The following appeared in the WP. Enough to break a socialists heart.
September 29, 2011
As the Conservative government plans to end the Canadian Wheat Board single desk in time for the 2012-13 crop year, many farmers wonder what the future holds.
Western Producer reporter Brian Cross visited producers who farm on both sides of the Canada-U. S. border to learn their experiences in the two marketing systems and their expectations about life after the CWB monopoly.
The smile on Dave Rasmussen’s face is as bright as the afternoon sunshine as he finishes the 2011 durum harvest on his farm in northern Montana.
Rasmussen raises cereals, pulse crops and oilseeds just a few kilometres south of the Canada-U. S. border. This year’s durum crop is shaping up to be a profitable one.
Grain quality is good and according to the yield monitor on his combine, his last field of durum is yielding 54 bushels per acre, an outstanding yield for Sheridan County, where the family farm is based.
Market signals are also encouraging.
Earlier in the day, the closest grain company — Columbia Grain in Plentywood, Mont. — was offering a cash price of $12.75 US per bu. for top quality durum.
And with production problems affecting much of the prime durum growing area in southern Saskatchewan, Montana and North Dakota, top quality milling grain could be in short supply.
“That works,” says Rasmussen, referring to cash prices in Plentywood.
“That definitely works. At that price, you should be able to make a few dollars.”
Rasmussen, who has been growing and marketing durum in northern Montana since the late 1970s, has already contracted some of this year’s crop at $15 US a bu., a price that comes along only once or twice in a career.
The rest of 2011 crop will be stored on the farm and will enter the market when the time and price are right.
In 2008, cash prices for top quality durum hit $24 a bu. at some Montana elevators.
Producers in Sheridan County are hoping for a similar rally this year, he said.
Rasmussen will also pay close attention this fall to proposed grain marketing changes expected north of the border in Canada.
In addition to growing grain in Montana, the Rasmussen family has farmed in Canada since the mid-1960s so changes to the Canadian Wheat Board will have a direct impact on the family’s bottom line.
Rasmussen acknowledges that he is in an ideal position to compare grain marketing systems in Canada and the United States.
Wheat grown on Rasmussen’s farm near Tribune, Sask., goes into the CWB’s pooling system and is sold by the board.
On the U.S. side, wheat is normally delivered to a couple of local grain companies, one in Plentywood, about 25 km away, and the other in Westby, about 40 km further down the road.
The two U.S. companies compete aggressively for locally produced grain and prices at the terminals usually reflect that competition, he says.
When asked where he would rather sell grain, Rasmussen responds immediately.
“In the past, I can honestly say that I don’t know of one time that we’ve received more money for our wheat in Saskatchewan than we have down here,” he said.
“Over the years, there have been (U. S.) government programs that have affected (profitability), but just as far as selling wheat into the market is concerned, excluding all the government programs, we’ve still been considerably more profitable here than we have been up there.”
Not far away, near Minton, Sask., farmer Rick Jensen will also be watching closely to see what becomes of the CWB.
Like Rasmussen, Jensen has been growing and marketing crops on both sides of the international border for decades.
Given the choice, Jensen would also sell his Canadian grain into the open American market.
“The price up here (in Canada) is typically never as high as it is down there,” said Jensen, who grows pulses and cereals on about 1,700 acres in Montana and 850 acres in Saskatchewan.
Jensen said there have been times when Canadian cereal prices were higher than U.S. prices. On average, however, selling to American grain buyers has been more profitable.
“I think on average, their prices are higher,” he said.
“Certainly, there will be times when U.S. prices are lower because the (U. S.) market tends to fluctuate more, but even with (the CWB’s) interim payments on durum and spring wheat, I think we probably average more down there.”
Jensen thinks the elimination of single desk marketing in Canada will present a challenge to some Canadian growers who have never marketed their own wheat.
He said an open market is more prone to short-term price fluctuations and offers farmers less price stability over the course of a crop year.
In Canada, Pool Return Outlooks offer a reliable estimate of average annual crop values and allow farmers to make fairly accurate predictions of annual farm-gate revenues.
On the U.S. side, projecting farm revenues can be more tricky.
An open market is more prone to price variability.
Depending on supply and demand fundamentals, cash prices on any given day can be higher or lower than wheat board returns.
The secret to getting a decent market return, Jensen said, is to watch future and cash prices closely, develop good relationships with local grain buyers, minimize risk by contracting a portion of the crop each year and pay close attention to domestic and global production estimates.
Producers should also be wary of quality discounts, which can vary significantly from one buyer to the next.
“I’m used to both systems and I think the open market has been a good option for me,” Jensen said.
“If the CWB is eliminated, I think there’s going to be a learning curve on the marketing side for some (Canadian) farmers.
“The open market is a good system. You might not get the highest price all the time so when you budget and do your projections, you have to look at futures prices, contract prices and cash prices and you kind of have to expect to get a happy medium …”
Rasmussen, meanwhile, thinks the transition from single desk marketing to an open market structure will be a relatively smooth one.
He said the chance to market his own grain in Canada is a “great opportunity” that will inevitably increase profits at the Saskatchewan-based operation.
“There’s been a lot of speculation by a lot of different people about what will happen,” he said
“There’s always some fear of the unknown which is just common human nature, but marketing wheat in the open market is no different than marketing your lentils, peas or chickpeas.
“I do not consider myself a great marketer but I would much rather do it myself.”
