Had a Chat with Canola council of Canada Yesterday in Brandon!

[agstar77]

Unfortunately this drive to increased production has come at price. Decreased rotations and over production. Farmers are not heeding world price signals to the detriment to our environment and the sustainability of farming. Large producer groups such as the Canola growers are moving in a self serving direction without regard to these issues. Its the Mantra of increased production is good at any price. Has increased production and more value added crushing slowed the erosion of rural Sask? These are just a few points to ponder in the bigger picture.

[freewheat]

Also remember that canola average yields have been trending higher. Why? Because of seed improvements? NO! Because the non traditional areas have been blessed with better than long term average rainfall.

Kindersley is not a place you would expect to see canola yielding 60 bushels an acre.

If they want to assume this will always be the case, and that rain will always fall in normally borderline farming areas, fine.

But IMO, if they think we are going to grow 52 bushel average crops over the whole of western Canada, based on seed and a few agronomic benefits, they are mistaken.

It still takes good weather to get there.

We have been collectively riding a wave of half decent moisture falling from the sky, and relatively cooler summers than typical.

And now, with the seed guys pricing themselves out of sales, where an average crop of canola just fails to pay off well enough to justify seed costs, they are shooting themselves in the head.

Don't even get me started on the new disease and insect problems caused by pathetic crop rotations. Not to mention the ones that inevitably are yet to come...

[charliep]

Can you help me understand something.

I am going to start with the western Canadian farmers are good managers. You can put the range in but for the most part, they manage a $2 to $5 million asset business. A major part of this is managing risk in a very uncertain world.

SK3 tells us canola doesn't provide a profitable value proposition in rotations. agstar/freewheat tells me managers are pushing rotations - a farmer decision based on ___ (someone can fill in the blanks). Help me understand.

Sorry for being a numbers guys. Deliveries 7.2 million tonnes, up from 6.6 last year/above other years pace. Exports to date 3.7 million tonnes, up 13 % from 2014. Crush similar pace but will pick as LDC Yorkton comes back on line/Camrose opens. Edmonton May delivery canola $10.20/bu using a $4 over July basis. Markets are going higher. Basis? Place your bets/take your chances.

[farmaholic]

SF3, how the hell do you expect them to keep a $10.00 ceiling on canola prices? Everytime there is a move higher in futures they widen their basis to hold the price somewhere under $10.00. Then everyone's magic number is always $10.00 only attainable using GPOs or TPAs!!!!!!! Fricking brilliant says Dr. Evil from the Graincos ***** shagging me.

LOL... (insert Dr. Evil's sinister laugh)

[farmaholic]

.......or as Hopper pointed out, flip a month ahead and pocket the spread.

[vvalk]

sold canola this morning into lethbridge for march delivery at $10.32.
will probably going higher yet
if your mad about basis, lock it in and take that out of the equation. Then if futures go up, you get it all.

[farmaholic]

I hear you vvalk, I fully understand your point. But, how many delivery options do you have once you've "sigh"ned that basis contract? Or do you really only have one viable option before the possible gain gets eaten up by the distance(freight) to the next option?

[Hopperbin]

Farmaholic I think its eat the spread.

[farmaholic]

Ooooookay......

[MBgrower]

Canola council just like another level of government, self serving bureaucrats protecting and padding high paid salaries with little work to do, other than collecting farmer check off dollars.. The graincos sell and market and crush my canola. The seed cos develop seed and improve genetics. Too many hands in the pot, time to close the doors at that joint.

[Hamloc]

Charlie the last western producer had an article on costs of production of all crops. Canola was 290 an acre with land cost at 50 dollars an acre and no labor or machinery costs. In my area land costs would be more realistically 75 so with all costs included cost per acre would be closer to 360. My average yield on canola is 44 bushels per acre, going to have to have a good year to make money on canola. Malt barley,CPS wheat and yellow peas look better with lower input cost.
When the canola council said 2 year rotations were acceptable it was obvious they had lost their way.

[charliep]

Just to highlight, the decision about what to grown is something every farm manager does. Most farmers I know are very aware of the impact and risk factors around a canola wheat canola wheat rotation. Perhaps the point is to warm up a calculator and work the numbers for your business.