15 Business Days

Commodity Marketing

Tools

15 Business Days

Feb 10, 2020 | 11:14 1 Long time stalker, first-time poster. I am a farmer and you should be able to tell by this post.
Read a newsletter this past holiday season sent out by one of Canada's Best Managed Companies. In his section the CEO stated that bulk shipping of pulses is killing the industry. I agree with him. I offer a quick solution for him. Quit making us float your finances for 15 business days and I will gladly quit selling to those that pay me with my truck idling on the scale. I am guessing he is a leader among his peers. If he was to start pushing for this change to fix the industry he would probably be able to bring it about. Reply With Quote

  • Feb 10, 2020 | 15:54 2 Those are some of the issues that sure could have been addressed when Grain Act was amended and been handled by Grain Farmers Advocacy Office if it had been implemented like it was recommended. Opportunities were missed big time. Reply With Quote
    Feb 10, 2020 | 17:17 3 If a grainco or processor can't pay after being scaled and graded....there is no sense in dealing with them...

    No reason for 15 days....that's what banks are for....they want the farmer to finance the sale....that's bullshit. ...

    Why is it every one that does their work after the farmer has finished his gets their money before a farmer? Reply With Quote
    Feb 10, 2020 | 18:09 4 I wouldn’t ship my product if it weren’t cleaned and bagged and I am dealing with a respectable long-time bonded buyer. I don’t sleep so good with my arse hanging out. Too many things can change en-route as in admixture, contamination when product is bulk. Now Europeans are testing for everything. Reply With Quote
    iceman's Avatar Feb 10, 2020 | 18:28 5 Do you have a link to the article birddog ?

    Iceman Reply With Quote
    Feb 10, 2020 | 19:50 6 http://simpsonseeds.com/the-pulse-winter-newsletter-4-2-2-2-2/ Reply With Quote
    Feb 10, 2020 | 21:12 7 That's my point though, do you call the Grain Commission every time you make a sale sumdumguy? The transaction happens at the pit. That is where you lose all your power. Possession is 9/10 of the law. These guys should be paying up. This industry isn't new anymore. If this CEO wanted this problem to be fixed he could step up. But he doesn't. Why not? They are an old company and so are many others that we deal with. They shouldn't need us to float them anymore. Reply With Quote
    Feb 10, 2020 | 21:40 8 Simple answer....there is no money in the special crop business. Hasn’t been for over 20 years. Bulk business by line companies has been done at a loss and covered by fertilizer and seed sales to the same farmer. Little guys and big guys have been going out of the business for years....it’s a sick industry...sad when it used to be such a powerhouse and saved many farms in the 80’s and 90’s when the CWB choked the hell out of farmers cash flow. Remember they used to take 18 months to pay you with your own money. Memories are short! Reply With Quote
  • 3 Likes


  • Feb 11, 2020 | 08:32 9
    Quote Originally Posted by Crestliner View Post
    Simple answer....there is no money in the special crop business. Hasn’t been for over 20 years. Bulk business by line companies has been done at a loss and covered by fertilizer and seed sales to the same farmer. Little guys and big guys have been going out of the business for years....it’s a sick industry...sad when it used to be such a powerhouse and saved many farms in the 80’s and 90’s when the CWB choked the hell out of farmers cash flow. Remember they used to take 18 months to pay you with your own money. Memories are short!
    Are you kidding? All the ones that supposedly went broke retired as multimillionaires. Reply With Quote
    Feb 11, 2020 | 10:35 10 Birddog, I hear you, but gotta say a couple of things. #1 margins are getting squeezed to zip as the industry matures. #2 - Small processors are investing huge right now just to provide pristine product- colour-sorted, shiny, clean food for buyers of all types. #3. It is not a level playing field. Just like farmers, some big guys are operating with some one else’s money, even government and they can out-bid you until you are working at a loss. We all know how that goes. #4. The money from the other end isn’t seen for a long time, like 90 days plus and the middle man is floating the deal. 5. There’s a reason many companies have come and gone. 6. It’s not a cakewalk

