15 Business Days

[Birddog]

Long time stalker, first-time poster. I am a farmer and you should be able to tell by this post.
Read a newsletter this past holiday season sent out by one of Canada's Best Managed Companies. In his section the CEO stated that bulk shipping of pulses is killing the industry. I agree with him. I offer a quick solution for him. Quit making us float your finances for 15 business days and I will gladly quit selling to those that pay me with my truck idling on the scale. I am guessing he is a leader among his peers. If he was to start pushing for this change to fix the industry he would probably be able to bring it about.

[walterm]

Those are some of the issues that sure could have been addressed when Grain Act was amended and been handled by Grain Farmers Advocacy Office if it had been implemented like it was recommended. Opportunities were missed big time.

[bucket]

If a grainco or processor can't pay after being scaled and graded....there is no sense in dealing with them...

No reason for 15 days....that's what banks are for....they want the farmer to finance the sale....that's bullshit. ...

Why is it every one that does their work after the farmer has finished his gets their money before a farmer?

[sumdumguy]

I wouldn’t ship my product if it weren’t cleaned and bagged and I am dealing with a respectable long-time bonded buyer. I don’t sleep so good with my arse hanging out. Too many things can change en-route as in admixture, contamination when product is bulk. Now Europeans are testing for everything.

[iceman]

Do you have a link to the article birddog ?

Iceman

[Birddog]

http://simpsonseeds.com/the-pulse-winter-newsletter-4-2-2-2-2/

[Birddog]

That's my point though, do you call the Grain Commission every time you make a sale sumdumguy? The transaction happens at the pit. That is where you lose all your power. Possession is 9/10 of the law. These guys should be paying up. This industry isn't new anymore. If this CEO wanted this problem to be fixed he could step up. But he doesn't. Why not? They are an old company and so are many others that we deal with. They shouldn't need us to float them anymore.

[Crestliner]

Simple answer....there is no money in the special crop business. Hasn’t been for over 20 years. Bulk business by line companies has been done at a loss and covered by fertilizer and seed sales to the same farmer. Little guys and big guys have been going out of the business for years....it’s a sick industry...sad when it used to be such a powerhouse and saved many farms in the 80’s and 90’s when the CWB choked the hell out of farmers cash flow. Remember they used to take 18 months to pay you with your own money. Memories are short!

[the big wheel]

Simple answer....there is no money in the special crop business. Hasn’t been for over 20 years. Bulk business by line companies has been done at a loss and covered by fertilizer and seed sales to the same farmer. Little guys and big guys have been going out of the business for years....it’s a sick industry...sad when it used to be such a powerhouse and saved many farms in the 80’s and 90’s when the CWB choked the hell out of farmers cash flow. Remember they used to take 18 months to pay you with your own money. Memories are short!

Are you kidding? All the ones that supposedly went broke retired as multimillionaires.

[sumdumguy]

Birddog, I hear you, but gotta say a couple of things. #1 margins are getting squeezed to zip as the industry matures. #2 - Small processors are investing huge right now just to provide pristine product- colour-sorted, shiny, clean food for buyers of all types. #3. It is not a level playing field. Just like farmers, some big guys are operating with some one else’s money, even government and they can out-bid you until you are working at a loss. We all know how that goes. #4. The money from the other end isn’t seen for a long time, like 90 days plus and the middle man is floating the deal. 5. There’s a reason many companies have come and gone. 6. It’s not a cakewalk

Let me tell you what the pulse industry was like in the eighties (in the beginning). Producer hauled lentils into a plant where they were cleaned and bagged. Producer paid 3 cents a pound to the processor and storage charges started when your bags hit the concrete floor. The bags were shipped to Montreal at producer’s cost, now the growers lentils were sitting in Montreal. When the CGC got around to it, they would probe the bags and give your product an official grade cert - more port charges. Then producer could sell the product through any broker and get paid when the bags hit the other side of the ocean. These lentils were the producer’s responsibility if anything went wrong, bags were damaged, missing, mouldy, mouse deficated on them, container boat sunk. Then we had odd lots sitting on the plant floor because lentils were sold in 40,000 lb. lots and there was overage. I could go on and on as Agdevco, CGC, Pulse Growers, governments, processor groups, farmers, and others worked to grow the industry. I know it is not perfect and you can’t satisfy everybody all the time. But processors try hard.

[sumdumguy]

Then there came the epics of big grain companies pre-selling product from the January before the crop got planted. There were sagas along the way and they found out you couldn’t count on the product coming off the field by a certain day and you couldn’t always count honour of commitments. Prices spiked from 18 cents to 70 cents in days. Evolution and disasters and success stories for sure but I think I can safely say it was interesting times and the industry seems to be serving both sides pretty well. I’ll probably get back lash but without this industry, it would have been different times, especially when the CWB was in control.

[LEP]

Are you kidding? All the ones that supposedly went broke retired as multimillionaires.

Well what are you doing farming? I am sure there is plenty of room on the gravy train. Hop on.

[Birddog]

I was just offering Greg, Murad and other leaders in their industry to take the lead and fix the problem. However, sumdumguy you have explained very well the excuses they can use to make it the fault of the farmer when these export barriers come up. The processors must use rotating lines of credit to buy our product? Would paying on the scale versus waiting 15 days then throwing the cheque in the mail the first afternoon after the weekend (making it closer to 20 business days) really stretch these lines of credit? They must be receiving payment from the other end on a regular enough basis?

[the big wheel]

Well what are you doing farming? I am sure there is plenty of room on the gravy train. Hop on.

Who says I m not? Lmao would you like 38 cents for canary right now?

[LEP]

I was just offering Greg, Murad and other leaders in their industry to take the lead and fix the problem. However, sumdumguy you have explained very well the excuses they can use to make it the fault of the farmer when these export barriers come up. The processors must use rotating lines of credit to buy our product? Would paying on the scale versus waiting 15 days then throwing the cheque in the mail the first afternoon after the weekend (making it closer to 20 business days) really stretch these lines of credit? They must be receiving payment from the other end on a regular enough basis?

Actually it does. If in your example it is 20 days then they would have to pay for 20 days of product. So for instance if a processor does $100 million in sales a year, it would take an additional $5,500,000 in credit/equity minimum. So it is a big deal.

Not saying delayed payment is right, but if the industry was forced to go to 1 day payment or same day payment you would have to deal with maybe P&H, Viterra and Richardson?? Guess which way basis would move on special crops then?