I believe in communist/socialist free marketing and I got all the money owed to me when I delivered open market grain when I delivered it. If I wanted a minimum price with the opportunity to participate in the markets going higher, I would have bought call options. I hope you enjoy your cheque, it's about six months to a year late.
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classicalliberal;
You are sure not a very good communist!!!
Smile... be happy... share in the 'designated area' pain!
It just wouldn't be 'Canadian'... if we couldn't force you to pay for the rest of us...
AND to have all this excitement & 'fun'... seeing how much we can steal from our neighbour... without them chopping off our fingers!!!!
Only in Canada you say!
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Ok, yes I am. I am in the southern manitoba red river valley area and we grow soybeans, corn, oats, canola, edible beans and sometimes wheat (when the rotation requires it), not because I like the risk management aspects or the deliver when we say to deliver totalitarianism, but only when I have to.
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I agree with you Ron. I have made a choice to know everything there is to know about farm risk management and I think I can help people be profitable and lock in prices and inputs, etc.
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At the top of this topic, I meant to say that I don't believe in communistic/socialistic marketing.
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Do you follow and understand the market?
What is your opinion of the latest western producers article on pricing crops in volitiale markets?
Whos plan did you like best?
duvenaud
drozd
krueger
tjaden Lepp
none
What is it that makes you think you can help us?
You do relize this is a fairly old stomping ground,with many people debating many things for many years.
While your at it tell us some of your price targets of the major commodities.
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Cottonpicken, I think that it is too hard to market based on perceptions, predictions and emmotions. I think it will lead to disappointment as many times as it leads to better profits. A lot of people I know when the markets have gone up, and they have generally rallied in the past two years, have held off and made money. That has come to an end this year. What I have learned is that farming is all about risk management. Before I plant something I estimate my costs per acre to grow the crop including depreciation of equipment. Then I figure our what a good return on investment is based on current interest rates, risk premiums, etc based on average yields in the past few years which I keep track of. If the return is 10% for example, then I make a few calculations which figures out a price per ton or bushel. Obviously, when inputs are higher, you need a better price for your grains. Then my futures broker has provided me with hit and miss charts. They tell me how many times the prices for the new crop futures have been at or higher than the various price levels. For example, between Nov futures months since 2001 all the way to 2010, the futures have hit $350 per ton every year. What this means is that if my local basis is $-30 under the canola futures and when I calculate what I need to sell canola for at $320. Well the market from 2001 to the futures months 2010 (which is currently sort of trading right now)has hit $350 every year. When I move up to $390, it has hit is 7 times out of the ten futures months at one point which means that if I put in a target price contract at $360 per ton earlier in the year, there is a 7/10 chance that it will hit. The odds go down as you get higher prices. The $750 Nov futures has only hit once. When I saw that this year and I noticed that even though my input costs are extremely high, I should sell some grain at these levels. I have been through the emotions of selling and having the market go up or not selling and having the market go down.
When I started taking risk management courses, I had an epiphany or a paradigm shift if you will. My job is to grow grain and make a profit, not try to outguess and speculate when I have grain hoping for more. Now, it doesn't bother me when the prices go up and I sell because I know that I have locked in a profit and that is the best anyone can do. You don't go broke locking in profits. That is what a lot of the crushers do. They sell soymeal and soyoil futures and either buy the cash canola, the canola futures or if they are crushing soybeans, the soybean futures and after that it doesn't matter where the markets go they have a profit locked in. The only risk is basis which can erode or create larger profits but it only moves 20 to 30 dollars per ton where the futures can move hundreds of dollars. Anyway, I don't profess to know everything but most people I talk to don't look at marketing this way.
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classicalliberal;
WELCOME!
Have FUN... there are many ideas here... which is what makes this forum fun and expands our world!
The more we think 'outside the box'... the less likely we will be blind sided by history!
GRIN!
'Everything in human activity has happened before... just not necessarily when we were around to watch!'
( > :{
Merry Christmas... and may 2009 bring prosperity!
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