I've been writing articles for some
rural community newspapers on the
upcoming change. Thought I'd post them
here for viewing and comment. This is
the first of 5.
*****
Positive Future for Canada’s Grain
Industry
The debate about the Canadian Wheat
Board (CWB) monopoly is finally moving
forward, and we here at FarmLink
Marketing Solutions couldn’t be more
excited about the future. New
opportunities are already starting to
form, in the grain handling and
processing sectors, in the cash markets
for wheat, durum and barley, and for
individual farms and communities across
the Prairies.
Firstly, it’s worth providing some
background on FarmLink’s position
because this debate has become so
polarized and emotional. FarmLink
Marketing Solutions was started by Mark
Lepp and Brenda Tjaden Lepp in 2004, and
has since grown to a staff of 30
experienced grain merchant-analysts and
local Marketing Advisors working with
individual farms across Manitoba,
Saskatchewan and Alberta. FarmLink
provides professional market analysis
and hands-on farm financial consulting
with a focus on maximizing farm
revenues.
On behalf of our clients, we have
already started discussions of 2012-crop
pricing and contracting with wheat,
durum and barley buyers. There is no
question that marketing directly to
commercial players, including but not
limited to existing line companies, is
going to be a lot simpler than what
farmers were facing through the CWB’s
pooling and cash pricing options. Malt
barley will be traded similarly to large
green lentils; durum wheat just like
flax; and spring wheat like canola but
with a more variable basis related to
protein and milling quality. The point
is, the contracting and pricing systems
exist in western Canada to facilitate a
smooth transition in marketing from the
CWB to commercial mechanisms.
It’s becoming apparent that there are
numerous companies currently assessing
the existing infrastructure in western
Canada, and trying to decide whether to
buy or build elevators and/or processing
plants. Essentially what we are seeing
is the Canadian Wheat Board’s
government-backed work to develop
premium pricing in end-use markets shift
to private commercial mechanisms
functioning within western Canada. This
will involve new investments driving
economic growth in rural communities.
Farm businesses will see similar
opportunities to better manage their
operations’ financial and marketing
goals with the opening of the markets
for Board grains. In particular, growers
stand to improve their whole-farm
marketing performance simply as a result
of removing the requirement to deal with
restricted delivery, payment and/or
valuation of wheat, durum and barley.
Fluid farm manageability coupled with
increased competition and new product
lines and processing methods for Board
grains are just a few of the new
opportunities on the way in 2012. We
expect to see more innovative end uses
and valuations in local grain marketing
opportunities and price levels come
available very soon.
All of this is not to say that western
Canada will become a permanent island of
high cereal grain prices; the reality is
and always will be that markets go up
and markets go down, but the network of
outlets for Board grains is going to
increase in number and improve in scope.
This will facilitate managing farm
finances and successful marketing
decisions, leading to better
profitability in grain farming overall.
rural community newspapers on the
upcoming change. Thought I'd post them
here for viewing and comment. This is
the first of 5.
*****
Positive Future for Canada’s Grain
Industry
The debate about the Canadian Wheat
Board (CWB) monopoly is finally moving
forward, and we here at FarmLink
Marketing Solutions couldn’t be more
excited about the future. New
opportunities are already starting to
form, in the grain handling and
processing sectors, in the cash markets
for wheat, durum and barley, and for
individual farms and communities across
the Prairies.
Firstly, it’s worth providing some
background on FarmLink’s position
because this debate has become so
polarized and emotional. FarmLink
Marketing Solutions was started by Mark
Lepp and Brenda Tjaden Lepp in 2004, and
has since grown to a staff of 30
experienced grain merchant-analysts and
local Marketing Advisors working with
individual farms across Manitoba,
Saskatchewan and Alberta. FarmLink
provides professional market analysis
and hands-on farm financial consulting
with a focus on maximizing farm
revenues.
On behalf of our clients, we have
already started discussions of 2012-crop
pricing and contracting with wheat,
durum and barley buyers. There is no
question that marketing directly to
commercial players, including but not
limited to existing line companies, is
going to be a lot simpler than what
farmers were facing through the CWB’s
pooling and cash pricing options. Malt
barley will be traded similarly to large
green lentils; durum wheat just like
flax; and spring wheat like canola but
with a more variable basis related to
protein and milling quality. The point
is, the contracting and pricing systems
exist in western Canada to facilitate a
smooth transition in marketing from the
CWB to commercial mechanisms.
It’s becoming apparent that there are
numerous companies currently assessing
the existing infrastructure in western
Canada, and trying to decide whether to
buy or build elevators and/or processing
plants. Essentially what we are seeing
is the Canadian Wheat Board’s
government-backed work to develop
premium pricing in end-use markets shift
to private commercial mechanisms
functioning within western Canada. This
will involve new investments driving
economic growth in rural communities.
Farm businesses will see similar
opportunities to better manage their
operations’ financial and marketing
goals with the opening of the markets
for Board grains. In particular, growers
stand to improve their whole-farm
marketing performance simply as a result
of removing the requirement to deal with
restricted delivery, payment and/or
valuation of wheat, durum and barley.
Fluid farm manageability coupled with
increased competition and new product
lines and processing methods for Board
grains are just a few of the new
opportunities on the way in 2012. We
expect to see more innovative end uses
and valuations in local grain marketing
opportunities and price levels come
available very soon.
All of this is not to say that western
Canada will become a permanent island of
high cereal grain prices; the reality is
and always will be that markets go up
and markets go down, but the network of
outlets for Board grains is going to
increase in number and improve in scope.
This will facilitate managing farm
finances and successful marketing
decisions, leading to better
profitability in grain farming overall.
Comment