Differences between canola and wheat marketing

[ianben]

Is canola marketing different because crushers can buy all grades of canola and are able to give price which relates to the goods delivered.
Crushers market oil of all grades and are willing to invest in finding new uses for their /our products as we will both prosper.

Wheat/barley customers are very specific in their requirement ie milling wheat must make good bread and barley good malt.Off spec material has no value to them and is of no interest.

Feedindustry aims to use less grain /lb liveweight gain with better breeding etc so again using more grain is not on their agenda.

So who is helping find new markets for grain?

JD spend $2,000,000/DAY on R&D.

What new uses could be found for a raw material like wheat with investment like this?

Biodegradable plastics from a renwable source,
Expanded starch packaging/ polystrene replacer which is again biodegradable.
Ethanol in petrol are all possible.
I am sure there are many other uses grains could be put to with the right research and markerting body.

How do we get someone to be the equivalent of the crusher for grain.

Someone who is looking to maximise the quantity sold and gain the premiums available for the right quality and activly seek out new uses and markets for for our products.

Anyone think they can do this as an individual?

[TOM4CWB]

Ianben;

Marketing is a state of mind... value adding is hard work... and takes innovation... creates risk... which is why many would just dump the wheat down the pit at the Silo...

Take the increase in wheat stocks China is supposed to have... some 40mmt more than before... how could this happen?

1.3 billion people in China'

If each person has one 20KG sack of wheat in the pantry...

26mmt of wheat in the kitchens of Chinese homes

Next question... what is a fair value for wheat?

When would you be satisfied with the price of wheat... for that matter are you happy with the price of Canola now?

It is all a matter of perspective... and what we are willing to be satisfied with... isn't it?

[charliep]

I don't know if the differences are all that great between the two crops.

Neither marketing system is 100 % free of controversy. Both have invested in research and development. A difference here is canola has been more private industry/farmer driven whereas wheat has relied on the CWB/groups within the Canadian Grain Commission (Canadian International Grains Institute/Grain research lab).

Wheat in some sense is more customer driven with needs ranging from bread wheat (hard red spring) to noodle wheat (prairie spring) to cookie wheat (soft white) to high gluten blending wheat (extra strong) to pasta wheat (durum) to feed wheat. Industrial uses/other that are either being done or looked at include starch, ethanol, etc.

The major difference I see between these two crops is choice of both market and pricing alternatives. The ability of farmers to market canola as they see fit (based on their profit and cashflow needs) versus the one size/marketing plan fits all creates tension on the wheat side.

[ianben]

Article in FW states when oil is$39/barrel crops for fuel become economic.

Would seem to me that grain in middle America with high transport costs to port must be economic below this.

Industrial uses do not appear to be happening big time.

Why?

[charliep]

I wouldn't count out biofuels in North America. Ethanola is the highest growth source of demand for corn south of US (subsidy/environment push is making it happen). Saskatchewan and Manitoba governments have major pushes for ethanol (hopefully some comments from residents there). Its been talked about in Alberta for a long time. Two gas stations use ethanol blending as a major portion of their product promotion.

Bio diesel is even more interesting. Research is indicating improved lubricity (hoped spelled right) that benefits/extends life/improves efficiency of diesel engines when blended. More work to be done but looks very promising. Again, oil companies are slow to recognize (like selling ice cubes to eskimos) but will likely catch.

If these areas catch, our problem will not be as much price as ability to supply markets.

[ianben]

Same over here Charlie,

Lots of ideas, the expanded polystrene replacer is apparently economic today and using 40/50 tonnes wheat/week.

Still think investment in R&D and publicizing good ideas will be needed to make a real difference

Also as a farmer I would like someone independant to give me a fair value for my produce in these products.

I find it nearly impossible to find out what a tonne of wheat etc will be worth when oil is $39/barrel.

Do you have any info on the prices they use when calculating crops for non food use.

I would like to see my market report have a column which valued my wheat/ canola for energy useing oil/gas even though the market may not exist.

Would knowing this ecourage both farmers and energy buyers to get involved.