Marketing Freedom

[farmaholic]

No chuckChuck, the US buyers are buying durum at a loss. :-)

[highwayman]

Chuckles, 4 amber durum brings 10/bushel in Canada but won't bring 14 US in the states. American mills offering 14- 16 US are quite stringent on those specific requirements but it sure is nice to have the option isn't it :-)

[zeefarmer]

In some cases highwayman, it does. Ours and quite a few others in the area graded a 4 or even 5 CWAD, because of green frost. Had over 75 HVK, 12 px and falling numbers over 300. Still met US milling specs. Guess where it ended up going

[highwayman]

Good to hear. Our 4 durum was hammered by hail so didn't meet the American market milling requirements. Managed to squeak a 3 13 px out of it though so really can't complain. Shipped our first 30 cars of 80 hvk south a bit ago and very happy with the way things went. Hope to ship the next 40 south by middle of feb. American buyers have been very accommodating thus far

[jdepape]

ChuckChuck:
No one said the market was working fine. But there are solutions.

Having different bids at the same time is not a sign the market is broken. I know some firms were caught short high quality durum and needed to cover. Others weren't. A lot of the high priced durum bids we've seen were to cover those shorts - the end user wasn't paying that much. I think we saw the same thing to a degree in CWRS.

You remind me of a old farmer I met years ago. He was complaining about grain prices, particularly the fact that one elevator was paying 0.30/bu less than the other. He said "he's trying to rip me off!".

I asked what he would think if the two elevators had the same price.

After a second or two he said "Then they'd BOTH be trying to rip me off!

Is that the way you think chuckChuck?

[jdepape]

As for the question why some prices are higher in the US than in Canada, I gave one reason already - the short that needs to cover will pay more.

The other reason is actually a question - who's selling durum in Canada when there's a buyer in the US paying so much more?

If arbitrage is the market activity that forces prices together, then it REQUIRES marketers to actually actively arbitrage. What that means is to (1) identify the best price and terms and (2) then sell at that better price. The higher bidder will get satisfied and lower his price for future business and the lower bidder will not buy anything so will raise his price (if he needs it).

Instead of complaining about these price differentials, it's your responsibility - and opportunity - to take advantage of them.

Unless of course, there's something else impeding the sale to the U.S.