Cargill offers new options

Limb by limb the post-CWB marketing animal is evolving in Western Canada.

It’s becoming a more complex beast, but that complexity is the farmer’s friend, or should be. Each new element is something that some farmer somewhere could find ideal.

“The transparency is very important for the credibility of the program,” Tom Halpenny, a grain marketing manager at Cargill, told me about the company’s expanded pricing program.

Like many grain marketing interests in Western Canada, Cargill has been expanding the marketing services it offers farmers. In this case, it’s expanding its ProPricing program to handle canola and soybeans.

For the past four years wheat was the sole commodity in the program.

The wheat pricing program has been expanded this year too.

The program allows farmers to hand over futures pricing control of a portion of their farm’s expected production to Cargill, and its marketers will hedge that crop with the same approach and market perspective they use to hedge Cargill’s own grain.

It’s a new crop program each year, allowing farmers to sign up a portion of their next spring’s crop during the fall and into December. The expanded wheat program also lets farmers sign-up old crop wheat for a program with a much shorter horizon.

Farmers make their own basis decisions, and can also get Cargill to price out the futures any time they want or buy back in with various tools if the grain has already been priced.

For some farmers, this would be a great program. For others, not so much.

But that’s the point of post-CWB marketing: there are a lot of approaches possible. This program has been running in the U.S for 19 years, so there’s nothing particularly radical about it.

It would work for the sort of farmers who are OK trusting a grain company as a partner rather than a rival.

It’s taken time for marketing service providers to figure out how to best win and keep farm clients.

I imagine it’s also taking a lot of time for farmers to figure out which approach they like best.

But in the end that’s what “marketing freedom” was meant to be about, wasn’t it? There are ever more choices and whether you agreed with the decision to dismantle the monopoly, you un-questionably have been given marketing freedom.

Cargill’s expanded program is more proof of that reality.

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