LDM farming

[Choice2U]

I'd like to hear some perspectives on Louis Dreyfus buying or leasing farmland, paying custom operators and supplying their plant with their own canola. I don't fault them for it but I do not like the thought of competing against a customer (me being the customer). Also, what kind of rotation are they running? If they are running with canola every two years, they will probably be in my bad books.

[westsider]

not sure why they would do this? if they offer a good canola program with good service there is no reason they should not be getting just as much canola if they did not grow it themselves.


hear in central Alberta i dont have a LDM close so have not heard the rumors


I for one would be interested in finding out if what you say is true CHOICE2U. if it is, LDM is gonna have to start buying alot more land as i am sure growers will be leaning to not deliver to them.

[Saskabush]

I have been a big customer of LDM in the
past but will not be delivering anymore
canola to their crush plant now that i
have to compete against them. There are
lots of other customers out there with competitive canola bids. I do not agree
with them competing with their customers
which i guess won't be a problem any
longer as i won't be customer of theirs.
Some corporate farms we can do nothing
about but if we all boycott ldm by not
doing business with them, then maybe we
can at least keep one corporate farm
away.

And yes they are growing canola on
canola on canola stubble.

[wd9]

They won't farm because there is no
money in it, just buy the service. There
is in every other stage of the food
chain. Should tell you something.

So are you saying only real farmers can
grow canola canola canola wheat canola
canola canola.....

Do farmers have this mysterious "right"
to be the only ones who can farm?

[hobbyfrmr]

I agree with wd9. LDM is probably just cleaning
up some arrears with farmers who owe them. It's
the kinder gentler method instead of taking the
farmer to collections or court.
Also agreed they will buy the service because
there is not much money in farming. If there was
proper money in farming, Cargill would already
own the farmers/land. Why do all that work, take
all that risk, when you can buy it for very small
margins after it has been produced and safely
stored? Logic.

[Saskabush]

No, LDM is actually taking land away
from local farmers by offering higher
rents, above what is being paid locally
and has also been breaking fresh land on
some of the indian reserves and having
it all custom farmed. Doesn't look like
a great crop since nothing was done on
time from seeding on but nonetheless
they will get a crop and probably make a
few bucks not nearly what the farmers
would have made farming it themselves.
I have only seen them grow canola so
far.

[hobbyfrmr]

There has to be a fly in the ointment somewhere. Maybe its a strategic alignment with One Earth? Usually there is a story behind the story.
Who is providing the planting/harvesting services? Custom work often pays better than farming the land. Guys around here do custom work to help make machinery payments. I dont see too much wrong in that.
SF3 may have some answers to this. He described something similar in previous posts. Thats where I got the broke farmer theory. Farmer owes LDM heavy, so they take control of the property, make the farmer the "manager" until they are paid in full. I suspect they will keep the farmer around to continue this pattern. Basically a career change for the farmer. LDM has to pay higher rent to get control of the property so they can recover what is owing to them? Maybe? Its a bit of a convoluted theory, but now I am curious as ever!

[uneducatedbum]

I don't think ldm would have alot of
outstanding bills with customers because
they only buy grain...unless alot of
customers have defaulted on canola
contracts.

I don't see any of these large
corporations getting into production in
the developed world, too many
regulations for labour and safety that
family farms can work around.

The only reason I could see them wanting
to do it, is to secure supply for their
crush plant...but if they crush 100000
bushels a day they need 3000 acres of
canola or 6000 acres of land for each
day of crushing plus all the storage
they would need to hold it when they
want to crush it.

[Saskabush]

It doesn't make sense for LDM to be
trying to secure canola for their crush
plant. They must be trying to make a
buck at farming. Their land is 100
miles from their crush plant on the west
side of Fort Qu'Appelle. Why would they
bother so far away?? Where is their
nearest elevator to haul wheat when they
eventually have to grow it. A company
called MFI ag is doing all the custom
work. I heard they are charging $90 per
acre for seeding spraying and combining.
Seems pretty rich.

[JDGreen]

If u can make more custom farming then perhaps it is time to exit the biz.

[sumdumguy]

All I can say is, Good Luck Louis.

[Choice2U]

I heard the same thing that Saskabush explained whereby they are paying someone to seed, spray, combine and are renting native land. I don't know if they have bought any or what. WD9 - I disagree with anyone that is growing canola/wheat/canola/wheat/etc or canola on canola on a continual basis whether it be a "farmer" or a large company. They are asking for trouble of which we will all pay for in the end. See clubroot.

[gregpet]

If its MFI Ag doing the custom work then it is more than likely the Chinese that bought the
land.

[wd9]

The beauty of vertical integration, spend
a little more to secure land and shave
some profit off crush.