Who is ianben?Why don't we market?

[ianben]

Hi everyone
I thought perhaps I should introduce myself. Sorry pressed the wrong button again.

I live 10 miles from the port of Liverpool, 25 milion people live within 1hours drive of the farm. I farm 600 arable acres with my brother. We grow feed wheat, feed/malt barley,osr what you call canola, all fall seeded. Sometimes we grow peas and flax spring seeded. We grow 15 acres of potatoes.

Last year our 250 acres winter wheat averaged 4 tonnes/acre but was sprayed 2or3 times for weeds 2or3 times with insecticide 1 to shorten it and 4or5 times with fungicide and had 3 fertilizer aplications totaling 200N 60P 90K.
We recieve a cash subsidy of approx £90 per acre so long as we fallow 10% of our acreage and fill in all the right forms.

Wheat from the combine was worth £57/tonne at 15% moisture 72kg/hl. and is worth £73 today. The best prices we ever got was £140 in 94 and £131 in 95.

This fall we have only managed to seed 100 acres wheat and 100 acres canola due to incessant rain. My neighbour recorded rain in his gauge EVERY DAY from 28 Sept to 18 Dec. It varies around the country but they estimate wheat area is 20% down and some crops forced in or flooded look very sick.
Since christmas it has been a little better and a further 5% has been seeded, We seeded 15 acres on 15 Jan but it has been wet again since so these crops will not yield well.

Unseeded acres will mostly go to barley
Some to beans and peas for feed due to bone meal ban. 1 March is the ideal seeding date for these crops here. So if the weather delays us till April some will switch to spring canola or flax.
We used to recieve a higher acreage
payment on canola and flax. Without this spring sown canola and flax are non starters in normal conditions.

It is getting late again so I will leave marketing for now.
Ian

[ianben]

Hi everyone
Why don't we market because we just produce and sell.There is a lot more to marketing than that. It is about providing what the customer wants.
He likes STABLE prices.
He likes regular supplies.
At the present time no farmer or any other organization is able to provide this.
We need HELP!!!even the CWB.
The problem was,in my view communication.
How due you tell everyone in the world the price and when and how much to sell.

Problem solved www.dowemarket.com.

BEFORE we sell we all click on this site, run by farmers if we are quick,and get a suggested price and quantity we should MARKET.
We take advice on most other things we do , fert sprays varieties, why not marketing??
Goodnight Ian

[charliep]

You mentioned changes to the EU farm program that make oilseed crops like canola and flaxseed less desireable. What are the changes and how have they impacted your farm?

[ianben]

Hi Everyone
As you see I am just an ordinary farmer, not someone trying to sell you a web-site or anything else.
I am just a guy who thought he saw the future back in August98 at a meeting on the pig crisis hitting that sector back then.I think you had one also?
Well our NFU set up this meeting and invited speakers from supermarkets banks importers and my friend who owns an abatoir. That is why I went I have no experience with pigs.
It was awful the room was full of desparate people going broke.
The guy from the NFU opened the meeting and said. We all know why we are here the market is over produced by 20% and prices have crashed.
The guy from the supermarket spoke first.
He explained why when the market for live pigs had dropped by over50%. They had only reduced pork on the shelf by 10%.
Our customers like STABLE prices. We will not sell ANY MORE pork if we reduce prices futher we do not think the current price is sustainable and WHENEVER we increase prices we have a DROP in sales.
The pig producers were desparate they did not listen. They called him a racketeer.
The bank was next.
He offered to bend over backwards to restruture loans.
One young couple who had just borrowed loads of money to produce happy pigs at a small premium over market said " You told us to add value. You said we had a sound proposition. Now we will be in dept for the rest of our lives" and CRIED.
The importer was next.
He explained he could not find a supplier in UK, as he only wanted hind legs to produce gammon. Denmark was happy to supply him, but he too only paid a premium over market as volatile prices left his business vulerable if he fixed them. The Danes and the Dutch are loosing money on every pig too he said

The pig producers were desparate they did not listen. They called him a traitor.

My friend was last.
He asked them to send him less pigs. The market is over supplied by 20% I am have great difficulty finding buyers.
A producer stood up.
I am sorry but next week I will be sending you 250 more pigs as prices have dropped every week for 6 months.
I am now loosing £10 a pig.The sooner I sell the less I loose.

