My Conversation with John De Pape

[agstar77]

So if all growers did as you suggested would they all earn more and who would lose? Since you worked in the grain industry , you would know better than I , where corruption is more likely.

[agstar77]

Agstar always had a thing for John, dunno why. I can understand weariness of yet another "expert" or "consultant". The word marketing alone ticks me off.
Whatever that may be.
I have not met anyone else in 40 years who is endlessly willing to teach you the same skills used by the industry trading desks every day.

All those trading skills are of no use if you can't or don't have the resources to use them. In other words it is all theoretical. Maybe A.I. will change that. The Trading world is risky business, thats why grain traders are generally at a 50% batting average. The best you can hope for is decreasing volatility with those trading strategies.

[blackpowder]

So if all growers did as you suggested would they all earn more and who would lose? Since you worked in the grain industry , you would know better than I , where corruption is more likely.

How can you worry about who is losing. Not sure I understand.
Losing or winning is a mindset that needs explanation in this context.
I'm told a large percentage of US growers use the tools available to us.
Practically an inverse of CA producers, something like 90/10.
Maybe the better question is.
How much am I leaving on the table.

[blackpowder]

All those trading skills are of no use if you can't or don't have the resources to use them. In other words it is all theoretical. Maybe A.I. will change that. The Trading world is risky business, thats why grain traders are generally at a 50% batting average. The best you can hope for is decreasing volatility with those trading strategies.

Agree. I seldom use them and when I do it's usually simple strategies.
Insurance strategies for actual growers.
I don't blame the market or those better equipped just because I'm not.
Leave the word association of trader/gambler at the coffee shop.
I wish I were properly skilled at basis study and carry capture. An old dog lol.
Volatility has a cost that I insure against.
For ex. I have sometimes sold (the physical) 90% of my wheat crop by July 4. Risk free with a small premium cost.
I don't pay a company for storage. I pay myself, for a small premium. Sometimes selling it to them at the beginning of the equation. TMV money cost = 0. These are not theories.

[jdepape]

So if all growers did as you suggested would they all earn more and who would lose? Since you worked in the grain industry , you would know better than I , where corruption is more likely.

Anyone who uses the tools available will do better. I run a hedge program where I employ a simple process where we:
- hedge in futures incrementally (do it right and you get better than average prices)
- roll hedges forward effectively to pick up the carry (experience shows a price improvement of at least $25/tonne in canola)
- advise on when to lock in basis (easier to forecast than futures - easily end up in the top end of the range)
Studies show that 70% of the grain sold by farmers is in the bottom 25% of the price range in a year.
We've had years where our net result is a price better than the highest street price all year. Not in the top 10-15% - higher than the high.

I think it's hilarious that you think if someone gains that someone must lose. That's a CWB axiom, isn't it? I remember they would always say that if the graincos were making more money then farmers were making less; they always wanted to protect the farmers' share of the pie. They had this attitude the whole time as their global market share dropped like a rock.

If I ever write a book about the CWB I will call it "The Brotherhood of the Shrinking Pie".

Still no ideas on where the corruption is, eh? Me neither.

[blackpowder]

LMAO

Disclosure:
I am presently not a Farmco client.
I am no one's fan club.
Simply that I know what he says is correct.

[AlbertaFarmer5]

So if all growers did as you suggested would they all earn more and who would lose?

The most important thing is that we're all equally poor. Can't have anyone being more successful.

[agstar77]

I am still wondering where the extra profit is coming from. Perhaps the grain companies will give up some of their profits so these marketing gurus can gain more. Maybe they will raise prices to the customer. Perhaps there is a new math that you have discovered where 2 plus to equals 5. I am not saying some could gain but that gain has to come from somewhere. Also could you explain the 25 a tonne extra compared to who?

[jdepape]

Years ago I met a farmer who basically believed that. “I don’t care if the CWB doesn’t get good prices - as long as we all get the same”.

you know what they say about socialism - it’s the equitable distribution of poverty.

[FarmJunkie]

Years ago I met a farmer who basically believed that. “I don’t care if the CWB doesn’t get good prices - as long as we all get the same”.

you know what they say about socialism - it’s the equitable distribution of poverty.

This is why we were in the dark ages since WW2. Let’s all hold hands and race to the bottom! Which is exactly happening in other factions of our society. South Africa 2.0!