Farmcorp

[AdamSmith]

Chas, Why are you so hung up on needing to CONTROL the price of wheat or anything else for that matter? You seem to beleive others are deliberatly controling the low prices of today, and that's bad. Why is it your control or "farmer" control is good?

Should the price of wheat be controled one day, what would that price be? $4/bu., $8/bu., why not $35/bu. Since this new structure would be able to control that price why not aim high. How will you know what the proper price is? I know! Cost of production plus a profit, but who's cost of production? Yours? Mine?
A beginning farmers?, An established farmer?, A farmer with Three 400hp tractors or one with one 70hp tractor? All these things have to be considered in order to make this thing work.

Who sets the price? You can't have supply and demand setting the price because those things fluctuate and if supply and demand fluctuate, price will have to fluctuate to either encourage production or discourage production and it seems to me that a whole bunch of people including yourself are trying to eliminate that. You can't control production. Sometimes it rains, Sometimes it doesn't. Sometimes it freezes, Sometimes it doesn't.Sometimes disease hits, Sometimes it doesn't. Alot of things can happen to effect the world production of grain.

What do you propose should happen if some bad seeds out there figure out how to grow wheat or a wheat substitute for much less than all other farmers and they find a demand for their grain and sell that grain for less than the controled price? Jail?, Fines?, something else?

Now that you have figured out who sets that new higher price and how to make sure no one sells for anything other than that price (higher or lower). What happens when every farmer grows all wheat because the price is $8 or $10 bu. but demand falls in half because the consumer can access something as equally nutricious for half the money?

Aren't you right back where you stated from? And you've capitialized all your gains back into your land, machinery etc.

So my Advice to you would be, answer those questions and if you still think there is the slightest chance that the price of wheat can be magicly controlled to suit only the farmer, Go and spend your $100. It's alot cheaper fantasy ride than Disneyland!

[charliep]

Parsley

I was highlighting that public surveys provide information to farm managers just the same as the rest of the industry. Grain industry partcipants do their own surveying/use outside sources but this information is not made available to outside (it is treated as internal market intelligence). This is not to say that information like seeding intentions, production forecasts and stocks reports couldn't be done by private industry but I think it is important that an unbiased source collects and publishes on a consistent basis. Should farmers be paid for providing this information? I'll back away a bit but highlight that this information also has value to farm managers in decision making.

[TOM4CWB]

AdamSmith,

I like your expanation on Farmcorp, It is an interesting idea, that tries to make money from people,(farmers)but really avoids the real issue.

The real issue is how can my farm grow a product that increases the value of my product so the customer and end-user is willing to pay more for my special product.

In with this is, how can I grow this product in a way that gives my management more control over production costs, and at the same time is sustainable in the long run.

If what I do on my farm incorporates these two factors, then I am well on my way to having a profitable farm in all areas of production and marketing!

If at this time I need to have more volume to meet market demand to break into a market, then perhaps the best way is to work in personal relationships with other farmers to cooperatively acheive this need of the market.

Hard work and good timing have always been the hallmarks of a profitable venture. Could Farmcorp be part of the solution in this framework?

[parsley]

Such an unimaginable thought charliep, isn't it......the government not information-gathering..................?

Many farmers want to assume more marketing control. Is information control another facet of farming that needs repossessing.?

Charliep, Information is money, and as you say, "this information also has value to farm managers in decision making. " Yes. But, information-market intelligence...farmers selling information to service industries.... is also money. This is an asset that has considerable dollar value that , at the present time is not available at farmgate.

Government surveys, collected compulsorarily, certainly do, as you say, "provide information to farm managers just the same as the rest of the industry" But the same results could be accomplished by farm -organization (Farmcorp?) run surveys, with that information not only shared by members, but also sold for profit. Of course, the more disciplined Farmcorp's approach to statistical gathering, the more the value.

My question to Chas broached the idea if a farm organization (Chas seems to think one representative farm organization would help to elevate our economic woes....I don't neccessarily concur....) canned the StatsCan legislation,(all members refusing to co-operate), collected the information privately, and used information as not only a tool but an assett, would that be another activity you could see a farm organization taking on?
Parsley

[charliep]

Parsly: Farmcorp could do the survey level work you talk about provided they are able provide an unbiased source of high quality/accurate information. As a comment from a previous life, it is hard to charge for this type of information. Too many people willing to give it away once it is released. Particularly if this is the primary source of grain information that is used both internally within Canada and externally by both competition and customers.

[ianben]

Hi Adam
I know you adressed your piece to chas but hope you dont mind my comments.
I believe somehow farmers have to find a way to match supply and demand in all comodities and STABILIZE prices.
Price fluctuation we have today is unacceptable to both producers and comsumers and is detrimental to demand.
I do not believe we have the right to sell everything our farms produce.
I do believe we should store our own excess production to garentee supply for all those sometimes you quote.
This is what the rest of the business world does.
TELL ME Adam! Why are farmers different?Are we really unable to move into the 21st century?

Regards Ian

[parsley]

Ian, I consider both production and marketing as complimentary elements that producers must adjust to.

Production must deal with nature's cycle. If we get hail, we get hail. Rather than try to conquer nature, maybe we'd be better to try and go with the flow. It is a master at adapting, and we are but mere novices. If it's wet, plant a crop that likes moisture. Those kind of adaptations are commomplace to the farmer.

