ValueChainFX
This is my theory in short.
Marketing Solution to Farm Crisis.
The farm has been in a crisis situation for 152 years, that was when the first commodity market was opened in North America. The commodity markets were established so grain buyers could protect their position when buying from producters and then selling the same amount on the futures to protect their purchase price plus their freight and handling fees thus building in their profit. Their is no consideration for the cost of production for producters in this marketing process.
The traders very actions of selling and buying into the future limits the upward movement of the price of grain to a mimium. The grain buyers are not so much looking at supply and demand as they watch trend charts to establish the price. This act of protectionism in grain trading has resulted in the price of grain remaining relatively the same low price for 152 years, not allowing it to keep up to imput cost. In my view there is not a surplus of grains in the world. Every farmer including myself sells every bushel that we grow each year. To me a surplus of a commodity happens when there are no buyers for it. This would indicate that our problem is not surplus but how we price our grains and oilseeds. Governments are unable or unwilling to over come this pricing problem. The less farmers the less complaining.
The producters by forming their own Producter Contolled Marketing Agencies North Amnerica wide or preferrable taking in South America and Austrailia also, could very well allow us to reach the real pricing market. Large grain traders and the commodities market would dissappear from the lack of use as the agencies took over. The Agencies would market all of our grain and oilseeds domestically and all export sales. The real commodity market will come to light returning the cost of production, aliving and a profit for the family farm and done in fair way for producers and consumers.
Farmers have always wanted freedom to market their goods. In reality they have never had it because of the operation of the commodities market which kept the industry on the verge of bankrupcy throughout history. The Governments of Europe, Japan and the USA are prime examples of who believes the commodity market doesn't work - they subsidize their farmers to some sustainable level.
Indiviual farmers are poor marketers not because of their ability but because of the false world price produced by the present marketing system that protects middlemen and processors.
We must convince all farmers that by merging together we can gain control of our market and control over our imput cost to build a sustainable future for the family farm. Without Agencies the farm crisis will continue forever. Marketing boards like the CWB have been limited from getting a higher price for farmers because of the limiting factors of the flat line price created in the comodities market. The markets have failed us for 152 years, its time we took charge in marketing our own product. There is no surplus in the world, people are living from hand to mouth on a 45 day supply of food. Thank God there has not been a food production disaster.
Think about it we can make farming a sustainable industry by taking control of our marketing as a group, individually we lose. Chas
This is my theory in short.
Marketing Solution to Farm Crisis.
The farm has been in a crisis situation for 152 years, that was when the first commodity market was opened in North America. The commodity markets were established so grain buyers could protect their position when buying from producters and then selling the same amount on the futures to protect their purchase price plus their freight and handling fees thus building in their profit. Their is no consideration for the cost of production for producters in this marketing process.
The traders very actions of selling and buying into the future limits the upward movement of the price of grain to a mimium. The grain buyers are not so much looking at supply and demand as they watch trend charts to establish the price. This act of protectionism in grain trading has resulted in the price of grain remaining relatively the same low price for 152 years, not allowing it to keep up to imput cost. In my view there is not a surplus of grains in the world. Every farmer including myself sells every bushel that we grow each year. To me a surplus of a commodity happens when there are no buyers for it. This would indicate that our problem is not surplus but how we price our grains and oilseeds. Governments are unable or unwilling to over come this pricing problem. The less farmers the less complaining.
The producters by forming their own Producter Contolled Marketing Agencies North Amnerica wide or preferrable taking in South America and Austrailia also, could very well allow us to reach the real pricing market. Large grain traders and the commodities market would dissappear from the lack of use as the agencies took over. The Agencies would market all of our grain and oilseeds domestically and all export sales. The real commodity market will come to light returning the cost of production, aliving and a profit for the family farm and done in fair way for producers and consumers.
Farmers have always wanted freedom to market their goods. In reality they have never had it because of the operation of the commodities market which kept the industry on the verge of bankrupcy throughout history. The Governments of Europe, Japan and the USA are prime examples of who believes the commodity market doesn't work - they subsidize their farmers to some sustainable level.
Indiviual farmers are poor marketers not because of their ability but because of the false world price produced by the present marketing system that protects middlemen and processors.
We must convince all farmers that by merging together we can gain control of our market and control over our imput cost to build a sustainable future for the family farm. Without Agencies the farm crisis will continue forever. Marketing boards like the CWB have been limited from getting a higher price for farmers because of the limiting factors of the flat line price created in the comodities market. The markets have failed us for 152 years, its time we took charge in marketing our own product. There is no surplus in the world, people are living from hand to mouth on a 45 day supply of food. Thank God there has not been a food production disaster.
Think about it we can make farming a sustainable industry by taking control of our marketing as a group, individually we lose. Chas
There will always be a Cargill or 2 around so that we must live with, and that is not a bad thing. I guess what we have to do is not try to take the big guys head on. We are more then capable of doing some very specific things better then the big guy. Their markets are designed on volume (huge volume). I believe that by being better then they are at providing not only high quality but a unique product, that includes our end users feed back and tracking systems with information flow up and down the supply line we can develop not only the exact products our end user wants but cut our costs of production in the process. Many people call these niche markets, well, at the present time this niche is waiting to explode but it is up to us as producers to build the foundation that will save us money, make us money and lock in the customer base.
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