Harvest season has been replaced by decision making season.
A large part of a farm’s success is determined by the decisions made through the winter. Unfortunately, it’s human nature to avoid some of the really big questions that face every operation.
The combine has barely been put away and already retailers are asking about next year’s canola seed. Producers are urged to act quickly to get the most popular varieties. Canola seed marketing is in full swing with everybody bragging about top yields. Just page through this paper and look at all the ads.
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For Nexera canola, the sales pitch is about returns per acre rather than the top yield. Producers are encouraged to consider the premiums offered by Nexera contractors.
Some programs offer the ability to lock in a favourable basis level on fall delivery, which can be part of the attraction.
There’s every indication that demand for omega 9 oil will continue to grow. There will have to be attractive returns to encourage additional acres. Although it’s still canola, in many ways it’s like a brand new cropping option.
Decisions also need to be made about all the other cropping options. What do you plan to grow next year? Are you cleaning your own seed or upgrading to a newer variety? Are you growing a crop that you haven’t tried before?
Corn and soybeans are being grown in more parts of Western Canada than ever before. And there should be a contracting opportunity for carinata, also known as Ethiopian mustard, which is in demand for jet biofuel.
Some producers keep their cropping mix simple with only two or three crops. Others try to adjust for market trends.
In addition to securing seed, there are decisions to be made about pre-purchasing other inputs, most notably fertilizer. Will buying your fertilizer this fall save you money?
Most of the time fertilizer is less expensive in the fall, but that isn’t the case every year. Many producers don’t have the storage space for granular fertilizer purchases until some grain is sold.
Of course, producers are also mulling over grain marketing decisions.
The canola futures price was more than $570 a tonne in late August and early September. It had declined to around $520 by early October but improved a bit to around $540 by mid-October.
Depending on when you sold, you might have garnered more than $12 a bushel or less than $11. That’s a huge difference and the market volatility is likely to continue in the months ahead.
Producers subscribe to marketing newsletters, talk to buyers and attend meetings to get information in the hope of making better marketing decisions. In the end, there’s still a lot of guesswork.
Over the winter, many producers will be dealing with big picture decisions such as major equipment purchases and the acquisition of more land either through renting or buying.
Unfortunately, some of the really big questions are too often postponed or ignored:
• Is your business partner/spouse on the same page as you on farm related planning?
• Do you have a human resources plan for when an older family member or long-time employee is no longer able or interested in working?
• What is your succession plan?
Cropping and marketing decisions tend to take priority, but winter is also a great time to work on the big decisions.
Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.