Markets have the same cycle that often follow production as well as other oddities. They are impossible to predict absolutely.You want to iron them out and take out the wrinkles, and that is the same mountain Chas is trying to climb.Markets have not been domesticated, Ian and I don't think they ever will be. IF you want a guaranteed price you will settle for less returns.

Complete Market Stability is not my goal. I don't think it is ever attainable, and like production, I think we need to better improve our skills at adapting to the unpredictable.

Market fluctuations are normal...learn to live with them.


Parsley

[chas]

Thanks boys for all your comments.
Some of us are in the mind set of the wagon rut days and some of us in the mind set of creating a better way to price our product. Are we to throw our hands up and say that this is as good as it is going to get or are we going to try and make our industry better.
Adam you are the happiest man (if I read you correctly) on the website with the present Marketing system that we have. Are you a farmer? Or are you growing some funny tobacco. Its people just like you and me you created this mess. Just maybe people like us could reorganize this mess for the betterment of farmers every where.
Parsley I didn't know there was any skill in predicting the unpredictable. Most expert skilled market brokers have a worst batting average than most pitchers.
Freebird you have a relentless pursuit for trust.
Ianben I will ask your question about Farmcorp's international ambitions.
I went to the dual marketing side of the CWB meeting in Red Deer last night . I will comment in the CWB directorship meeting thread. Chas

[parsley]

Chas , your statement,

"Parsley I didn't know there was any skill in predicting the unpredictable".
is not what I recommended, and is inaccurate.

This is what I said:
"I think we need to better improve our skills at adapting to the unpredictable".

Our world is going to get topsy-turvy Chas. It is just beginning. You are going to find it harder and harder time coping if you continue to demand... 1. price stability,
Aida is the most recent; the CWB is by far, the most long-standing scheme introduced to the farming community. Farmers are still poor even though $3.00 wheat is "stable" You've got stable CWB prices, and you're not happy. You want more of the same?
2. no fluctuations
3. "the good old days",
4. guaranteed (gov't) income,
Tom Flanagan, in his article, "Why Canada is a kleptocracy?", states, "What the subsidies achieve is to underwrite
misguided economic policies. ". Good advice.
5. practicing unsustainable economic farming practices
(HIGH input costs plus profit=not attainable).
You cannot afford to farm with high inputs any longer.
6. Or demanding some regulatory scheme that guarantees you a piece of someone else's profit. Shouting it's your "right" That is Rockpile's forte, and , sometimes, you seem to lean this way.

We live in a country where we owe almost $600 BILLION Chas . Divide that by 30 million Canadians, and you will groan. We are vulnerable. If the money market refuses Canada an operating loan next year, we can't even pay our police force, or our postal workers. We are in a financially precarious situation that will not disappear through SPENDING programs.

My point was, recognize that we live in unpredictable times. Chose solutions that reflect this....... Diversity. Looking at NET instead of GROSS. Big is not always best. Sustainability.....economical and environmental.

I'll stick to my advice:
"I think we need to better improve our skills at adapting to the unpredictable".
Parsley

[AdamSmith]

Hi,
To Ianben, Farmers as people are not any different than any other people in society. Our interests and desires, our hopes and asperations are all pretty much the same. Farming and the Grain Industry in particular are quite different than anything else out their.
You can not apply the same formulas or the same solutions to the grain business as you would for say the oil business or the car bussiness. With Oil should the price fall a handful of autocratic Arab shieks can go into a room and decide whether they want to open up the taps or close up the taps. The oil was made millions of years ago and it will still be there tommorow if you don't want it until then. The manufacturing business can speed up or slow down production with just a simple decision. They can build products to spec and only build what is in demand.

The grain business on the other hand (Yes Chas I am a grain farmer) has a number of inherent realities that just won't let other business models work and achieve the same level of success.

As a grain farmer I can not gaurentee anything. Not one thing. Volume, Quality, Timeing of availability. Mother Nature can wreek havoc on all my best laid plans. She's done it to me in the past and she'll do it again.

Keeping grain off the market to avoid gluts sounds good in theory but as long as it's out there in storage it will have a dampening effect on price because the buyer knows you will ultimatly have to sell.

As far as moving into the 21st century I don't understand the question. Is this technology related or when are we going to abandon that evil 19th century form of capitalism?

To Chas, Happiness has nothing to do with it. The company of my loving wife and children make me happy. Having my son score the winning goal in a hockey game makes me happy. When it comes to the business of farming I try not to let my emotions dictate my decisions. I may be going out on a limb here but I don't beleive even you Chas are unhappy with farming but I think you are frustrated. I'm frustrated but I don't see the answer in any new grand scheme. Where I see the answer is in the small little victory's like Ianben's greenfuel. I beleive something like that has trmendous potential. Building a new base of demand is a very positive response to "this mess".

I believe farmers have tremendous power but acting as individuals making millions of independent decisions all the while acting and reacting to the current conditions of the marketplace.

Be honest if the price of Canola was $10 bu. wouldn't most farmers be mad that it wasn't $12 bu.

If it sounds like I'm trying to argue for low prices I'm not I just think because of the very uniqueness of grain worldwide we have to accept fluctuating prices and fluctuating demand. Prices will improve, they may improve dramaticly. My goal is to profit as much as possable during those good years so I'll have a cushion for the inevitable lean years that follow. In the meantime I'm trimming my costs as much as I dare and maintaining friendly relations with my banker.

AdamSmith