Grain Marketing Consultant

[TOM4CWB]

Charlie;

I know you have worked both sides of this situation, Gov. and private, and you and I both know many consultants who have lost everything trying... in good faith, working to be good intellegence for farmers in the marketing field in western Canada.

I only want Digger to know what sand trap the consultation field is... and to be prepared to encounter the worst.

If there were good profit margins in the Ag industry... we could afford more marketing help... or would it just be we would not need marketing help... you choose!

Very good friends I have known who worked very hard to succeed in this business...

Be honest Charlie; how many do you know can make a full time business of being a marketing consultant, without subsidising income from some other source...(buying grain, trading futures, farming... etc.)?

[charliep]

No problem. Just giving you a hard time.

You are right about it not being an easy road to hoe for the consulting industry. Success stories have come under the following models.

1) More complete financial planning services. I still would not provide full scale market advice recommendations without a full understanding of the business including its business plan/objectives, financial situation and risk taking ability. A market plan has to bring in things like crop insurance, Super Nisa, etc. As an example, I would recommend forward pricing this spring if some has already not been done. If a farm manager tells me they won't because they might not get a crop (things are better this spring but the risk is there), my next question is do you have crop insurance? The risk of drought is a lot bigger than the decision to price 25 % of your new crop. The farmer also has the protection of the variable price benefit (first 10 % price change is their risk). If the issue is a weather market, then I would ask where they think the drought is likely to occur and would they consider buying call options on some of the crops there.

2) An approach I have seen is to have the farm manager commit a certain volume to a consultant (Pro farmer USA did this). Based on the market analysis groups recommendations, the consultant was able to market a percentage of the crop during the year. The cash sale wasn't necessarily made by the consultant but there was some three way agreement with a grain company/companies up front. Success measure at the end of the year would be where the consultant based average price ended up relative to the average.

3) A variation of the above is marketing services for crop share landlords. How many of you have crop share rental agreements where you are the trigger puller on price (or the landlord is relying on you for a major part of their decision making information)? A consultant can take some of the preassure of making difficult/unbiassed marketing decision for your landlords.

[melvill]

Digger, here's another thing you might want to watch. One of the Alberta government departments, Justice and Attorney General, I think, is reviewing the act that governs the Alberta Institute of Agrologists with the idea of implementing a new act in the spring of 2004, I believe.

At that time, I think one of the changes to the act will be a requirement of membership in the AIA to do the kind of market consulting that you are considering. I would suggest you contact Graham Gilchrist at 780-632-5417 to get a little background. Graham is the immediate past Pres. of the AIA and is pretty knowledgeable on this issue.

Agrologists are basically people that are working in the field of agriculture as advisors or consultants or researchers, etc. They are required to meet certain qualifications. The AIA is their professional organization much like the org that chartered accountants or lawyers or doctors belong t. The AIA web site is at http://www.aia.ab.ca/. Have a look.

[Digger]

Thanks for the feedback. I really do appreciate it.

I don't think anyone is going to "give only good market advice" 100% of the time. I like your curling analogy Charlie. I view it as being more of a partner with a producer trying to maximize his returns and reduce his risk via a well thought out grain business plan. I will go back to what I said in my first posting, "consider all the time, attention to detail and money that goes into growing the crop vs how much of the same is afforded the selling/marketing of that same crop".

I don't think that farmers are uneducated on markets etc etc or too stupid. In fact I think they are more aware of these things then ever before. There is more marketing information available now than ever in history, right at our fingertips. Does this make it any easier? I think it makes tougher.

[TOM4CWB]

Digger;

I believe marketing, just like accounting, growing grain, working with people, being a successful business owner;

All of these have skill involved... but 9 times out of 10... the person who is dedicated and gifted in the area required for success will do well all other things being equal.

Otherwise a person can do well, if they know where they are not gifted... and are smart enough to know their limitations... and get some help.

When I know I need help... then I am ready to pay for that help.

But if I am innovative... I will learn from my consultant... and in time will not need my teacher any more!

Therefore if a marketing consultant does an excellent job... this person will work right out of the job that he created... and must then look for new clients... a never ending job.

Have fun Digger!