don't expect your customers to do anything you won't DO!

I agree Farmaholic
Disruption will occur ; of this there can be little doubt.
If real tangible value is not the result of the administration and present baked in costs of Pedigreed seed ...in the future... as gene technology changes how we provide value...these efficiencies and productivity must add value ...to remain competitive with other countries providing quality products globally...
I do not grow quality planting seed to justify the system that exists today.
The end of this journey is to provide real tangible value to those farmers we serve with quality planting seeds .
EPR collection of Plant Breeder royalty payment appears to provide maximum flexibility to transition new technologies and most efficient future and value solutions.

This therefore is where the end will be required to be...
Therefore your comments are valid and wise people people need to incorporate solutions for valid improvement to how we serve our community.
Cheers and blessings.

[katoe]

Tasf .. yes we have commodity checkoffs but likely less than half goes to research unfortunately because if 90% of it went to research i would leave our money in them.

[TASFarms]

Looks like auzzy’s Like using older varieties so they pay lower epr. I don’t here to many of them using all new varieties.

[westernvicki]

EPR encourages the plant breeder to populate the variety, for this reason, the Australian system supports "Brown bagging" with breeder applied rules.

The farmer negotiation in Canada to define a better process is limp and ill defined: the process of testing varieties and providing data to farmers is insufficient. While Canada must remain competitive in the world, adding more costs without a direct link with varietal testing data it is just more cost. The last thing we need in the globally competitive environment we are catapulting into, is higher costs with no obvious gain. And it looks like the course we are on, as no producer groups have stepped up to negotiate the terms required to add millions of dollars in royalties to the costs of producing crops in Canada.

As for the seed grower, we are seed growers, on our farm the single largest benefit we have had from growing seed is varietal awareness: picking the varieties and crops that give you incremental income gain either by yield, quality, harvest management and market penetration. And as a rule, shouldering the cost of kicking those out that look good in the book but perform shitty in the field (which is why better data is essential to supporting greater expense).


Jag Farms provided an awesome summary; the cost of failed lots of seed is never cheap, but ever present.

[malleefarmer]

"So in a nutshell forcing us to pay for mediocre seed that doesn’t create a whole lot more value."

Im a simpleton well dont grow the new seed if you dont think its gonna perform simple as that or again am i missing something.

Again not exactly sure of numbers but lets say there are 10 new wheat in australia for 2019 most are only equal to previous best or maybe 1 or 2% higher but may have other superior traits.

None of them turn me on so will continue to grow my 5 year wheat but will get a coupla tonne to bulk up again to have clean seed for 2020 simple as that.

If my neighbours try new ones and turn out ok will either get new seed from cert seed grower or get some from my neighbour and pay full epr at point of sale in the future 2020 or 2021 depending on how much i get if i do.

Obviously this logic/system dont work in western canada.

[Oliver88]

Thx nice break down. My question is why are seed growers so pro EPR. If farmers end up paying EPR on bin run won't they just elect to use more of their own bin run seed rather than from seed grower at current prices as long as germ and vigor is there.

Will the result in lost sales be more or less than the system today including the small amount of brown bag seed sold from farmer to farmer.

This is the big question.
Why haven’t we heard any seed farmers speaking out against a seed tax?

The optics are very bad.