Soybean protein discounts on the way

[MBgrower]

Soybean protein discounts on the way in W. Canada

You've got to give credit to Canadian graincos, they always find a new way to drive down the price of our commodities. Apparently steep protein discounts will be introduced soon on beans containing less than 33% protein . Ave protein levels in MB and Sk were especially low last year due to the dry growing conditions. Well, there goes another profitable crop.

[bucket]

Yup that already started here....

No one mentioned it when selling seed interestingly enough....nor will grain cos entertain oil premium's for canola...

The very least they could do is provide free vaseline.

[SASKFARMER3]

Ah oh Canada were if they ever give you a inch they F$&k you for life once they figure it out.

We’re screwed on everything from bullshit grades to no real showing what our grain is being sold for

[bgmb]

Wow what a racket. never an oil prem on canola or beans but a protien discount on beans go **** yourself.

[SASKFARMER3]

I just find it funny how every thing is follow the money in Canada. It the Farmers share is not.

Pay pay pay you stupid fools.

[bucket]

But once again as money is spent on R&D ....the producer reps ignore the marketing issues.

Sask pulse is happy to take the checkoff but protein and oil is my problem....

Are they developing the new varieties with shorter season with higher protein and oil content ?

[Agvocate]

Physical beans are sold with a protein guarantee to the end use customer, which for the most part is China. The min is 33 or 34 with discounts below that and at a certain level the buyer can outright reject it. Up until this growing season one would have to assume exporters were making the spec on beans. A year with really low protein and bean acres expanding into fringe growing regions I would wager a bet a few exporters got caught guaranteeing the buyer something but not having the same commitment from the seller (farmer). I don't really see it as an issue, imagine protein spreads move with the market on beans the same way they do on wheat. Will depend on the crop, little variance and high protein, small discounts and small premiums. Very little protein and they widen out substantially. Agree there needs to be premiums as well as discounts if you want 35 pro from one guy to blend off 31 from another one guys discount is the other guys premium. That will ultimately be set by the grower as to their willingness to sell at those spreads. It should drive better seeding decisions as well, if you can only grow 30 pro beans, most will find another crop until seed technology gets to the point you can grow better in your area. To wrap the beans up I am fine if there are transparent protein spreads above and below a baseline when I am forward contracting. I am not on board with selling just a 2 Canada soybean and not knowing what the spreads is till it's delivered. I should be able to call and ask what a 33 or 32 pro is worth and contract that protein when I sell. That way I know spreads can still change but I can target the band that is typical for my farm, or make a sale based on my feel of where spreads may go.

As for the oil premiums on canola, I agree there should be some. But if you are ok with premiums you have to be ok with discounts and the whole scenario above. A lot of growers like canola b/c it is always a 1 Canada and its one of the few things grown that are generic and you know the price you sell is what you get when you deliver...

[Klause]

Physical beans are sold with a protein guarantee to the end use customer, which for the most part is China. The min is 33 or 34 with discounts below that and at a certain level the buyer can outright reject it. Up until this growing season one would have to assume exporters were making the spec on beans. A year with really low protein and bean acres expanding into fringe growing regions I would wager a bet a few exporters got caught guaranteeing the buyer something but not having the same commitment from the seller (farmer). I don't really see it as an issue, imagine protein spreads move with the market on beans the same way they do on wheat. Will depend on the crop, little variance and high protein, small discounts and small premiums. Very little protein and they widen out substantially. Agree there needs to be premiums as well as discounts if you want 35 pro from one guy to blend off 31 from another one guys discount is the other guys premium. That will ultimately be set by the grower as to their willingness to sell at those spreads. It should drive better seeding decisions as well, if you can only grow 30 pro beans, most will find another crop until seed technology gets to the point you can grow better in your area. To wrap the beans up I am fine if there are transparent protein spreads above and below a baseline when I am forward contracting. I am not on board with selling just a 2 Canada soybean and not knowing what the spreads is till it's delivered. I should be able to call and ask what a 33 or 32 pro is worth and contract that protein when I sell. That way I know spreads can still change but I can target the band that is typical for my farm, or make a sale based on my feel of where spreads may go.

As for the oil premiums on canola, I agree there should be some. But if you are ok with premiums you have to be ok with discounts and the whole scenario above. A lot of growers like canola b/c it is always a 1 Canada and its one of the few things grown that are generic and you know the price you sell is what you get when you deliver...

All horseshit.



You realize the world's largest producer of beans has no discounts or grading.

Actually neither does Brazil or the US.


Even wheat... We're the only country to play games with grading and protein on crops every year.


Argentinian are getting $7 CAD for Malt.


We're getting $4.xx


Canola on Matiff is $545 CAD.



