selling verses collecting

[wmoebis]

Thanks cropduster makes me proud to be a good CANADIAN.
The legislation is already there it just needs updated to cover the modern times where we are selling more into domestic markets and to non traditional markets. These laws were written a long time ago and times change they could have never forseen corp. livestock and hog barns back when our forefathers wrote these.
The second part of my statement was maybe the most important the poeple that are running our gov,t agencies aren't monatoring them and don't seem to be operating under their mandate. They seem more interested in the grain companies than the producer. Although it is our money who writes them a cheque.

[TOM4CWB]

wmoebis;

I agree we must allow an opportunity for security on sales to these entities.

As we work through bringing all special crops dealers/buyers into compliance with the Canada Grain Act, an opportunity should be created for domestic buyers of our grain to source reasonable security insurance for what is owed to grain farmers.

This however, will be only achieved if the grain buyer we choose, itself, will offer the coverage, and this coverage will come at a cost.

You mentioned a broker.

A broker many times will give a much higher level of comfort that we will be paid when dealing with domestic grain buyers.

This is part of the service being offered, an extra level of scrutiny, close involvement in the industry day in and day out... an ear to the ground that you or I do not have.

This service & information is not free.

I expect to pay a fair price for it.

That was five cents per bushel in our transactions in the past year.

Money well spent in my estimation!

WHO did our work for us?

Market Masters Ltd.
800-440-8390
www.grainwatchdog.com

2005 is all about selecting partners and joint venturers who will give my business good information, help make me more efficient, that allow my family business to prosper.

We have SO much information available now, we Must choose the right partner to boil it down, and make it relevant to our specific business!

In selling my grain, key is the marketer, their integrity, will they be honest, will they operate within Common Law Standards, and am I willing to fulfill my obligations as well.

Simply will we both covenant the Negative Golden Rule, which states:

Do not do unto others as you would not have others do unto you;


I choose not infringe upon the Rights, Freedoms or Property of the purchaser of my grain, and
I will Keep all contracts willingly, knowingly and intentionally.

I expect this same standard from my Marketer, in it’s treatment of my business and my family!

Hope this Helps!

[wmoebis]

I agree however there is no avenue in place for protection on either side in case of misfortune or miss representation. I would be interested in knowing how you would be protected if your marketing agent was to fall victim to circumstances beyond their control and was forced into recievership. I noted that they are not licensed or bonded by the CGC so what other avenues are there that I am not aware of?
I did my homework and was assured by no less than 3 top management employees that I would be paid in specified time but other creditors had other ideas. I did put trust in this company. I am a wheat producer and this is the very first time I have sold outside the CWB and not very good results. I am not blaming anyone but the system.

[wd9]

Get as much money up front before the grain is delivered. You don't have to sit back and be the 'victim' in a contract. Get it written in the contract, yes, you can change the contract. If the buyer will not forward you the money, you are dreaming if you think they will forward it after you deliver the grain.

Use a lawyer in trust to hold the funds until the terms of the contract are settled - even pay the fees of the lawyer as a good bargaining tool to get the contract signed or as cheap insurance for yourself. There are many ways to protect yourself if you stop thinking like a 'farmer' and more like a 'manager'.

[hgb]

TOM4CWB- All your getting getting for your 5 cents a bushel is a broker putting a seller and buyer together(which is an important connection) But as with any broker where end user pays for the delivered product, the producer can loose his product.
A couple of years ago I sold several thousand bushels of bly through the broker you mentioned in your post, things unfolded this way:
1- sent the barley out in 3-4 day period
2- received cheque for bly 10 days after delivery
3- deposited cheque,sent broker 5 cents/bushel commision.
4- a few days later I find out bly cheque was NSF
5- notified broker to let them deal with purchaser and was told all would be made right within the week.
6- Nothing was happening, fast enough for me, so I started contacting purchaser to put some heat on him and told broker what I was doing hoping pushing the issue from two parties would speed things up.
7- Got several BS stories from purchaser I investigated some of his stories by contacting his bank etc. and calling his bluff. (I think it became easier to pay me than try to think of more stories to tell)
I still do some business with this broker as they have better prices available at times. The producer stands alone when it comes to getting paid unless ones dealing with a licenced and bonded company. I have found UFA grain marketing to have competative feed grain prices and prompt payment. (licensed and bonded too)

[TOM4CWB]

hgb,

I think it is great UFA is working to help us in the feed grain business.

