CALGARY – With massive changes marching through the country grain-buying system, farmers are looking beyond local elevators for markets.
Going through a grain broker, who lines up a buyer and seller, may be one route for people seeking different markets for their feed grains.
“Changes in freight and other factors are really making the producer take a hard look at what he grows best and where he can get the best value for his product,” said Greg Lore of Ag Value Brokers.
It’s a service frequently used by American farmers to find the best offer for their grains, said Lore.
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While there is a Winnipeg cash market, Alberta-based Ag Value Brokers focuses on the Alberta livestock feeding industry, Lore said from his Calgary office.
Traditionally, farmers have dealt with local grain elevators or a neighboring feedlot when they want to sell grain. The cash brokerage service enables them to shop around for the best price, without obligation, said Lore.
Brokers can show prices, then link buyers and sellers who can deal directly with each other.
Unlike grain companies, brokers don’t buy the grain, but receive a commission, usually around $2 per tonne, when a deal is closed.
People interested in deals more complicated than straight cash sales may find it best to deal with a grain company which can tap more effectively into the futures market and other options.
Lore said grain brokers don’t interfere with Canadian Wheat Board business but with imminent changes there, he said a broker’s marketing scope may broaden.
“We believe the board’s powers and mandate will likely change in the years to come and were the U.S. market to become more available, then a cash broker is going to be well positioned to help U.S. buyers gain access to the Canadian market and vice versa.”
Lore said many farmers are cautious when dealing with brokers since the farmers are not familiar with the company buying the grain. He said most farmers start by selling small amounts until they get to know the service. Besides grain brokering, some firms will also provide freight brokerage and risk management services.