Btw Argentina switched to pricing theirs off Matiff because it better reflects world prices than Winnipeg.

[bucket]

Canola pricing is done by TPAs mostly anyways....the Winnipeg market is just a feel good thing for the families to say there is an open market....

Everything is correlated back to soybean prices here....

We really are ****ed.

North Dakota farmers with their price guarantee are 50 bucks an acre more revenue....how do you compete with that?

Every bushel ....volume can't make it up like some think here.

[Agvocate]

Not sure what facts are horseshit. All beans are sold with protein guarantee, regardless of which country sells them. There are multiple ways of managing that. Everyone can set their price for the lowest possible protein and move on. But if you want to set yourself aside from your neighbour and grow a better quality product do you want to be paid for it? Or just dump it all in a pool and spread it out to everyone? I think we used to have that.

If you think no country has spreads off a base grade sell some wheat to the states. There is discounts for damage, FN, vomi, moisture, protein etc.

If you like the price for malt in Argentina, deliver it to Argentina. If you like the value of the Matif canola, sell your canola delivered to Europe.

The overarching point I am making is that if the way you sell beans from your farm is changing, figure out why and how it works for your operation. Talk to the elevator manager and give them your feedback on it. If its going to change anyway understand the other partners in the supply chain and try to find advantages to it and stay ahead of the curb.

Or you can rant on and on about taking it in the hoop, make your vaseline comments, bitch about everything and offer no constructive solution other than something is worth more elsewhere so we must be getting F'ed over.

The system may be dated in areas and a far cry from perfect, but the more you understand it the better you are going to return a profit to your business.

[Klause]

Not sure what facts are horseshit. All beans are sold with protein guarantee, regardless of which country sells them. There are multiple ways of managing that. Everyone can set their price for the lowest possible protein and move on. But if you want to set yourself aside from your neighbour and grow a better quality product do you want to be paid for it? Or just dump it all in a pool and spread it out to everyone? I think we used to have that.

If you think no country has spreads off a base grade sell some wheat to the states. There is discounts for damage, FN, vomi, moisture, protein etc.

If you like the price for malt in Argentina, deliver it to Argentina. If you like the value of the Matif canola, sell your canola delivered to Europe.

The overarching point I am making is that if the way you sell beans from your farm is changing, figure out why and how it works for your operation. Talk to the elevator manager and give them your feedback on it. If its going to change anyway understand the other partners in the supply chain and try to find advantages to it and stay ahead of the curb.

Or you can rant on and on about taking it in the hoop, make your vaseline comments, bitch about everything and offer no constructive solution other than something is worth more elsewhere so we must be getting F'ed over.

The system may be dated in areas and a far cry from perfect, but the more you understand it the better you are going to return a profit to your business.

We don't have a quality product. You don't get it do you...


Our beans suck compared to hot sub tropical countries.


We will never get a premium for beans only discounts.



Just like wheat...

The discounts are far sharper than the premiums and on top of that in years with high protein we have 0 premiums or next to it and on top of that our prices are lower than anybody else's.


I've sold wheat and oats to the US.

Minimum specs you meet and you get the listed price.


Specs easy to meet.

[Klause]

Cost of production on canola is 17 bpa in the southern hemisphere.


It's close to double that here.


You've seen Mallee's #'s...

[Rareearth]

I see the forum as information sharing and transfer.
Thanks Klause and others

It’s good to here both side Agvocate, it would be nice to here more of your perspectives

[Agvocate]

I don't want to get too far off topic, and I don't disagree with the cost of production and sales value in other areas. From a strictly business sense then if you believe you have the poorest quality and lowest price, and your land values are at or near their all time high's, the black and white answer is simple. You sell what you have jump on a plane and buy in Argentina. Clearly it isn't that straight forward but straight economics suggest that is the play. Between family, language, safety I am happy making what I do here and not making that jump.

To come full circle and back to the original point, if this is where you are and this is where you are going to stay, you have to get the most out of the system we have. If I am never going to move to south america or Europe and farm there it really doesn't matter what the cost of production or the sales value of the product is there.

It's important to understand it, back it off and recognize changes in grain flows and farming practices in more than just your back yard so you can make the best choice for your operation. The topic after all was soybean discounts. I am just throwing out how I would look at it to make sure I make the right choice for the bottom line in my farm and that I am the most prepared for the change.

[bucket]

Agvocate.

It isn't that we are growing poor quality.....it's that we are not paid for quality....

Best quality durum and lentil crops and they are on a 50 percent sale....no one wants them.

No value in growing 1cwad....we are getting paid for a 3cwad.

No protein premiums on durum. Shit durum from 2016 is closing in on the base grade of durum...