FCC changing their tune.

[farmaholic]

If I have possession of my grain I maintain some control. One example, 2016 durum, held over, wasn't happy with $4.40 offer (and less) last year, held it and ended up with $6.75 last fall. Then there's canola. You only have to pay for the bin once and it's there to use many times over! I use it like a marketing tool like guys who like ****ing around in the futures and options market, although they have no investment.

Everyone has to figure out what works best for themselves. What I do may not suit someone else. To each their own.

[bucket]

US on farm storage 13.45 Billion bu
US off farm storage 11.24 Billion bu

https://www.agriculture.com/markets/newswire/us-crop-storage-capacity-increased-in-2017-as-supplies-grew https://www.agriculture.com/markets/newswire/us-crop-storage-capacity-increased-in-2017-as-supplies-grew

That's the entire corn crop in commercial facilities.

And since corn and soybeans are not harvested at exactly the same time the system can move grain better. ...although their crops don't have 18 segregations. ...or 8 different crops....

Let's see Canada's stats. ...

I doubt Canadian grain cos could hold a quarter of the wheat crop produced here....

[Klause]

https://www.country-guide.ca/2014/06/25/the-canadian-made-bottleneck/44191/ https://www.country-guide.ca/2014/06/25/the-canadian-made-bottleneck/44191/


Old article, and I bet we're more like 15% now because of increased production.

Commercial storage

Closer analysis of the four systems highlights a major pressure point in the Canadian system. The combined commercial elevator capacity in Canada (including port and inland) can store barely 20 per cent of our average annual production.

The U.S., by contrast, can store over 50 per cent of the crop in commercial storage, Brazil has 114 per cent storage capacity, and Australia has storage for 175 per cent of an average crop.

Instead of a system where most of the grain is in port and available for export at all times, as it is in Australia or Brazil, or even in the U.S. where half of the harvest is in commercial storage, Canada relies on just-in-time delivery from farm to port to meet export demand.

This system works only if buyers and sellers know exactly what is in on-farm bins, and if there is a co-ordinated effort to move the exact grain and grade from farm to port only when needed. Unfortunately, this pull system is exactly opposite of the push system that many farmers desire.

Canadian farmers want a system where they are able to deliver their grain whenever they want, yet in fact the commercial Canadian grain storage system can handle only a little more than 10 per cent of an average crop at any given time.

In other words, it is physically impossible in Canada for all farmers to move all their grain at harvest or in the fall period even if there was the customer demand for the multitude of grains and grades grown in any given year.

Transportation system

Even if Canadian farmers decided to deliver only to match sales, we would still be left to face the restrictions of our transportation system.

Prairie farmers cannot deliver to port other than by rail. Our limited port facilities are not designed for receiving grain by truck. So we rely on a duopoly of two private, non-competing rail lines to move all of the grain destined for export.

There really are no viable alternatives, which means in turn that there are no competitive forces to control freight costs. As a result, a revenue cap was imposed to protect farmers from excessive rail freight rates.

The U.S. by contrast has four major rail lines, so there is more competitive pricing for rail movement of grain. More importantly, there are three major river systems bisecting the major grain-growing regions in the U.S., and the publicly supported river system also controls freight costs. Furthermore, U.S. port terminals are able to handle truck traffic.

As a result, even though the distances from farm to salt water are roughly similar, the U.S. system is much more efficient and cost effective than the Canadian system.

Brazil also must move grain over long distances, but freight costs are minimized by the competition between truckers. This is not to say there are not problems. Harvest-time truck lineups at port facilities have occasionally been reported up to 80 kms long. Still, Brazil manages to move almost three times as much by truck in eight months compared to what Canadian rail moves in a year.

Australia, with a much shorter haul than any of the other three nations, is in the best position, with both truck and rail capacity for moving grain from farm to port as well as having storage capacity for almost two years of harvests.

Investment

One of the most troubling comparisons may be the lack of investment going into the Canadian grain system. We are not seeing the investment in Canada that is happening in other grain-exporting countries.

For example, while CN and CP have invested roughly $2 billion a year in track upgrades, expansion, and maintenance, U.S. railroads companies invest $7 billion a year, and in Brazil, the government has pledged $30 billion over the next six years for building more storage capacity to handle the ever-increasing production in this country.

This quick comparison identifies a host of bottlenecks in the Canadian grain system other than simply a rail problem. An apt analogy of the existing Canadian system and the government’s attempt to address the problem might be a farmer who runs a class 10 combine but only has one three-ton truck hauling the grain a long distance on washed-out dirt roads to a six-inch auger filling a 1,350-bushel bin, and then blaming the lack of harvest efficiency entirely on having one truck.

