Farmers can now comparison shop among grain companies with a few computer keystrokes, courtesy of a new on-line service developed by the federal grain monitor.
The Producer Netback Calculator was created by Quorum Corp., the Edmonton-based consulting company hired by Ottawa in 2000 to act as grain system monitor.
It provides farmers with detailed information about such things as freight costs, handling charges and trucking premiums at individual grain elevators, enabling them to compare the net return for wheat and durum.
The site can be found on the internet at www.netback.ca.
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The president of Quorum said producers have always been able to get such information if they “really worked at it”, but this will make it a lot easier.
“This will have it all in one place, as opposed to having to make a dozen phone calls,” Mark Hemmes said.
“I think it’s really going to help a lot of people to find the best alternative for delivering their grain, to find the lowest cost.”
Many farmers and farm groups have maintained that the most important part of the monitoring process is to calculate the financial effect of changes to the grain transportation and handling system on producers’ bottom lines.
Some groups had called for the monitor to conduct prairie-wide surveys of farmers to gather the most accurate information possible on the financial impact of the changes, but that was deemed too expensive.
However, Hemmes said the netback calculator will provide the monitoring agency with that information in a more timely and convenient way.
“This gives us a vehicle to do that on an ongoing basis,” he said.
“We can watch things change and have a base from which to work.”
Producers who use the website are also asked to provide the agency with information on their delivery patterns, including trucking distances and costs. All information is confidential.
The information is intended to provide the agency, farmers, industry and government with data on factors such as average length of haul by farmers and other considerations that determine where a producer delivers grain.
“What motivates a producer to pick an elevator? Is it the trucking premium, is it the grade promotions, is it because they like the elevator manager here better than there?” said Hemmes.
Here are two examples of the data produced by the netback calculator:
- A producer hauls 60 tonnes of wheat 37 kilometres to the Pioneer elevator in Brandon by commercial truck. The delivery is binned at No. 2 CWRS 13.5 percent and paid at No. 1 CWRS 14.5 percent with one percent dockage.
Rail freight is $32.77 a tonne, trucking costs $5.05, primary elevation $12.12 and dockage cleaning $4.04, while a trucking premium of $3.50 a tonne is paid to the producer. That adds up to an export basis of $50.48 a tonne.
Based on a pool return outlook of $211 a tonne for 1 CW 14.5 percent wheat, the producer netback is $160.52 per tonne.
- A producer hauls 37 tonnes of wheat 179 km to the Saskatchewan Wheat Pool elevator at Humboldt, Sask., by commercial truck. The delivery is binned at No. 2 CWRS 11.5 percent and paid at No. 1 CWRS 11.5 percent, with 1.5 percent dockage.
Rail freight is $39.79 a tonne, trucking costs $10.32, primary elevation $12.08 and dockage cleaning $4.47, while a trucking premium of $3 a tonne is paid to the producer. That adds up to an export basis of $63.66 a tonne.
Based on a PRO of $198 a tonne, the producer netback is $134.34 a tonne.
Hemmes said the agency hopes that 1,750- 2,000 full-time commercial farmers will use the website and provide data.
“If we get that, we’ll consider it statistically valid and judge it a success,” he said, adding that the agency hopes to eventually expand the program to include other grains like barley and canola.