I stood up and suggested they tried to reduce sales.
The pig producers were desparate they did not listen. They said it was imposible
So it has taken 2yrs, 60% have left the industy, few independant producers remain before a pig was sold for profit. A few could see no future and commited suicide.
The pig sector is not unique grain beef oilseeds we are all the same.
We must learn to co-operate and do the imposible before we get to desperate to listen.

I am sure there IS an internet based solution.

It would work like money. We dont feel the need to spend every dollar in fact we bank them.

It would be the same with grain if we had stable prices. The grain unsold would be like money in the bank perhaps even better.

As a boy on that MF780 my dad and I dreamed of a better combine with bigger tires and a better knife drive. In our wildest dreams we did not see the Case2388. You guys built the 2388 help me make this dream come true.

Ian

[TOM4CWB]

Well, maybe a 9750 so you would see green instead of Red all the time!

Just kidding, but maybe not?

I see John Deere as a forward looking group who are looking at long term prosperity, and are willing, yes to even create a rotary combine to survive!

Can we produce what the market wants, and is willing to pay for?

Have we bought expensive assets that now require more cash than returns can cover?

Can we change to become low cost producers, by restructuring?

Can working co-operatively together create efficiencies that alone would not be avaliable?

Individual freedom costs big money, can co-operation increase returns while reducing costs?

Everything on my farm is pooled, voluntarily, and this pays big dividends!

[ianben]

Hi Tom
I should have known you were green.It is not always better on the other side when you get there. Joke or not?
Lots of questions again. I can see you play the present game well. work hard and can look after yourself.
However can't you imagine a totally new game were everyone except the speculators win!!

Take a time-out and dream.

Farmers gain true marketing, price control, supply management, ability to plan with confidence, happy custormers!

Our suppliers gain because we can manage our business and plan.Perhaps to buy a 9750 every 5yrs so JD know how many to make. Farming can be bad but suppling farmers must be worse.

Customers gain. We all like to be able to budget.Finding something cheaper when you bought last week makes you feel bad. Your worry about the third world does you credit but I do believe stable prices would help them too, as most export food to pay off depts or buy oil.
If the present system is so good why are they still hungry?
They need economic aid not cheap food.

Governments would perhaps gain the most. The cost to tax payers of the present systems is huge. Each US farmer recieved $14500 I read recently. Learn to market and give this to the really poor I say.
The enviroment would gain. Green fuels need stable prices. Ed Bakers burner would sell. I do not believe we can imagine how HUGE this market would be but volatile prices kill it dead.

Game on !

How many GOOD young farmers have you got over there?
Are your children all truckers or accountants?

Regards a very pink
Ian.

[TOM4CWB]

Ian,

I believe speculators are the lubrication that actually allows the grain market to work!

Why?

When the mutual funds invest in our grain, often they spend billions in their market plays.

When a farmer knows what the costs are on his farm, then an investment in the future through hedging can be made!

What I see as the destabilizing factor, is in fact a farmer who refuses to sell when a fair price is offered!

Why?

When prices start rising, farmers many times get greedy, and cause the prices to raise more than they should. This then encourages a huge over investment in production capacity!

Now, many of the folks who got in at the high prices and started to produce the grain have high costs, therefore need to also sell the produce beforehand because of their high risk exposure!

In essence by withholding from the market we give our market share to a higher cost producer!

Now when we finally realize that no one wants our grain, it is too late, our market is gone!

Now we must drastically undercut the market to fight our way back and buy our market share back again.

This is why when the basis narrows, I sell my grain.

If I believe the price is too low, then I can become a speculator and speculate with Options by buying these insurance policies.

Now I have a minimum price and am gambling with a small amount of my resources.

The speculators invest in my farm-marketing program and allow my farm the profit it "needs" to exist without being too greedy and locking myself out of the markets I should be loyally supplying.

I have always said, you will never go broke by making a profit.

The key is knowing costs, and not being greedy but being fair with those who want our products!

I believe the customer is always right, and I believe I have an obligation to sell when my customer offers a fair price!

But what do I know, I am just a dumb farmer that has never marketed any wheat or barley in my life, the CWB told me!
Am I wrong?

[chas]

Tom4cwb: Your wrong. Anyone who would trust their living to speculators and gamlers and large grain buyers who manipulate the market up or down for profit has got to be unbalanced to say the least. Your just saying all these things so I'll write to you. I would be willing to bet that if canola was under the CWB we would average a better price over a five year period for it then we would on the open market. None of you producers mention if you export canola yourselves on the open market. If not why not. Chas

[TOM4CWB]

Ian,

Chas thinks I am mentally unbalanced, what do you think?

