Chaffmeister
This thread was getting pretty boring, thanks for your help we got a little spark added.
I think my choice of words about you being confused was wrong, you do understand the basis very well, but the problem is I am trying to simplify marketing and you are trying to make it look more complex.
So why should I be concerned with something I can’t control.
You think farmers ( I ) don’t understand basis and therefore don’t know how to market properly.
Grain companies control the basis, so the simple explanation for basis is to say they are ( the grain company’s handling and marketing cost) we also need to add transportation cost and that varies with distance to market. ( to arrive at a net price to the farmer) There is no need to confuse farmers by mentioning the part about basis they have no control over.
You said, basis contract is not a bribe.
Basis contract is a signal by the grain company to the farmer that they want to handle your grain, but because of the competition a unrealistic low basis is offered and that could be considered a bribe. ( because the real basis are hidden) Basis contracts are not transferable to other grain companies, so that also proves that the so called public price ( you are talking about goes out the window) and is not the same for every company. I know from experience the offered price to producers on any given day is not the same by all grain companies. So I say the grain company has the advantage.
We can compare this to car sales.
Car sales are advertised: You can buy this car for 0% financing and no payment for 90 days.
Clear out 2002 models for only $100.00 over factory invoice.
I think that most business people know that that the real profit is not disclosed ( hidden ) the same applies to unreasonably low basis contracts.
GPO contract, a producer has a choice to ask his price for grain, (choice to me means I have the advantage ) and I don’t care what the company does with the grain or their basis if I get my asking price. So if you are trying to help someone, then keep it as simple as possible and don’t bring up things that don’t add value only add more of a gamble that he doesn’t need.
I have no choice when I have to sell wheat and barley to the CWB and have to take what they offer. ( CWB advantage and that is “BS” and should be easy to understand)
Now the hired labour category, sorry but you keep asking for it, we need all that you suggested, excluding (management advisor) because he’s not needed. The farmer doesn’t need that extra expense and besides if you need an advisor you in the wrong business.
I suggested producer marketing systems that doesn’t keep you at the marketing table every day, so you can spend more time with your family and things you enjoy in life.
It is not modeled for all producers, so go for whatever turns your crank.
This thread was getting pretty boring, thanks for your help we got a little spark added.
I think my choice of words about you being confused was wrong, you do understand the basis very well, but the problem is I am trying to simplify marketing and you are trying to make it look more complex.
So why should I be concerned with something I can’t control.
You think farmers ( I ) don’t understand basis and therefore don’t know how to market properly.
Grain companies control the basis, so the simple explanation for basis is to say they are ( the grain company’s handling and marketing cost) we also need to add transportation cost and that varies with distance to market. ( to arrive at a net price to the farmer) There is no need to confuse farmers by mentioning the part about basis they have no control over.
You said, basis contract is not a bribe.
Basis contract is a signal by the grain company to the farmer that they want to handle your grain, but because of the competition a unrealistic low basis is offered and that could be considered a bribe. ( because the real basis are hidden) Basis contracts are not transferable to other grain companies, so that also proves that the so called public price ( you are talking about goes out the window) and is not the same for every company. I know from experience the offered price to producers on any given day is not the same by all grain companies. So I say the grain company has the advantage.
We can compare this to car sales.
Car sales are advertised: You can buy this car for 0% financing and no payment for 90 days.
Clear out 2002 models for only $100.00 over factory invoice.
I think that most business people know that that the real profit is not disclosed ( hidden ) the same applies to unreasonably low basis contracts.
GPO contract, a producer has a choice to ask his price for grain, (choice to me means I have the advantage ) and I don’t care what the company does with the grain or their basis if I get my asking price. So if you are trying to help someone, then keep it as simple as possible and don’t bring up things that don’t add value only add more of a gamble that he doesn’t need.
I have no choice when I have to sell wheat and barley to the CWB and have to take what they offer. ( CWB advantage and that is “BS” and should be easy to understand)
Now the hired labour category, sorry but you keep asking for it, we need all that you suggested, excluding (management advisor) because he’s not needed. The farmer doesn’t need that extra expense and besides if you need an advisor you in the wrong business.
I suggested producer marketing systems that doesn’t keep you at the marketing table every day, so you can spend more time with your family and things you enjoy in life.
It is not modeled for all producers, so go for whatever turns your crank.
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