LOWE FARM, Man. — Once a week a small group of farmers gather in the basement of the local elevator here to drink coffee, eat sweets and figure out how to make their farms more profitable.
Their discussion is a far cry from the stereotypical coffee-row gossip.
As grain trucks rumble into the elevator overhead, members of the Lowe Farm Marketing Club conduct an earnest exchange of information — a mixture of fact and hearsay, technical analysis and educated guesses.
Talk turns almost immediately to the question of when the boom in canola prices will go bust and what club members should do to take advantage of it before it’s too late.
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“Canola was down $2 this morning, … it really looks like a bit of a correction,” says Ralph, as he pulls out a stack of charts. “I was just checking the technical signs, it’s really looking like a severely overbought market.”
“There’s a classic ‘key reversal’ right here,” agreed John, circling a blip of lines on the chart. “That’s a bearish indicator.”
Technical factors aside, the discussion turns to some rather bullish fundamentals. Currency exchange rates are favorable, demand is good and U.S. soybean oil prices continue to strengthen.
Some members announce they’re going to price their new crop early while others go home without announcing their marketing intentions.
Familiar scene
It is a scene repeated each week across the Prairies.
Hundreds of farmers across Western Canada gather in basements, government offices and coffee shops to learn about the markets, discuss trends and develop strategies for selling what they grow.
A survey of provincial governments indicates there are about 200 clubs in operation on the Prairies at any given time. Because they operate under a loose structure, government officials say an exact number is hard to pinpoint.
“It’s definitely an area of phenomenal interest by farmers,” said Peter Blawat, chief of the farm management section for Manitoba Agriculture.
The clubs are a government extension worker’s dream. Largely self-financing, their draw on government resources is usually limited to staff time, financial assistance for occasional seminars and small items such as the cost of a speaker phone to allow all members to hear a conversation with a broker.
It’s a low-cost program and because the membership is highly motivated, there is a big pay-back.
Often, they meet in facilities supplied by their local elevator. After all, it’s a movement very much in keeping with the prairie tradition of co-operation.
Confronted with a challenge — in this case marketing an increasingly diverse range of crops — farmers have joined to share information and some of the risk.
Many clubs have gone further.
They have opened commodity trading accounts, worked together to seek out the lowest prices on inputs, and have even struck deals based on volume purchases to buy half-ton trucks, combine headers and fertilizer.
In Killarney, six members of the marketing club teamed up for a trip to the U.S. last year, with grain samples in hand, to see what kind of deals they could strike with northern U.S. merchants.
Since the implementation of the North American Free Trade Agreement, they’ve considered a similar trip to Mexico.
Some observers see them as mini-marketing co-operatives — a grass roots version of the movement which led to the creation of the Prairie wheat pools and Canadian Wheat Board during the first half of this century.
“The biggest marketing club is the Canadian Wheat Board,” said Wilf Harder, chair of the Canadian Wheat Board advisory committee. “We’ve gone full circle.”
