"Contract squeeze worries farmers " is the WP headline

[bucket]

Apparently you can get insurance for this loss. Some have it.

I have heard a story about contract shortage loss,,,,guy had a real tough time getting the payment out the private insurer, and the farmer had shares in the plant he was delivering to,,,he had no reason to falsify what he had.

[jazz]

I will just point out that this disaster we are in was not completely a surprise. Everyone knew the soil moisture profile going into seeding and its easy to work out how much moisture was needed to bring a decent canola crop in. That number would have exceeded the usual annual rainfall in some places that attempted to grow it this yr. Our farm weather services like Drew were warning back in march.

Thats not saying Canadian weather cant turn on a dime, it certainly can, but the odds were long that we were going to get 12 inches if rain fall this summer.

[GDR]

I fully understand that it's a tough spot to be in but I would be kinda pissed if the gov steps in to help guys out of contracts. If I have a contract that I can fill but the price has gone up are they gonna compensate me too? It's pretty well the same financial impact.

[Blaithin]

Not sure a prairie wide heat blast to flowering canola is quite as predictable Jazz. Crops around me are fairly good, it’s the canola belt for a reason, but still not a lot of hope for good canola yields because of the heat.

Yeah they knew moisture levels were sub par but they didn’t see 38 degrees cooking their flowers.

[jazz]

Not sure a prairie wide heat blast to flowering canola is quite as predictable Jazz. Crops around me are fairly good, it’s the canola belt for a reason, but still not a lot of hope for good canola yields because of the heat.

Yeah they knew moisture levels were sub par but they didn’t see 38 degrees cooking their flowers.

True enough, those are elements out of all our control, but the forward contracting is something we do have a choice in. I got dozens of those text blasts this spring for locking in fall production. I ignored them all. I would never sign a forward contract before Aug 1.

Maybe predatory marketing should be investigated as well. The AOG clause is obviously useless and these grain companies were more aggressive this year than usual. Farmers with FOMO were a soft target perhaps.

And we have another problem. The signalls in the market are out there now. Canada is short canola and wheat, some other country or countries will step into the fray now in the offseason. $20 canola might be a distant memory soon as Errol points out.

[bigzee]

Had an interesting talk with my ag rep. Known the guy for 15yrs. I asked him if farmers are going to double down for 22.

He said not likely. Says industry realignment probably coming. Too many guys over their skis.

I was surprised. We have had weather issues before. Maybe the forward contracts were the final straw and guys will check their risk profile now.

Also said non traditional canola areas will give up on the crop now that they have seen zero.

If your last comment stays correct (which I believe it is ) we are headed back to $6 durum, and 18-20 cent lentils. Let the good times roll.

Maybe it’s time to exit the program, get to the lake and quit with all this nonsense.

[bigzee]

If there’s one thing I did right this yr was no canola.

[the big wheel]

East to fix all these *** contracts should be act of god to
Weather to begin with. Al the risk is on us all the time
No matter which stage growing to storing to selling.
What’s the down side? The buyer doesn’t get what you contracted
So what they just pay what the market is then and
Pass it on to consumers. Isnt that who should bare the risk?
If it’s too high then don’t. Buy it.

[Blaithin]

True enough, those are elements out of all our control, but the forward contracting is something we do have a choice in. I got dozens of those text blasts this spring for locking in fall production. I ignored them all. I would never sign a forward contract before Aug 1.

Maybe predatory marketing should be investigated as well. The AOG clause is obviously useless and these grain companies were more aggressive this year than usual. Farmers with FOMO were a soft target perhaps.

And we have another problem. The signalls in the market are out there now. Canada is short canola and wheat, some other country or countries will step into the fray now in the offseason. $20 canola might be a distant memory soon as Errol points out.

Many didn’t think $20 would be around long before. Was a bad conglomerate of factors.

Those guys stuck delivering $10-$12 canola when it was spotting for $23, who can blame them for wanting to try and lock some in for new crop.

Hindsight is 20/20 but it was hard not to book something at least. The idea it could have got so bad so fast was pretty minimal even after poor snowpack.

[Blaithin]

East to fix all these *** contracts should be act of god to
Weather to begin with. Al the risk is on us all the time
No matter which stage growing to storing to selling.
What’s the down side? The buyer doesn’t get what you contracted
So what they just pay what the market is then and
Pass it on to consumers. Isnt that who should bare the risk?
If it’s too high then don’t. Buy it.

Isn’t part of the issue that farmers are currently on the hook for what the buyers sold it for?

Sales isn’t my department but the impression I got was if someone has $11 canola contracted, they’re being told they have to pay like it’s a $20 contract to buy out because that’s what the company sold it for. But I could be understanding it wrong, I’d need it written down for me to really absorb 😂