I find it interesting that Chas brings Canola into this picture.

1. I deal with co-operative based buyers like Agpro, CanAmera, Agricore, and therefore am directly involved with ownership and exporting my product through working with other like minded farmers, BY CHOICE, and enjoy doing this business.

2. Sometimes speculators do drive the Canola price lower than what we would consider to be a "fair" price. But in reverse sometimes these same speculators push the Canola price higher than what I would consider reasonable considering all conditions equally.

Now I like this system because no one holds a gun to my head and forces me to sell my Canola.

When prices are lower than what is "fair" guess what, I don't sell!

When prices have been driven up by speculation higher than they should be, then presto, I get to farm the speculator!

The Domestic Canola Crushers have tried for years to get Canola under the CWB because they know they would pay less for the seed they bought if they didn't have to compete for the Canola through the export market. I have heard them say this is unfair for making them compete!

I choose to do business equally with both, and keep both in business. Competition in selling Canola increases returns and is the single most important profit provider and cash flow managment tool on my farm.

Why am I unstable for doing business this way?

[ValueChainFX]

My goodness it is so hard not to say anything as I read the comments. You already know what I think I am sure, but here goes again! The hard working guy should be totally prepared to look after his own business in the best way that he can! I do believe that to stay alive you can not do that by yourself. (You must remain focused on your CORE business) I recieve e mails daily from farm folks that can get as far as the processors front door and then they have no control from there.

Maybe just maybe a part of your business should be a part of a group that distributes the income fairly throughout the group! Has marketers, producers, shippers, retailors, wholesalers etc. holding a stake in the out come. Maybe just maybe, a long term customer base may want to be a part of this group so they could have a stable price. Oh my, loyalty, honesty, trust, cooperation, effectiveness, perserverance, team work almost think it would change the way things are done!

Why spit into the wind, maybe there is something out there that can help solve some of the challenges we have???

[ianben]

Hi Tom
I do not think you are unbalanced,in the present market your stradegy works to your best advantage,and the changes you suggest may improve your position.

Will it produce what we all want a future for the family farm?

I do not believe tweaking the present system will be enough to encouage bright young people to join us.
The capital sums now required to run a viable grain farm are so huge there needs to be a bottom line below which prices cannot drop.Otherwise young people will not have the confidence to borrow money, asumming the banks will lend it them, to join our industry.

Who can blame them when just bad timing can wipe them out.
I just want to put a floor in the market so we dont have falls of 50-100% for just a few percent of over production.Something to stop the position which occurs when we know to sell will drive down price for all, but to sell will be best for me as an individual.

Given that choice we all sell and produce the inevitable crash.

I maintain the presents systems encourage this. As the more volatile the market the greater the need for futures.
I believe the market for stable priced grain is vast. A green fuel,a marketers dream, but it needs a stable price BEFORE people will invest in a boiler to burn it.
Are your young people becoming farmers in enough numbers to contiue our farming traditions? I can't see them over here. It is the next generation who are leaving our industry to pay their morgage, not the old guys like me.
So whats your solution Tom?

Regards Ian

[chas]

Tom4CWB I am sorry about calling you unbalanced. You gentlemen are quit a bit more diplomatic in expressing a view point. I get emotional about (no value added) middlemen in this world of business that make more money than the producer of a commodity does. When cooperation amongst farmers could gain that profit and stablize price and supply. I'am thinking of a stable industry where are young people can farm and add quailty of life to our rural communties. Quality of life is destroying itself with every farm family that leaves the industry. Chas

[chas]

No one answered my question whether they export their canola themselves. Everyone wants freedom to export wheat and barley across the border whose doing it with canola it's on the open market already. Chas

[AppMan]

I could be exporting Canola at this time, if only I could grow it. The GMO contamination from pollen drift, wind and bees, makes it impossible for me to gaurantee GMO free. My markets demand GMO free and I can no longer gaurantee GMO free.

I do export wheat directly to Europe by the can, however the cost of the CWB buybacks is going to put me in the poorhouse and make the best part of my farming operation un-viable.

AppMan

[charliep]

There is relatively good trade across the US border depending on market conditions. Manitoba farmers have sold/shipped canola to Velva, N. Dakota (there may be other plants/I am still not sure whether open or switched to sunflowers). US farmers also ship canola into S. Manitoba - again depending on pricing relationships. Look in the CGC website under grain stats weekly for volumes.