September 29, 2011
As the Conservative government plans to end the Canadian Wheat Board single desk in time for the 2012-13 crop year, many farmers wonder what the future holds.
Western Producer reporter Brian Cross visited producers who farm on both sides of the Canada-U. S. border to learn their experiences in the two marketing systems and their expectations about life after the CWB monopoly.
The smile on Dave Rasmussen’s face is as bright as the afternoon sunshine as he finishes the 2011 durum harvest on his farm in northern Montana.
Rasmussen raises cereals, pulse crops and oilseeds just a few kilometres south of the Canada-U. S. border. This year’s durum crop is shaping up to be a profitable one.
Grain quality is good and according to the yield monitor on his combine, his last field of durum is yielding 54 bushels per acre, an outstanding yield for Sheridan County, where the family farm is based.
Market signals are also encouraging.
Earlier in the day, the closest grain company — Columbia Grain in Plentywood, Mont. — was offering a cash price of $12.75 US per bu. for top quality durum.
And with production problems affecting much of the prime durum growing area in southern Saskatchewan, Montana and North Dakota, top quality milling grain could be in short supply.
“That works,” says Rasmussen, referring to cash prices in Plentywood.
“That definitely works. At that price, you should be able to make a few dollars.”
Rasmussen, who has been growing and marketing durum in northern Montana since the late 1970s, has already contracted some of this year’s crop at $15 US a bu., a price that comes along only once or twice in a career.
The rest of 2011 crop will be stored on the farm and will enter the market when the time and price are right.
In 2008, cash prices for top quality durum hit $24 a bu. at some Montana elevators.
Producers in Sheridan County are hoping for a similar rally this year, he said.
Rasmussen will also pay close attention this fall to proposed grain marketing changes expected north of the border in Canada.
In addition to growing grain in Montana, the Rasmussen family has farmed in Canada since the mid-1960s so changes to the Canadian Wheat Board will have a direct impact on the family’s bottom line.
Rasmussen acknowledges that he is in an ideal position to compare grain marketing systems in Canada and the United States.
Wheat grown on Rasmussen’s farm near Tribune, Sask., goes into the CWB’s pooling system and is sold by the board.
On the U.S. side, wheat is normally delivered to a couple of local grain companies, one in Plentywood, about 25 km away, and the other in Westby, about 40 km further down the road.
The two U.S. companies compete aggressively for locally produced grain and prices at the terminals usually reflect that competition, he says.
When asked where he would rather sell grain, Rasmussen responds immediately.
“In the past, I can honestly say that I don’t know of one time that we’ve received more money for our wheat in Saskatchewan than we have down here,” he said.
“Over the years, there have been (U. S.) government programs that have affected (profitability), but just as far as selling wheat into the market is concerned, excluding all the government programs, we’ve still been considerably more profitable here than we have been up there.”
Not far away, near Minton, Sask., farmer Rick Jensen will also be watching closely to see what becomes of the CWB.
Like Rasmussen, Jensen has been growing and marketing crops on both sides of the international border for decades.
Given the choice, Jensen would also sell his Canadian grain into the open American market.
“The price up here (in Canada) is typically never as high as it is down there,” said Jensen, who grows pulses and cereals on about 1,700 acres in Montana and 850 acres in Saskatchewan.
Jensen said there have been times when Canadian cereal prices were higher than U.S. prices. On average, however, selling to American grain buyers has been more profitable.
“I think on average, their prices are higher,” he said.
“Certainly, there will be times when U.S. prices are lower because the (U. S.) market tends to fluctuate more, but even with (the CWB’s) interim payments on durum and spring wheat, I think we probably average more down there.”
Jensen thinks the elimination of single desk marketing in Canada will present a challenge to some Canadian growers who have never marketed their own wheat.
He said an open market is more prone to short-term price fluctuations and offers farmers less price stability over the course of a crop year.
In Canada, Pool Return Outlooks offer a reliable estimate of average annual crop values and allow farmers to make fairly accurate predictions of annual farm-gate revenues.
On the U.S. side, projecting farm revenues can be more tricky.
An open market is more prone to price variability.
Depending on supply and demand fundamentals, cash prices on any given day can be higher or lower than wheat board returns.
The secret to getting a decent market return, Jensen said, is to watch future and cash prices closely, develop good relationships with local grain buyers, minimize risk by contracting a portion of the crop each year and pay close attention to domestic and global production estimates.
Producers should also be wary of quality discounts, which can vary significantly from one buyer to the next.
“I’m used to both systems and I think the open market has been a good option for me,” Jensen said.
“If the CWB is eliminated, I think there’s going to be a learning curve on the marketing side for some (Canadian) farmers.
“The open market is a good system. You might not get the highest price all the time so when you budget and do your projections, you have to look at futures prices, contract prices and cash prices and you kind of have to expect to get a happy medium …”
Rasmussen, meanwhile, thinks the transition from single desk marketing to an open market structure will be a relatively smooth one.
He said the chance to market his own grain in Canada is a “great opportunity” that will inevitably increase profits at the Saskatchewan-based operation.
“There’s been a lot of speculation by a lot of different people about what will happen,” he said
“There’s always some fear of the unknown which is just common human nature, but marketing wheat in the open market is no different than marketing your lentils, peas or chickpeas.
“I do not consider myself a great marketer but I would much rather do it myself.”
Comment