Potential June rains...

[dave4441]

I was about to ask same question. Would be interesting to see breakdown on the math from 56 cents a lb India to the farm. Please include ocean frt, insurance, brokerage, transloading, rail, edc costs, grading costs, cleaning, production risk, etc.

Start with an accurate usd price that will trade today in India in usd terms. Then work back to grower.

[saskcanfarmer]

David - Yoy know as well as I do that margins are massive to the exporter in lentils. Don't try to act otherwise please.

[dave4441]

Margins have been decent on sale by sale basis. But you can sell 56 cents cad new crop reds and ocean frt alone is 6 cents/lb cad. Plus plus plus lots of other costs. To say someone could pay 50 today is complete hogwash.

[saskcanfarmer]

Ok I can't disagree with that. Mustard, Lentils and Canaryseed have the biggest margins out of any crop we grow in terms of the exporter. I can't garuntee that. There is room to move upward from 43c but in the same breath that's a hell of a price. Almost foolish to hold against that.

[bucket]

Ok dave4441. What's the right bid?

And considering the mess in India and the fact they could buy the entire canadian crop that's not in the bin yet where do you think it's going? Lower.?


3 bucks a bushel to get to India isn't a bad margin is it?

[dave4441]

$3/bu is the cost to move the container from Vancouver to India. Rail is $50/mt. Cleaning and elevation should be 50-65 with production values risk. Edc cost, interest and brokerage all add up.

Total cost is about cad 12 cents per lb from farm to Indian port. India has stopped buying reds as they have a lot already bought. Turkey has bought zero (or very little) and started there own harvest. All indications are that it is a good crop. We dont know 100% but it looks strong and the fact that they are not a buyer means it is probably pretty good. We need Turkish demand for reds this year if we grow a average crop. Remember we had above average crop last year and 100s of 1000s of acres where zero at Moose Jaw. Plus we added a million acres of reds this year. Anyone who says they know where red price is headed is totally guessing.

Price depends on Canadian production. We have 3 million acres of reds planted. 1 million more then last year. India will not buy everything we grow if we had a average crop. Need some time to know what we will grow and it is anybodies guess.

You can sell today, new crop at cad 56/lb delivered to Indian port. Its about 10 cents too high. Old crop if you ship now you will get that number. But not enough product available to trade to build much of a program. Price could be 100 cents pet pound in India and if CDN trade can't buy any volumen who cares.

[sumdumguy]

Ocean freight alone is 6 cents. Processing 3.5 cents, plus 1-2 cents container P&D, container freight to Montreal - 4.5 cents - receivable insurance, grading costs, brokerage fees at overseas 1-2%, then office staff, office expenses. After all those these costs, what do you think the bid should be?

[sumdumguy]

Oops, forgot ocean freight insurance.b

[dave4441]

Should have said "you can't sell new crop at 56".

And the problem is that India can not buy the whole CDN crop at a average crop across Alberta and sask. Their next harvest is Feb for reds. So we have half of year of consumption to sell into and then that Indian domestic crop will determine the red MKT in Canada.

[riders2010]

Dave worked at zellers. Lowest price for farmers is the law that way he can have more of a free be with his buyer pals