Protein Question ?

[farmaholic]

Charlie: How can they heavily discount
low protein wheat when there is so much
high protein around. So I don't get
paid for my 16.5(average) but some poor
bastard gets penalized over $30 dollars
per tonne for extremely low protein.
Now there's justice for all. At a one
to one ratio, my 16.5 could blend equal
amounts of 10.5 to average 13.5! Yes
and on farm storage is free and doesn't
cost to build bins. Not being
argumentative Charlie just making a
couple of points. Thanks for the info
and input.

[charliep]

I guess it comes down to what your customer needs. To have that nice fluffy loaf of bread in the grocery, a baker needs a high quality/protein spring wheat. There are other markets for lower protein wheat but they compete with mid quality wheats at lower prices. If I look into a crystal ball, I think that areas that produce lower/protein CWRS wheat in the past are likely to switch to CPS/CWRW wheat or heavan forbid, more incentive to grow barley in the future. The pain of not hitting the quality/protein specifications will be greater so the decisions about what crops to grow will be clearer.

One thing that is interesting is to go over the past 10 year CWB final payment protein spreads. There has been extreme variability even under single desk. The only difference in the new world is you have more decision making ability and will see the spreads directly in your prices and not final payments.

[charliep]

On your comment on blending, putting a 16.5 and 11.5 protein doesn't work so well as the other properties of the wheat maybe quite different. You can blend a 13 protein with a 14 to come with 13.5 but not such a good mix to go wider.

Example. You may have 15 plus protein because the crop was slightly drought stress and overall kernel is slightly smaller/protein higher. Your 12.5 minus protein may have had perfect growing conditions and a nice plump kernel. These two samples will vary in terms of kernel plumpness/ability to process as well as other quality characturistics/attributes.

[farmaholic]

Charlie: I agree, the protein premiums
varied during the CWB tenure also and
some years there wasn't much of a
premium either. But I get pissy when I
don't get paid for trying to add value
to what I produce. 60 cent/lb.
nitrogen. I try to put enough on to
ensure a decent chance at average(13.5)
protein, if mother nature enhances or
detracts the chances there is nothing I
can do but I done my part and am not
getting paid. Moral of the story: aim
lower.

[wd9]

So if protein was scarce agchat and you
delivered some 11.7% protein wheat, there
would be no financial impact to you? I
find this almost impossible to believe.

[charliep]

Don't know your situation/area but nitrogen is necessary for both CPS and CWRS. From what farmers tell me, you have to spend the money for nitrogen on CPS to get the yield advantage just the same as you do in CWRS to get protein.

Direct signals will maybe mean more pulses in rotations to reduce nitrogen costs. A project our area (economics) is to look at the longer term benefits of pulses in crop rotations - that is extending the view beyond the nitrogen benefit the following year to an overall benefit in 4 to 5 year crop rotation.

[hobbyfrmr]

Agchat,
No protein spread in contract. Too bad. You just
learned something to include next time
contracting wheat.
I think you will do better than the cwb on this sale.
Now, it's up to you to compare. 14 months from
now, you can compare this sale vs. the cwb final
payment.
If you think your wheat is more valuable due to
protein, then prove it.
Take your uniform bin samples to either Discovery
Labs or Sunwest labs in Saskatoon, PAY with
your own money for protein, falling number,
moisture and dockage test. Oh, and fusarium too.
Now you have the FACTS about your wheat.
Next call around. There are flour mills in BC,
Rogers, I think, someone in Armstrong BC.
Possibly Robin Hood, or Smuckers, or whoever in
Ontario, Quebec, where our highest population
concentration is. A basic Internet search will offer
up the flour mills in Canada. Check the USA,
Bob's Red Mill in Oregon, I think, there is also one
in North Dakota, Colorado, Kansas etc. must be
some near Chicago, LA, NY etc.
if the Mississippi is low, you maybe able to rail to
these USA points with less competition from
cheaper mississippi import wheat.
Have your test result documents on hand/ in a file.
Phone these places initiate contacts, write down
the names, addresses, email addresses etc. Get
some prices see if its worthwhile. Offer to fax
them your wheat spec sheet. They may keep it on
file for future. They may blow their nose in it, who
cares!
You have to be able to order and load a rail car if
you make a sale. Start with the CGC producer car
program. its easier than railroads IMO. Do it
yourself, or hire a guy who owns an elevator.
Learn the costs of this, it will go into your asking
price.
As you get closer to making a deal, tell buyer you
will do a credit check on him because its your first
time with a new buyer. Credit check will qualify
buyer (or not) for accounts receivable insurance.
If buyer qualifies, you can sign contract and then
order rail car for buyers timeline/call.
If you can to an Internet search, operate a cell
phone, fax machine, and speak reasonably on a
telephone and jot down notes and details, then
you can sell your wheat to an end user.
After about 3 days of phoning around and some
call back conversations you will have learned 25x
more about the industry across North America
even you decide to dump it through the grates at
home.
You are now doing your own business/marketing.
You will be surprised how good it feels.
2 important rules.
1. Do what you say.
2. Do the credit check pay for the a/r insurance.

