May 28C WB debunks myth that it extracts premium

[ianben]

Hi All
I had promised myself I would try to keep out of this CWB debate but I feel Lee has a point.
Farmers by their nature are never ALL going to be astute marketers. I would guess that 60% figure is about right here too.
What affect do these marketers have on the markets?
Are they the guys who are willing to agree to low prices because they do not do their homework?
If there are more of these guys in the market will prices go even lower?
Not everyone is willing or capable of being trained to Tom's standard but having spent the money training him surely he should be free to operate.

Lee the other 60% need more specific advice and we all would benifit.
A guide price for each region based on your marketing experience
Something for us to aim for.
This about a fair price on the day is passing the buck.
Buyers are far better informed than us and take advantage of small surpluses driving prices down by saying they can buy cheaper elsewhere.
Thats why I am here.To find if you can produce canola at $5/bu
Canada I find cannot produce canola at $5/bu, but you blame Brazil for your low prices, they blame the US, round and round we go ever lower.

We need someone to do some proper market research for FARMERS and publish the results in terms we can relate to.

GIVE THAT 60% THE CONFIDENCE TO HOLD FOR A REAL FAIR PRICE.

Like the realtor in a land deal

Why are commodities different?
Do ultra low prices increase demand and reduce prodution?
I thought we had prooved that myth already.

Regards Ian

[TOM4CWB]

Ian,

I think you forget that lower prices do lower production!!!

Look at Canola!!!

The government of Canada said the average price of Canola was supposed to be $233/t for the 2001-02 crop year.

Crop Insurance was half the coverage on Canola of what we could get on CWRS wheat!!!

In a dry year, with everybody saying low prices with no chance of increases, no wonder why acerage fell!!!

We seeded a small crop, because of low prices, and guess what????

Now you in England will benefit!!!!!!

Don't tell me the system of supply demand doesn't work!!

This is the way it must work for the market to remain in balance, right?

[ianben]

Hi Tom
From what I have read here the weather has more to do with what you/we grow than price.

How much of that lower canola planting was due to germination fears?
My crops are totally different to what I planned due to wet fall here.

As usual we farm first and market later.

Without a perception of unfavourable weather there would have been NO market rally due to your reduced plantings.

Thats the way I see it anyway.
We must let weather govern our production.
Why does it have to control markets also?

Regards Ian

[TOM4CWB]

Ian,

There is some truth to what you are saying.

We swithched some acres to barley, abandoning Canola and spraying it out.

This was a straight risk management decision, as all canola was late, as germination couldn't happen without rain, was a higher risk than reseeding with barley!

Further we wanted some barley to take as feed if there was no rain and a reck did happen, to feed our livestock.

These decisions were all weather related, but also were price related because canola had still not got over $300/t.

It appeared to me that a good price for barley was about to occur, at less cost and more profit per acre than canola.

So I helped the Canola market by ripping my crop up and reseeding!!!

We wish we could all have good weather all the time, but this is not reality and so life must go on!

We have had close to 2" in the last 3 days, the crop that is here will now have enough moisture to mature!!!

I count myself blessed to have the opportunity to take the combine out and harvest a crop this year,as some of my fellow farmer freinds will not be so fortunate, only 200 miles away!!!

[ianben]

Hi Tom
Canadians planted fewer canola acres yes, a lot more than they said they would in March, and that summer fallow acreage almost disappeared.
That had little effect on prices though!!
Our buyers know us too well. They do their market research.
I bet those acres which seem a lot to you and me represent 0 point something of total oilseed production.
Where as a weather event which effects EVERY acre, may only result in a 15% yeild loss to you and me has a much greater effect.
Yes we will all be better off with lower yeilds and higher prices. 34x7$is better than 40x5$.
That is my whole argument.
Why can't we with some help from market researchers/advisors/realtors find out how many bu to sell next year to keep the price at $7.
I bet it would be 38/39 bu
If we all get 40bu next year the price will be back to $5 because we all MUST sell that extra bu.

WHY????

Explained in terms we can relate to I believe most farmers would hold that extra bu even the 60% Mel says market poorly.

[TOM4CWB]

Ian,

The fact will be that if we do grow 40bu/ac next year, reality is that it is all avaliable for sale.

And if it is not for sale, it will be some day. Maybe?

A story is useful here

Up in the Peace River District, a farmer was found dead beside his full canola bins.

He had killed himself, why?

I understand he had 10 10,000 bu bins, and had just phoned the elevator and sold the 100,000bu.

He went out to see which bin to start hauling out, guess what?

The first bin he went to was spoiled, bad day.

He went to the next one, it was no good either, really bad day.

By the time he got to the tenth rotten bin he just went to the shop, unlocked the shotgun, and shot himself.

I don't want to be part of this scene, do you?

[ianben]

Hi Tom
No Tom it is only for sale if we WANT to sell it.
Is your farm for sale?
Perhaps at a price?
Your PRICE!!!!!
If we dont look after our crop after we harvest it we will not survive no matter what system we market under.
Good grain was found in the pyramids.

I wish Charlie Lee or Brenda could give us some figures in bu/acre on the difference between $5canola and $7canola.

I think you would be surprised how low this figure is!

Regards Ian

[TOM4CWB]

Ian,

It is sad that one person's disaster is another person's good fortune, in grain farming I guess it will always be this way!!!

It really comes back to, what is a "fair" value for any grain that we grow?

If my farm can make a profit, then selling at a profitable price is fair, isn't it?

If I can grow this grain with less cost than you, then is it OK if I sell at a lower price than you can grow it for?

Isn't this the esence of what we are trying to work out here?

What is "fair" then for the consumer of this grain?

Isn't this all a matter of opinion???

[ianben]

Hi Tom
What I am trying to get at, not too well I know, is that 99% of what we grow even when have good harvests is needed.
No single country/producer could supply the market.
So why do we compete so hard to sell this extra 1%
Look at other industries they moniter each others costs and prices.
They realize there is nothing to gain by selling below cost.
You look at agriculture round the world on the internet,like me I am sure.

Where are farmers thriving during the last two years???

We all have very similar costs/tonne I
think especially when delivered to the customer.

I know it is unpleasent to gain from someone elses mis-fortune but we all know it will be our turn soon. No-one who farms gets it right al the time.

Would not these mis-fortunes be easier to bear if we had a little insurance in the bin from gods bounty in the past.
Perhaps we could then dispence will drought aid and other forms of hand-out we farmers think we DESERVE.

I you still believe farmers have a god given right to sell all we produce and are truly a special case then I see no hope for the future of farming as we know it.

Regards Ian

[TOM4CWB]

Ian,

Then we come back to the moral dilema, if all people are not feed today, then who gets to starve?

If we would take responsibility as a world for the hungry, then would there be any surplus at all?

If I am an optimist, the 4" of rain in the last week may not help this crop, but it gives us reserve for next year!

If I am a pesimist, I can just complain about all the low areas in our feilds that just got drowned out and how much more work it will be to harvest what is in our feilds!

Life is a state of mind, if we agree that we have it pretty good compared to 99% of the rest of the people on this planet, should this not be enough?