WTF

[TOM4CWB]

What the hell are the numbers you are posting SF3??

SF3, I'm asking because I see on fertilizer buddy you've also been put in your place.

485x25%=363 10%=400.00/ton 46???

WTF are you talking about??

Or anyone else please explain this to me.

You posted this $400/ton price is this legit or what?? Or is this just more wind??

[vvalk]

Lets reverse SF3's math. $400 is cost. Add 25% $500 then 10% is $550 not $485. Or $400 x 35% $540. Snappy I called SF3 on his $14 canola avg earlier in the thread. Not sure why but just tell it the way it is SF3 and quit tryin so hard to impress everyone. It is very annoying and SF3 what makes you think 400 tonnes is "volume".

[SASKFARMER3]

Are you guys just plain Stupid or what, Gee get real.
Most mark up by dealers is in the 25% range from where they pay.
I am showing you in Reverse, that's back wards then for family or friends or other they add a profit of 10%, That works out to 400 ton.
Example!
Tire retail is 250 a tire, I buy it for 25% less so my cost is $187 for the tire, (Costco Sears etc cost will be less because of volume) Then when my father in law or brother in law wants tires his cost is 10% above mine so I make a little profit and he pays less than others. Fertilizer is same so is furniture, bin, seed etc.
WTF use your head!
400 paid Wednesday for 46.
Have a good one.

[dave4441]

Mark up for fert is not 25% first of all. What i would say this may mean, if true, is that fert will go down farther. If it is true, I am guessing that SF3's dealer believes the market will fall thru $400/MT and therefore gave him his big "volumne" price. Tell him what he wants to hear (stroke his Eggo) even though the dealer just wanted to blow off the product before it got cheaper. Probaly a sign of lower N values ahead.

I also find it funny that SF3 priced all his canola at $14-16 when he said the crop was small, ie Lock up the bins boys, they are all wrong, it is a small crop.

[SASKFARMER3]

Dave I admitted I was wrong on the size of the Canola Crop. I thought it would be smaller because of the Peace area and Southern Sask having poor crops. Hey I admitted it a while back.
Stroke my ego what ever I don't care.

[dave4441]

Yes you did, i apoligize.

I do believe that fert margins are not 25% though. Dollar value is just to high. Maybe 25% at some kind of elevated MRSP, but not 25% over Sask country market sales values. Just imagine what amount of money could be made if fert was $500/MT. at 25% they would make $125/MT to load it into their bin and back out. Margins like that would cause Viterra to put a blender in every town that they tore a elevator down in. I continue to sound like someone from the fertilizer industry, I am not, but we have to be realistic about this stuff. When the #s stop making sense then something else is at question.

[classicalliberal]

Dave, I hate it when people complain about how much money everyone else is making off them. If Potash corp is making too much money, buy their shares, if Viterra is making too much money buy thier shares or go into competition with them. That is how the market is supposed to work. There are some things however, like Potash production, that are far too capital intensive to all of the sudden enter the market but for most things, you can arbitrage that market for lack of better words. Usually, if someone is making a lot of money, it means that they are very good at what they do.

[dave4441]

I agree. My only problem is that I have a fairly good understanding of the independent retail business and I know what risks are taken for a very small amount of margin. On a great amount of sales some can make a fair bit of money, but it takes alot to get there. The average person could NOT open a retail location today and make a dollar off fert and chemical, would not have the size to have returns to cover operating expenses. I have spent alot of time thinking about doing this.

[SASKFARMER3]

Dave you are correct getting a business up and running in today's market is not going to happen, but you did mention one thing and that was volume. To get decent price one place a dealer may leave some on the table and make up with it at another place. Volume on 46 may be a small part and the gas seed oil spraying might make up some loss or another client am i correct with this.

[dave4441]

Yes, that is possible. But, long positions in a down market are often met with radical reactions and my personal opinion is that the fert dealers are not used to managing much of a position and may react with emotion (this was shown when they sat for weeks not really knowing how to price, very much, deer in the headlights, expecting the market to hold up because some of them were long expensive product, when global markets where falling) None of the spread in prices showing on Fertbuddy is really making sense (too much range to be actual cost plus market prices), shows a range of positions between different dealers with a touch of grower BS thrown in. (you see this when special crop grain markets are all over the map company to company, usually means that some of the trade is on the wrong side and do not really know what is the correct move, and then everything settles out and everyone is roughly the same price, not colusion, just eventually everyone is pricing off the same export destination price and their position issues have been forgotten) My bet is that the dealer is more in a dumping mood rather then using fertilizer as a lost leader to one customer. (which makes me wonder if he does not see lower prices ahead, with the idea of eventual higher prices in spring to offset his loss to you) What benifit could the dealer have by taking a $20,000 loss? He knows his margins will be thin the next time you come through the door, so it will be tough to make those dollars back. Makes even less sense to lose money on your sale and try and make it on others, would be better to do nothing. Stay at home for the day and make $20,000 instead of lose it.

[SASKFARMER3]

I believe it will settle in late January or early February to the 400 range for a short time then they will start pricing up till spring.