    Let me tell you what the pulse industry was like in the eighties (in the beginning). Producer hauled lentils into a plant where they were cleaned and bagged. Producer paid 3 cents a pound to the processor and storage charges started when your bags hit the concrete floor. The bags were shipped to Montreal at producer’s cost, now the growers lentils were sitting in Montreal. When the CGC got around to it, they would probe the bags and give your product an official grade cert - more port charges. Then producer could sell the product through any broker and get paid when the bags hit the other side of the ocean. These lentils were the producer’s responsibility if anything went wrong, bags were damaged, missing, mouldy, mouse deficated on them, container boat sunk. Then we had odd lots sitting on the plant floor because lentils were sold in 40,000 lb. lots and there was overage. I could go on and on as Agdevco, CGC, Pulse Growers, governments, processor groups, farmers, and others worked to grow the industry. I know it is not perfect and you can’t satisfy everybody all the time. But processors try hard. Reply With Quote
  • 1 Like

    LEP

  • Feb 11, 2020 | 10:46 11 Then there came the epics of big grain companies pre-selling product from the January before the crop got planted. There were sagas along the way and they found out you couldn’t count on the product coming off the field by a certain day and you couldn’t always count honour of commitments. Prices spiked from 18 cents to 70 cents in days. Evolution and disasters and success stories for sure but I think I can safely say it was interesting times and the industry seems to be serving both sides pretty well. I’ll probably get back lash but without this industry, it would have been different times, especially when the CWB was in control. Reply With Quote
    LEP
    Feb 11, 2020 | 10:47 12
    Quote Originally Posted by the big wheel View Post
    Are you kidding? All the ones that supposedly went broke retired as multimillionaires.
    Well what are you doing farming? I am sure there is plenty of room on the gravy train. Hop on. Reply With Quote
    Feb 11, 2020 | 12:48 13 I was just offering Greg, Murad and other leaders in their industry to take the lead and fix the problem. However, sumdumguy you have explained very well the excuses they can use to make it the fault of the farmer when these export barriers come up. The processors must use rotating lines of credit to buy our product? Would paying on the scale versus waiting 15 days then throwing the cheque in the mail the first afternoon after the weekend (making it closer to 20 business days) really stretch these lines of credit? They must be receiving payment from the other end on a regular enough basis? Reply With Quote
    Feb 11, 2020 | 13:33 14
    Quote Originally Posted by LEP View Post
    Well what are you doing farming? I am sure there is plenty of room on the gravy train. Hop on.
    Who says I m not? Lmao would you like 38 cents for canary right now? Reply With Quote
    LEP
    Feb 11, 2020 | 13:42 15
    Quote Originally Posted by Birddog View Post
    I was just offering Greg, Murad and other leaders in their industry to take the lead and fix the problem. However, sumdumguy you have explained very well the excuses they can use to make it the fault of the farmer when these export barriers come up. The processors must use rotating lines of credit to buy our product? Would paying on the scale versus waiting 15 days then throwing the cheque in the mail the first afternoon after the weekend (making it closer to 20 business days) really stretch these lines of credit? They must be receiving payment from the other end on a regular enough basis?
    Actually it does. If in your example it is 20 days then they would have to pay for 20 days of product. So for instance if a processor does $100 million in sales a year, it would take an additional $5,500,000 in credit/equity minimum. So it is a big deal.

