By: Shankar Das, P. Ag., Regional Farm Business Management Specialist
In general, effective and efficient grain marketing requires an in-depth knowledge of the marketing conditions of the grain at the global level. The conditions include the players, the market factors and the market outlook.
Who are the players in grain marketing? At least four: farmers, grain companies, retailers and consumers who can also be grouped into two interdependent groups: sellers and buyers. The intermediate players, such as grain companies and retailers, are both buyers and sellers at the same time while the producers are sellers who are historically the price takers in this marketing game. However, producers can change their ‘price taker’ fate and improve their bottom line with better marketing knowledge including the factors that drive the market outlook.
What factors usually play out in grain marketing? Take 2016 as an example. Ed White (Western Producer, Jan 7, 2016) indicated that several factors and wild cards may play roles in 2016 grain marketing: the currency exchange rates, global demand for US corn, world soybean production, weather, economic strength of China and developing countries, yield gains and moisture and growing conditions in the western prairies this spring.
All or most of these factors along with factors such as the stock/use ratio provide a general market outlook for an upcoming year. The analysts also play an important guiding role and usually offer greater insights into the market outlook and sometimes reveal wild cards that could drive grain and oilseed price up or down.
Canada is a major grain exporting country and needs to sell grain at regular intervals over the year. In addition to understanding the market factors and market outlook, producers also deal with the grain companies who make contracts. The grain companies, on the other hand, sell grains to the retailers who make contracts with the grain companies for certain quantity as well as quality in this most complex and dynamic global market value chain.
This year, the Ministry of Agriculture is hosting a series of grain marketing workshops during February 8 to11, at four different locations in Saskatchewan including Rosetown on February 11. The objective of these workshops is to provide an improved grain marketing knowledge to producers. A number of key speakers will give presentations at the workshops.
To view the list of grain marketing events please visit our February Events Calendar postings or call 1-306-463-5446 to register for the workshop in Rosetown.