The vast majority of grain sales I make with my managed clients are with local buyers or buyers nearby to the location of their farms, (depending on which area I’m trading in). However, I also have direct access to a Cash Grain Brokerage service through MarketLink (a sister company to FarmLink). Please be advised that although it may be advantageous, you do not have to be a managed FarmLink client to request brokerage bids from me; and we only charge a small fee per transaction, so requesting a bid is of no cost to you.
A Cash Grain Broker is an individual or company that does price discovery on behalf of sellers; takes the sellers’ goals and matches them up to the goals of a buyer. Price discovery is a key aspect of grain marketing. It can also be time consuming and take a lot of legwork. Once you do find a price you’re happy with there may still be a few hiccups before a transaction is completed, either because of cross-border services and paperwork or with grade disputes at the destination. A cash broker can help with all aspects of these transactions. At MarketLink we see the deal through from the price discovery to the cheque clearing. This process includes our help in negotiating any discounts or repositioning of the grain that may occur mid-transaction.
Price discovery can make a huge difference to your farm’s profit margin. There are many growers who will invest a little time to shop around their inputs and save as much as they can on their costs, and then will sell their grain for whatever the local company (or company nearby) is paying. At the very most, you may save $.50 – $1.00 per acre on inputs (in extreme cases, particularly with very large farms and buying power). If your crop were to average 40 bushels per acre and you sell it for even as little as $0.10/bu higher (net to the grower), that is an additional $4.00/acre! In many cases, our MarketLink bids have been $0.50/bu to beyond $1/bu higher than line-company and local bids. That could be a whopping difference of $20/acre to even $80/acre in a few cases this winter!
It is not always the case that MarketLink’s bids are higher and in many cases we will tell growers that they are further ahead to sell locally. However, it is most definitely rewarding to know where the market stands. Recently, (this article was written on July 21), I was assisting a managed client (not in this area) in making a new-crop durum sale to facilitate storage room; the local bid was at $7.10 and when asked for the best possible bid, it changed to $7.22; I got a MarketLink bid to do railcars at $8.23 (net to the grower); my client took that bid to the local buyer and the local bid was instantly revised to $8/bu. This company was right alongside of the rest of the buyers in that area; however, the market was clearly not where it should have been. Through both FarmLink (with our network of advisors across Western Canada) and MarketLink actively trading domestically in Western Canada, as well as the U.S and overseas, we are able to really keep our finger on the pulse of where prices are and where they should be.
One of the goals of MarketLink is to know what the market is willing to tolerate on any given day. This is very helpful when you want to put a price tag on your grain. I encourage growers to know their cost of production and not be afraid to ask for the price you want for it. It also helps to make your sales at the correct times throughout the year in order to capitalize on the best possible prices. In addition, by knowing and understanding the market, you will know when you can dig your heels in and ask for a better price; and you will know when you better just take the best you can get.
In closing, whether you are a managed FarmLink client or not, please don’t hesitate to call/text/email me to get you a bid on any of your crops. You have nothing to lose! There may be times where we don’t have a bid on what you’re looking for. However, if you give me a list of your inventory, I will contact you as bids arise!
As of today (July 21), it seems we have some of the absolute best crops right here in the Eston/Kyle area! With harvest right around the corner, I look forward to hearing from you. I wish you all the very best for a safe and prosperous harvest.
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