    Not saying delayed payment is right, but if the industry was forced to go to 1 day payment or same day payment you would have to deal with maybe P&H, Viterra and Richardson?? Guess which way basis would move on special crops then? Reply With Quote
    LEP
    Feb 11, 2020 | 13:43 16
    Quote Originally Posted by the big wheel View Post
    Who says I m not? Lmao would you like 38 cents for canary right now?
    Ok, good for you. You getting paid same day for it?? Reply With Quote
    Feb 11, 2020 | 13:54 17 And if you're a farmer with total of sales of $2,000,000 waiting 20 days for $250,000 isn't a big deal? Reply With Quote
    LEP
    Feb 11, 2020 | 14:02 18
    Quote Originally Posted by Birddog View Post
    And if you're a farmer with total of sales of $2,000,000 waiting 20 days for $250,000 isn't a big deal?
    Just saying the result will be less companies to deal with and that usually results in money out of pocket.

    If you are targeting cashflow for March and you deliver first week of Feb with a cheque two weeks later are you out anything?

    Delivery gets pushed with the line companies as much as the special crop companies. But I know for sure it will be like harvest season all year round if we only have the choice of three to sell to. Reply With Quote
    Feb 11, 2020 | 14:54 19 You guys are absolutely right. Thanks for industrysplaining it to me. The argument of only having line companies to deal with is an old CWB supporter argument isn't it? Probably easier for Murad to keep using farmers as a form of financing than giving Buffett a call. Best not to change. Small companies on the verge of insolvency are adding to my bottom line. Reply With Quote
    Feb 11, 2020 | 15:05 20 I feel like I am reading articles from 100 years ago when they were discussing how farmers were getting taken advantage of and set up producer owned grain companies and co-ops and started the Board of Grain Commissioners to monitor and control the grain industry "In the interest of producers" What happened have we came a full circle. Reply With Quote
    LEP
    Feb 11, 2020 | 15:07 21
    Quote Originally Posted by Birddog View Post
    You guys are absolutely right. Thanks for industrysplaining it to me. The argument of only having line companies to deal with is an old CWB supporter argument isn't it? Probably easier for Murad to keep using farmers as a form of financing than giving Buffett a call. Best not to change. Small companies on the verge of insolvency are adding to my bottom line.
    Bahaha. Actually exactly the opposite. CWB supporters love the line companies and discourage dealing with these young upstarts.

    Like I said you don't have to deal with anyone that doesn't pay you on the driveway now. A CWB supporter would love more regulation in the industry. Or you could just use the free market approach. Everyone sells to only those that pay right away and the others, if their sales are impacted have to adapt or lose out.

    Pretty simple.
    Last edited by LEP; Feb 11, 2020 at 15:10.
    Reply With Quote
    Feb 11, 2020 | 15:16 22 Exactly. So don't write a newsletter blaming farmers because you won't change. Reply With Quote
    LEP
    Feb 11, 2020 | 15:24 23
    Quote Originally Posted by Birddog View Post
    Exactly. So don't write a newsletter blaming farmers because you won't change.
    Not sure what you are talking about. I went and read the newsletter you are talking about and don't see anything blaming farmers for anything. I paraphrase, but he does mention selling uncleaned lentils is short term term thinking that will bite the industry in the butt. Not sure how that blames farmers.

    I think you are alittle sensitive. Reply With Quote
    Feb 11, 2020 | 20:00 24 I wasn't always this sensitive. After ILTA went under being an unsecured lender started getting to me. They looked to be going great guns and were very good at paying within 10 days. It was a situation that should have caused more change in the industry but it hasn't.
    Oh well, time to switch to dove I guess. Reply With Quote
    LEP
    Feb 12, 2020 | 10:18 25
    Quote Originally Posted by Birddog View Post
    I wasn't always this sensitive. After ILTA went under being an unsecured lender started getting to me. They looked to be going great guns and were very good at paying within 10 days. It was a situation that should have caused more change in the industry but it hasn't.
    Oh well, time to switch to dove I guess.
    I agree that waiting for payment is a real risk and am not saying that it is not a problem. But in this environment of tight margins, choose who you sell to carefully.

    My point is if the rules of operation get regulated to one day payment the choices become smaller and the basis will become wide.

    If waiting causes you stress, look for a quicker, more secure grain buyer. Let someone else wait for their payment. Reply With Quote