Opportunities present themselves more often
when you are looking for them. Ultimately, people
get what they deserve.

[poorboy]

What if there never has been much of a protein premium. The CWB has manipulated price so much over the years that we are not really sure what normal is!

[agchat]

hobbyfrmr Whay in the mother f____in hell is
your problem. I do not have to prove anything.
Just starting a thread on protein. GO ****
YOURSELF!!!

[bucket]

I once crossed out a clause in a grain contract and initialled it and faxed it back to the elevator. They cancelled the contract immediately, the manager called and said I could not fax contracts to them and must sign them personally at the elevator.

Finally after a few months things were back to normal but it was an eye opener.

I think it had something to do with the freight charges. I just crossed it out and made it clear that I didn't want the charges to change between crop years. Something small but it sure sent a snafu to the grain company brass.

[hobbyfrmr]

Agchat,

Take a Valium with a little vodka, then re read the
first three sentences.
Ignore the rest, I was just trying to help.
Somehow, I have mistaken this for a marketing
thread!

[wd9]

So Agchat, what you're saying is you want
the advantage both ways, premium above
13.5 but no discount below 13.5?

[agchat]

WD9
No i never said that at all. Point was if CWB can
pay a premium above, and we all hated them,
why are not these other companies? Again
jumping to conclusions about getting paid
more anyway from the rest is not the point,
waiting for another year to get all your money
is not the point. Let me ask you this . If you
had a Viterra and a Pioneer in the same town,
and was was paying a premium above, and the
other not, would you not question why. Know
lets not reason a million excuses, and try very
hard to stay focused here. A yes or no, no
blah, blah, blah. Would you not question why
one is and the other one is not? Remember
just a yes or no. That what the point of this
thread was. Find anywhere on my posts were I
mentioned getting paid above, but not getting
discounted below. How did you ever come up
with that ?

[agchat]

One more thing I may add, the question in my
original post was has anyone else who has
hauled CWRS noticed the same thing about no
premium above 13.5. Never did get a simple yes
or no. Sure did get a bunch oh blah, blah blah.
So I will point blank ask WD9, RD414, charliep,
Hopperbin, fjlip, farmaholic, hobbyfrmr,
poorboy, bucket, have any of you hauled CWRS,
and noticed no premium above 13.5% ? Thank
you.

[charliep]

Not a farmer but in the company prices I follow, there are periods this fall/early winter when there has been no premium for protein above 13.5 % (14 % in the case of the US).

Regardless, the spreads for high protein wheat have been narrow (less than 15 cents/bu for 14.5 and above).

Don't know what is in the contract you signed (most say protein spreads determined at delivery) but your price likely reflected the market that day.

Also will note in the new world prices including protein premiums will vary between companies and even between days within a company depending on what they need.

How a farmer ensures a fair spread at delivery or mitigates spread risk in contracts is a good conversation. Everything has to start with what is in the contract you signed.

Alberta Agriculture will be doing a series of meetings between January 22 and February 14. One of the major topics will be protein spreads and contracts.

[URL="http://www1.agric.gov.ab.ca/$Department/deptdocs.nsf/all/sis14099/$FILE/open_markets_poster.pdf"]Meeting[/URL]