Farmers feeling powerless

Elevators full | Prices are not available at some elevators and poor basis levels are eating profits

They are not only signs of a glutted grain handling system, but also offer proof of the powerlessness of farmers in years of large crops.

Gaping basis levels and elevators refusing to even offer prices for some crops are becoming a growing problem across the Prairies.

“Farmers are virtually giving away their excess yields just to get them off the fields so they wouldn’t spoil,” said Starbuck, Man., farmer Ed Rempel, president of the Manitoba Canola Growers Association.

“Their bins are full and grain bags are OK only as long as you can keep the wildlife away.”

Some farmers are discovering they can’t even get a bad price for crops at their local elevators because some points have stopped posting prices at all. Others are having to swallow awful basis levels that steal profits.

Even some farmers with delivery contracts have been told they’ll have to delay deliveries until enough rail cars can be found.

And those who don’t have delivery contracted might not be able to move their crops until April, advisers say.

“They hate to hear it, but you have to play the game that’s in front of you,” said Brennan Turner of FarmLead.com, an online crops marketplace.

Jim Beusekom of Market Place Commodities in Lethbridge echoed that thought.

“People say ‘I don’t want to chase the market,’ and that’s generally right, but sometimes you have to chase the market.

“We’re getting a lot of calls to our office now (in which) guys are almost in panic mode. They’re really worried. They’ve got wheat and they don’t know what to do with it.”

Feedgrain sales are among the brighter points of the market, with sales still possible, even if prices are weak.

Wheat is the most challenging commodity, many say, with some buyers telling farmers uncontracted grain has little chance of moving before April.

“Now you almost can’t deliver if you don’t have a contract,” said John Duvenaud of the Wild Oats Grain Market Advisory.

Most analysts tell farmers that grain companies simply don’t want to take in more grain right now and are unable to move it.

“A grain company manager I spoke with today said, ‘we’re trying to stop the flow,’ ” said Duvenaud about basis levels. “We have an enormous crop. The entire system is groaning. It’s pushed to the max.”

Rempel said he empathized with grain companies this year because they could make a lot more money if they could get more rail cars. They need to take whatever the market will give them in terms of shipping capacity.

“They have to be grateful about whatever cars they receive and they have to look and sound grateful (or they might not receive the cars they have ordered),” said Rempel.

The grain companies are generally being open and honest with farmers, communicating the best they can with the crude tools of basis and prices, he said.

“They’re dealing with farmers in a very straightforward, forthright manner,” Rempel said.“Farmers aren’t blind. We can see (grain companies) aren’t getting the cars they need.”

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