trans fats

[Braveheart]

wd9, I would have to answer yes, no premium vs a small premium. Here's why. First, these commodities have to be IPed. For people like me who don't like investing money in on storage equipment it is a downside. On farm storage for me shows a negative return and I don't have excess. A decent premium makes the extra work and investment somewhat better, but a small premium, no way.

Second, cash flow is king on our farm. We're fairly highly leveraged and like all businesses we need to generate cash flow at times to meet committments. IP crops can't always be turned into cash if the delivery period just doesn't match up with cash flow needs. (This happened a lot with Warburtons.) But, if the premium is decent, creditors don't mind extending credit. If the premium is small, it leaves them scratching their heads as to our management decisions.

Third, as in ianben's posting, companies are usually improving their profits with these new crops. If my goal is increased profits and wealth, why should our business take less?

These programs with IP, premiums attached are more work, sometimes require more investment and limit my cash flow choices. If I take less premium and continue to produce, it sets up this cycle of being squeezed to do more work, invest more, take more risk for the same reward or usually less.

[disker]

Hi,
These are the points that I was the most concerned with. IP crop premiums have been based on the fact that if you grow 5 bus/ac less @ $8.00/bus then the premium is up to $40. They try to only reflect the loss in yield potential, not that it is value adding. My concern with this multi strains of canola is that they will try and forget the premiums altogether and use the discount theory.
To me the niche market that some anlaysts are talking about for our canola market only works for a few years until "niche" becomes a commodity.
The ethanol thing concerns me a bit too. What happens if the US and ourselves starts growing these huge crops to fill the ehtanol plants and then the gov't subsidies come off ethanol. Do you think the big money is going to stay in ethanol if they have paid for the plant while under subsidy, made a profit until that time. They will not take a loss for the good of the nation, Mothball and can you say an extra 7 million acres of corn?? Ouch!!! I hope things move smoothly but gov't subsidies affecting acreages seeded always seems to come with a price. Sorry about off topic, but just my 2 cents on the future.
Disker

[sawfly]

had a phone survey call the other night on Nexara

asking if i would consider growimg it at various preimiums 25 $ 42$ 64$ or carriying the inputs.

actually had the same type of survey 2 years ago. when they came out with their program they had picked the lowest prem.

with their poor yeilds and green i never grew any.

so if they call tell them to take a hike . that its just not economical.
maybe that will smarten up their priem.

[wd9]

But isn't this what makes canola such a great crop? The ability the choose whether or not you feel a particular system or characteristic is best for your farm. Some growers do well with specialty, some get burnt and never do it again.

The only thing that is ever going to change the premium and values placed on what the grower will get is when the need outstrips production. As Larry Weber says, you guys feed the bull to the bear. We overproduce and then we whine there is no money in it. And the bear burps, and then the companies say thankyou very much.

Trick is I think, how do we determine that balance between excessive price killing carry-over and stifling new market development by not having enough product?