I appreciate that many brokers work for every cent they get, and generally the last thing a broker wants is an unhappy farmer.

We sell direct because the price IS better. Obviously there is extra risk, and our capacity to deal with that risk effectively will determine if it is good for both ourselves and the buyer! No buyer goes intentionally broke, that owns a farm, that I have ever seen!

[wmoebis]

Makes me wonder how much grain is sold by the CWB to unlicensed domestic buyers and how much is never paid for. May have to phone and ask.

[charliep]

Is anyone from Ontario following this thread? Can you help us understand the Ontario system?

The following is the web link from Agri corp.

http://www.agricorp.com/brm/gfpp.asp

[charliep]

One more question. I understand the provincial pulse growers associations have had some significant discussions around this issue in the recent past. What issues were raised here? Are there any ideas being proposed? This is not to push for confidential information but rather get a sense of industry direction.

[TOM4CWB]

Charlie,

Here is the security part of the APG Risk Management Report:

"On the “Special Crops Industry Security Committee” file.

I am very hopeful that 2005-06 will bring a reasonable resolution to our “licensing and security deficit” which has plagued our industry for nearly a generation.

On January 13th 2005, The Canadian Grain Commission (CGC) has given us some assurance that new and reasonable tools will become available to resolve our CGC “licensing and security deficit”. These tools are as follows:

a) A new class of Special Crop primary elevator, which can coexist with seed cleaning facilities, will be created especially to accommodate our special crops industry by accomplishing the following:
i. Allow legal documentation to be created at the farm gate, when picked up by a truck, or upon delivery, of ungraded produce; of an official interim grain receipt. Official graded grain receipts then would be subsequently issued within a reasonable time period.
ii. Shrinkage and weigh over anomalies within the Special Crops primary elevator would be compensated for with exemptions where required.
iii. Interim or Graded grain receipts held by producers, in store at the Special Crops Primary Elevator would be accounted as owned by the producer, not a liability held against the Special Crops Primary Elevator licensee’s bond or security, until a cash ticket is issued.
b) The Export Development Corporation (EDC) recently started issuing special Accounts Receivable Insurance, to Special Crops Dealers and Elevators. This new EDC product generally allows better usage of “Lines Of Credit”(L.O.C.). When working as intended a purchase of $500K of EDC insurance to cover a CGC bond requirement, for example on a Dealer with $1 million L.O.C., it would be then possible to extend the L.O.C. $500K to $1.5 million, because there is an unconditional guarantee to the bank for $500K by EDC.
c) A reputable Global insurer is in final negotiations with the CGC, to provide Bond insurance at a reasonable cost, competitive to L.O.C.’s today, specifically tailored to each Grain Buyer. It is estimated that this new product could save the Canadian Grain Industry up to 30% of the cost of CGC Bonding today. This special insurance will be specific to the exact floating bond requirements of the licensee buying this insurance. The 100% Bond insurance would be issued to the CGC, and determined and paid out by the CGC to producers entitled to security upon a failure of that specific Licensee.

The above noted improvements when all implemented, allow me to believe that by August 1st 2006 we will have all special crops buyers licensed under the CGC who buy grain under the Canada Grain Act. This will then allow all farmers to be protected in a reasonable secure manner when selling to CGC Licensed grain buyers."

Charlie, cash sales are one thing.

Now we come to hedges or prepriced contracts.

None of the deferred delivery contracts are bonded.

Alberta Oats was a perfect example of where one farmer I know of, lost close to $300,000 of value from these priced contracted sales, without being compensated one cent.

At the end of the day, we must really know and trust those who we deal with... especially when we get into IP specialty contacts, that can only go one place!

We are getting into such a complex system... it is totally intimidating to the average farmer... to increase profit we must increase risk!

What a treadmill... no wonder concentration of the food sector is getting to be such an issue!