E Bay for grain

[malleefarmer]

So you guys cant deliver grain to your local elevator unpriced and warehouse it there until prices rise as we can here in australia?

Are you elevators privately owned or owned by grain companies?

[charliep]

malleefarmer

For the most part, there is no farmer storage in elevator system. The key
to the Canadian system (or perhaps anchor) is most grain is stored on
farm. The only time grain hits the commercial system is when it is
delivered against an actual sale (i.e. the grain company takes delivery).
Farmers can purchase space at grain terminals via condo storage but that
is a different approach.

Will have to come to Australia at some point but my understanding is this
is quite different than what you are used to. Much has to do with
distance to port.

To be clear, most farmers have enough on farm storage to hold a whole
years harvest. If they don't, they have to make plans to sell crop right off
the combine via contracts (delivery and price). The interior
silos/elevators here are called high through put with objective only
having crops sit in the facility 2 months or less. Put another way, an
high through put elevator with capacity of 40,000 tonnes (common size)
would like to handle at least 250,000 tonnes of grain in a year. It means
they don't want to tie up storage space with something that isn't moving
- they make more money on elevation (handling fees) than storage.

That is only half the story. You still have to move grain a minimum of
800 miles/1,400 kilometers to get to port to a maximum of close to
1,600 miles/2,800 kilometers to Vancouver and an even longer distance
if going east through the St. Lawrence. Storage capacity at west coast
position is even more limiting so for sure no grain moves into terminal
position unless there is an export sale/it will move quickly. Thunder
Bay/St. Lawrence have more storage capacity but higher cost/no one
wants to carry grain/risk.

Have made the explanation too simple but means that Canadian farmers
behave very differently/have fewer alternatives simply due to distance to
market. It would be nice to deliver directly to a giant terminal elevator
close to the ocean/markets and have the option of storing it until the
farmer choses to sell like you and ianben.

[charliep]

A long ways from ebay but here are some numbers on
our commercial storage capacity.

<a href="http://www.grainscanada.gc.ca/statistics-
statistiques/geic-sgc/2009-10-30.pdf">cgc estimate
capacity 2009</a>

[charliep]

Link didn't work try this and click grain elevators in Canada. Table 1. Hopefully works this time.

<a href="http://www.grainscanada.gc.ca/statistics-statistiques/geic-sgc/geicm-msgc-eng.htm">capacity</a>

Primary elevator (local elevators on prairies) have a capacity of about 5.4 mln tonnes versus normal production of
close to 50 mln tonnes about half of which is exported.

Capacity at the west coast is about 1.2 mln tonnes with the target of turning this amount every month.

[ianben]

Hi Charlie
Looks like I am not the only one working on the bow and arrow after all.

Some work gone into that agclearing site. Have you been involved?

Not had time to read it all yet but still see no feedback as ebay option.

I think this could solve the farmer not delivering as described and also the buyer not recieveing goods sent issues which create much buyer/seller conflict.

For farmer to list a lot he would have to send sample to Egrain which they would have tested and post next to his lot.
If grain delivered did not meet or exceed sample he would get bad feedback.
ie reason posted against his name.

Buyer would also have to send sample if he wanted to claim for off spec, but again this would be posted and the buyers who make large $ claims for small off spec amounts would be identifided.

This would also allow buyers to buy high/low bushel grain if they wanted. Farmers to be payed a premium or discount for low/high moisture if that is what they would be delivering.

We like you are mostly on farm storage and our exports are mostly just in time delivery. I know one small port where the lorry backs up a ramp and tips directly into the ship.

With a system which identified individual lots and locations by exact grade buyers could blend or avoid any traits they wished and manage their logistics so much better.

malleefarmer
How much volume is trading on this site?
How are farmers using it?
Is there alot of grain way over the market or do you just try for a little above?

[charliep]

I have only been involved to a limited extent although the individuals
who have done the work are good friends. The cash clearing house is
only a concept at this point with ICE Canada (intercontinental exchange)
looking at commercializing. Still a ways to go before offered and as you
have seen in the past, quite controversial.

There is a company offering a service like you describe in Alberta for
feedgrains but still in the launch stage.

An issue is your question/others question about on standardized
contracts and in some cases dispute resolution. Is much easier when
stored and graded.

