grain merchants

[just_wondering]

What are the qualifications someone must have to be a grain merchant, broker, buyer? We as an industry will have to become better at protecting ourselves from ourselves. What type of protection does a CGC bond get you I know it's not a 100% guarantee sould it be? In the next few weeks people will be calling and you will be anxiously looking for a home for your grain. What are some successful stratagies for protecting your farm. Another point is will this barley growers clearing house help will the cost be worth it thanks in advance

just_wondering

[Zaphod]

Good question. There are no qualifications needed. Most merchants I know have just worked their way into the position, learning from the older experienced guys. Nothing worng with that I suppose. Experience is usually the best teacher anyway, but some professional standards wouldn't hurt either. Probably most take a futures and options course, but that's about it.

Just in the last few weeks, I have heard of a couple of merchants at the big line companies who have trouble putting together an S&D table. Quite scary.

[just_wondering]

So there is no profesional body or set of standards that these folks must adhere to. All they need is an add in the producer and a e-mail. With all the new privacy laws I'm not sure what type of answers references or banks will provide. I'm not calling for regulation here but if people think they are protected I'm not so sure. I had one grain merchant tried to bully me with a letter from his lawyer on a contract we were arguing about my lawyer seemed to think he did not have much of a leg to stand on and sent him a letter saying so. Have not heard from him since. Thats what got me started on this thread was as farmers what are our rights/responsabilies in dealing with the middlemen of the industry, they provide a service but where does it begin and end.

[TOM4CWB]

justwondering;

If the grain broker actually buys the grain, uses Canada grade names in the transaction; and does not pay actual real cash for the grain... then they must be licensed by the Canadian Grain Commission.

If they are a middle person bringing buyer and seller together... then that is quite different... their reputation must keep them in business as they don't ever own the grain in the transactions but are simply paid a fee for the broker service.

I am happy to pay a broker fee for information that led to a sale that was done with integrety and care!

[grainboy]

i think we are getting to things mixed up, joe blow who works for agricore or swp and trades grain is more a merchant. joe blow who has an add in the producer and is putting the buyer and seller together for a commision is a broker. i dont know the circumstances of your contract but if you agree to it you should deliver. best way to pick a broker ask your neighbors or friends who they have had good luck with.

[GrainVac]

Just can't see Agricore or SWP and any other company just hiring any "joe blow" to trade grain their behalf. I'm guessing that either of these 2 companies likely trade a million tonnes of canola a year.1,000,000 X $320 average export price is $320,000,000 worth of product, even if you only look as basis risk. Guessing at $20/t prairie annual average, that's still a huge amount of risk to manage and as public companies I can't see how they'll just anyone do it. Any other thoughts out there, anybody actually know a "merchant"?

[Zaphod]

I know lots. Used to work for UGG, AU and Pioneer. Some of these merchants started in the mailroom and worked their way up. That's not necessarily a bad thing. There are courses in university that describe how futures work, but you don't really learn until you get out there. The way most companies work is that the merchant starts on a smaller crop like rye or work as an assistant to an experienced person. Then if you do well, you work your way up into the bigger positions. That's probably not a bad way to train people, but don't assume they're any brighter than the rest of us. Just more experienced. Must say though that Cargill has a more structured training program for merchants.

Back to another post, companies are licensed by the CGC but there are no qualifications for the people that work there. I have to say that there is a push on to get people certified who give farmers advice. I think it's called Certified Farm Advisor or something like that. It's supposed to be a self-licensing thing and people need to pass some tests or something to put the letters behind your name -- sort of like the Certified Crop Advisor that input dealers are using. Don't know how that's going though.

[just_wondering]

Grainboy
as Arule of life I am Very goods with contracts but in this cercumstance I was doubtful on getting paid 9 weeks after I sighned the contract and 4 days after the contract expired. I did not know nor was I told who was buying my grain, I was not getting enough money to be this fellows banker.
Mostly just thinking in this self regulated aspect of the industry I wanted to know where I stand.