Legislating more rail cars will move more grain but only until other bottlenecks in our constricted grain-handling system override this quick fix.

As farmers, we need to ask why our system has so many constraints compared to our competitors. We need to look at the Canadian grain export system in its entirety and address all the bottlenecks if we are to successfully compete in the world grain game. We need to ask not only what the government can do, but what we as farmers need to do and what we expect industry to do. It has to be a collaborative effort between all players.

[Rareearth]

We do not have a commodity exchange system that would allow sale of all grain at harvest. Soybeans and corn are different

I wouldn’t want to be forced to dump grain at world prices or at exporter offers, bad enough as it is.

Storage has to be paid by some one, commercial or growers. Holding inventory is a cost, but also a opportunity, blending, income stabilization, grading, market price speculation, income tax, etc

[tmyrfield]

It matters not who would make the investment in storage. It will be the farmers who ultimately pays for this investment. At least when a farmer buys the bins they are on his balance sheet, and available for opportunities. Grain companies would buy storage but then pay for it with increased basis and handling charges to farmers. The assets then are on the grain companies balance sheets. Only a small minority would think that governments should build storage and would do a good job of utilizing it.

[bgmb]

US on farm storage 13.45 Billion bu
US off farm storage 11.24 Billion bu

https://www.agriculture.com/markets/newswire/us-crop-storage-capacity-increased-in-2017-as-supplies-grew https://www.agriculture.com/markets/newswire/us-crop-storage-capacity-increased-in-2017-as-supplies-grew

But Klause said they deliver everything off combine no need for bins

[bgmb]

It matters not who would make the investment in storage. It will be the farmers who ultimately pays for this investment. At least when a farmer buys the bins they are on his balance sheet, and available for opportunities. Grain companies would buy storage but then pay for it with increased basis and handling charges to farmers. The assets then are on the grain companies balance sheets. Only a small minority would think that governments should build storage and would do a good job of utilizing it.

Exactly, build your bins and tou have control and pick up the carry

[Klause]

It matters not who would make the investment in storage. It will be the farmers who ultimately pays for this investment. At least when a farmer buys the bins they are on his balance sheet, and available for opportunities. Grain companies would buy storage but then pay for it with increased basis and handling charges to farmers. The assets then are on the grain companies balance sheets. Only a small minority would think that governments should build storage and would do a good job of utilizing it.

Let me get this straight.


Farmers in Canada have it right. Everybody else is wrong.

That's why Canadian producers have the highest debt load of anywhere in the world.
And loose export markets and keep dropping in world rankings... And why our farmland that's "expensive" is still the cheapest in the world.


There's a $3 spread between port price and farm price on wheat.

That $4.25 "feed" malt to China is going for $7.90 a bushel

We get paid almost 100/MT less for canola than most other markets and we have the crushers to "add value".



It's not a matter of having to sell at harvest. It's a matter of being able to. Why not move a bunch of grain to Port position in summer... When shipping is cheaper and easier instead of pushing hard in winter.

Some of you guys really should go on those ag exchange tours and see how everyone else does it.

[malleefarmer]

Not only south australia all of australia.

Bucket i can store 1600 tonne in aerated bins for sale later usually to container buyers often $25 to 40 above market.

Sell direct of combine in paddock

Tale to elevator in my case 32 kms and sell or store when ever i want direct at harvest.Think this year $2.50 per month once feb rolls around so nov dec jan free storage.

Deliver direct to port elevators hmm 160 to 170 kms i guess.

Some guys store hole crop and sell during year to end users feedlots dairies chicken farms piggerys feed mills

[farmaholic]

Look...you won't get any arguments from me regarding the dangers of complacency or lack of longterm vision, etc.

But there is also something to be said for the wealth of some people in the primary producer ag indusrty and the economic environment that enabled it.

Why don't/didn't certain Industry players set up shop in some of the old suppressed or emerging markets of commodity ag production? Going forward this could well be a problem but the security of Canada, the US and Western Europe seems to have attracted the investment.

[bucket]

Sarcastically I think we should all build the equivalent of grain elevators of the past on our farms and keep the grain in condition for graincos when they need it.

And if the bottlenecks never change we can just add another bin as required.

Canada doesn't use trend line data to ensure the entire industry from farm to port is built as required.

But the shiny snow fence sure looks pretty and make the marketing reps job easier to find the grain.

Graincos facilities at the port are increasing but the bottleneck is the same...

Tell the oil companies to continue to build storage because their production can't move thru a full pipeline.


Billions are lost right now in the oil industry..

The same thing is happening in the ag industry.

[bgmb]

If there were a place to spend money it would be twinning rail lines at pinch points and more terminals on the west coast not more grain elevators.