A plus is standardized contracts. Current grain contracts (including the
CWB) are written by the buyer with clauses in their favor. Seller has few
rights. A benefit is the contract should be fair for both the buyer and
the seller. Don't know how works in your bay concept but would be a
challenge/benefit here in Canada over and above dispute resolution on
grade for farm stored - malleefarmer has indicated this is a bridge they
still need to cross.

[malleefarmer]

im just a dumb aussie probably related to mr white......

but why dont farmers in canada and or your co-ops build a centalized storage system that holds 120,000 metric tonne of grain,then you could get the ball rolling

i know a group of victorians i think 230 growers have each put in 30k to build storage and hopefully will grow and its for members and non mebers of the co-op

i prempt the reply "we have a single desk wont happen"

look pools are alive and well here abb and awb still doing great,other companies offering pools, henny penny thought the sky was falling in too....

[malleefarmer]

while im at it, in our deregulated market farmers are now informed of shipping schedules and our wharves are fully booked with ships from late dec through to march, viterra has about 60% of the ships and cargill,dreyfus,glencore,toepfer awb have the rest.

some ships are for barley some are wheat its all in the public forum.

So if growers hold out selling whilst buyers need tonnes to fullfill contracts buyer either pay more for grain to fill boat or pay demmurrage fees going to a interesting few months

the same thing happened last year buyer scurrying to fill boats at last minute and cutting into there margin, or filling with pooled grain probably both

wish you guys could enjoy the challenges of a deregulated market

[charliep]

Good question on the larger storage capacity.
Number of crops and class/variety/protein has
been one factor. For wheat, western Canada has 9
classes of wheat - hard red spring, hard white
spring, white prairie spring, red prairie spring,
extra strong gluten, soft white, hard red winter,
multipurpose or whatever the new class is called
and durum. From there 2 to 5 grades and multiple
protein segregations. Very complex to say the
least.

The process to date is to leave on farm and then
call forward into the elevator system as
needed/blend to customer specifications. Not a
good answer but will leave to others to help me.

[ianben]

We have some central stores being built too to offer this blending ability which can then deliver on spec.

But is it an extra cost we could avoid or improve.

Most years the weather will see us produce more of one grade than another.Then finding the goood to blend with the bad or visa versa is the problem

Our feed wheat spec is
Max 15.00% moisture
Max 2.00% admix
Min 72.0 kg/hl
Sprouted grains 6.00%

This is not what I produce nor what buyers necessarily need.

This is an invoice for feed wheat delivered 07/08

Feed Wheat 447765 DI 24044685 02/07/2008 29.360 200.00 / mt 5,872.00 UKZ
Carrier: FRONTIER Vehicle Reg: KX57JDZ
Delivery Ref: 24000450

Weighbridge Charge (PL) 7.50 -7.50 UKE
AHDB-HGCA Levy (Wht) VAT 0.40 -11.74 UKH
Moisture Content Result 15.30 1.50 -44.04 UKZ

Test Description Results
Moisture 15.30 %
Specific Weight 72.10 kg/hl




Feed Wheat 447765 DI 24044792 03/07/2008 29.440 200.00 / mt 5,888.00 UKZ
Carrier: FRONTIER Delivery Ref: 24000450

Weighbridge Charge (PL) 7.50 -7.50 UKE
AHDB-HGCA Levy (Wht) VAT 0.40 -11.78 UKH
Moisture Content Result 15.40 1.50 -44.16 UKZ
Specific Weight Result 71.7 1.00 -29.44 UKZ

Test Description Results
Moisture 15.40 %
Specific Weight 71.70 kg/hl




Feed Wheat 447765 DI 24044995 08/07/2008 28.760 200.00 / mt 5,752.00 UKZ
Carrier: FRONTIER Vehicle Reg: KX57JEJ
Delivery Ref: 24000450

Weighbridge Charge (PL) 7.50 -7.50 UKE
AHDB-HGCA Levy (Wht) VAT 0.40 -11.50 UKH

Test Description Results
Moisture 13.00 %
Specific Weight 73.80 kg/hl

Total Qty 87.560

In this example the buyer managed to claim £117.64 even though the average sample of the three loads was in spec.

About £1.34/tonne

In my concept emarket this lot would have been sampled by me and tested independantly and results posted with lot.
Buyer could then choose to buy or not, but if delivered grain was within agreed margins no claim would be justified.

Would a buyer make claims like this if it where posted for everyone to see?

This would allow buyers to buy off farm and either blend themselves or avoid the lots which had the element which they dislike, low bushel, for example.