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Thread: Price reductions for low spec wheat

  1. #121
    Crazybull
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Jim Bullock View Post
    so the merchants will make a killing out of that, with all their deductions and low price (155/ton

    Why does everyone assume the merchant is pocketing the claims?!?

    The end destination in the majority of cases are giving the claims out and the merchant is simply having to pass them on. Yes some merchants may not be playing fair but i believe on the whole the merchant trade is trying it's best to get stuff moved. Also remember that merchants who have bought at 155x farm will very likely have added 2 - 3 and then sold it on to a consumer or possibly the futures market which at the time of purchasing the physical wheat the relationship to futures was circa 5, now when it comes to unwinding the futures to sell the physical the differential is 15 (against the merchant), some less fortunate merchants will get caught for alot of money if they are not careful.

    Yes some merchants are also end consumers in their own right, but the majority are just brokers between the farm and the consumer giving you guys an easy to use marketing tool. Yes some of you may prefer to try and deal with the consumer direct. Not such a rosey story this year for those who do.
    What if you have sold feed wheat to a home that will only take down to 68kghl and you have 63 i am hearing some pretty tough stories where the mill is defaulting the farmer against his sales. I can only speak for myself but we are swapping parcels about to get them to the most suitable home, not an easy task if you are linked direct to a single mill.


    C B

  2. #122
    Condi
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Jim Bullock View Post
    Well what I thought was 30% of our crop has turned into nearly 50% so the merchants will make a killing out of that, with all their deductions and low price (155/ton)...and as for thr remainder..no doubt prices will fall quite a bit over the next few months as the quality of product coming out of some of the stores becomes apparent (crap)...
    'The price' is a world price, and any UK change in production is but a fart in the wind. We produce circa 13-17Mt of a 650+Mt world wheat crop. On average its probably about 14Mt off the top of my head, or just over 2% of world production.

  3. #123
    ex_pool_manager_ha
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Jim Bullock View Post
    Recent advice has been to market circa 30% of your crop pre-harvest..(to guard against price falls at harvest) 30% when the crop is in store (Oct-Dec) and the final tonnnage post Christmas...to suit your cash-flow..
    Well what I thought was 30% of our crop has turned into nearly 50% so the merchants will make a killing out of that, with all their deductions and low price (155/ton)...and as for thr remainder..no doubt prices will fall quite a bit over the next few months as the quality of product coming out of some of the stores becomes apparent (crap)...Lesson learnt here is to never sell what you have not got..(tonnage or quality) so for harvest 2013 we will not sell a grain until it is harvested and marketable..even if it means crawling around the bank for extra funding to fill the financial gap..
    With respect, so if you choose not to sell forward ever again, you are are exposed to missing out if, or when, the market falls at or post harvest. I accept that the 30% sold forward has turned into 50% after the exceptionally poor yields/quality this year are taken into account, but by holding on to all your crop until its in the shed is much more risky long term. IMHO, changing market strategy from year to year usually is a mistake, and you end up getting it 'wrong' two years on the trot. I speak from some first hand experience!

  4. #124
    Renaultman
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by ex_pool_manager_ha View Post
    With respect, so if you choose not to sell forward ever again, you are are exposed to missing out if, or when, the market falls at or post harvest. I accept that the 30% sold forward has turned into 50% after the exceptionally poor yields/quality this year are taken into account, but by holding on to all your crop until its in the shed is much more risky long term. IMHO, changing market strategy from year to year usually is a mistake, and you end up getting it 'wrong' two years on the trot. I speak from some first hand experience!
    Good sense. Maybe a bitter pill but good sense.
    In 2008 friends had sold forward at silly high prices but had no grain.
    Every year's different.

  5. #125
    Clod Basher
    Guest

    Re: Price reductions for low spec wheat

    Who is making sure the mills are testing the samples to the required sandard, if there is a standard to be met??

  6. #126
    Jon
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Clod Basher View Post
    Who is making sure the mills are testing the samples to the required sandard, if there is a standard to be met??
    I believe TASCC is the industry body that is supposed to regulate such things. Pretty ineffective from what I have seen recently. To my mind it is up to us farmers to know what spec wheat we send off farm and hold the merchants/mills to account if their testing is out. It is not difficult or expensive (relative to value of grain) to sample and test very accurately on farm. Time and money well spent in a year like this when low specific weights are so commonplace that merchants might think claims are unlikely to be questioned.

  7. #127
    harrisonion
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Jon View Post
    To my mind it is up to us farmers to know what spec wheat we send off farm and hold the merchants/mills to account if their testing is out. It is not difficult or expensive (relative to value of grain) to sample and test very accurately on farm. Time and money well spent in a year like this when low specific weights are so commonplace that merchants might think claims are unlikely to be questioned.
    It seems that some farmers don't know what they are sending, as we've had at least 3 loads to be picked up cancelled on certain days due to the load before from somebody else getting rejected at the mill. They are then having to find a home for it. Gets abit annoying expecting a lorry and it doesn't turn up!

  8. #128
    yellow belly
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Jim Bullock View Post
    Recent advice has been to market circa 30% of your crop pre-harvest..(to guard against price falls at harvest) 30% when the crop is in store (Oct-Dec) and the final tonnnage post Christmas...to suit your cash-flow..
    Well what I thought was 30% of our crop has turned into nearly 50% so the merchants will make a killing out of that, with all their deductions and low price (155/ton)...and as for thr remainder..no doubt prices will fall quite a bit over the next few months as the quality of product coming out of some of the stores becomes apparent (crap)...Lesson learnt here is to never sell what you have not got..(tonnage or quality) so for harvest 2013 we will not sell a grain until it is harvested and marketable..even if it means crawling around the bank for extra funding to fill the financial gap..
    timing on selling is always difficult

    but changing what you usually do because of one years could be a mistake

    in 07 when we had very high prices selling before harvest was not the best but in 08 and 09 all early selling was well in the money
    the same in 02 03 and 96 97 and 98

    imho if we had all grown a normal yeald and quality the uk price of feed wheat would be lower than todays price for low bushel wheat after deductions
    the 72 plus wheat is just higher priced the feed wheat due to its low availability

    there is talk now of uk millers looking at usa soft wheat but it would cost 240 delivered to the mill
    feed wheat is priced against the import price of maize

  9. #129
    Mayo
    Guest

    Re: Price reductions for low spec wheat

    As above, please don't assume it is merchants who are making a killing all the time, deductions at source are due to what the buyers find, the same reason you might be asked to load up a month early or even a month late; its because someone with a computer somewhere is calling the shots. Same with moisture, admix etc etc, if a load turned up and I didn't like the look of it first thing I would do is call the people who sold it to me.

  10. #130
    Condi
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by yellow belly View Post
    there is talk now of uk millers looking at usa soft wheat but it would cost 240 delivered to the mill
    feed wheat is priced against the import price of maize
    We are importing good quality wheat from all over Europe. Costs around 240, give or take a bit.

    If you have full spec milling wheat then you could get 240 as well, maybe a little less ex-farm, but not too far off. Problem is very few people have samples which will make full spec without some deductions.

  11. #131
    static
    Guest

    Re: Price reductions for low spec wheat

    I held out until Monday and sold my Cordiale at full spec price, less 6 down to 72kg. At c230/t and with nothing sold so far, I had to have some of that. I just get the feeling that a lot of factors are now known and it was time to sell some. I have some very nice (apart from screenings) Soissons in the long pool which I am hoping will do well too.

    It is interesting that we are selling 55kg barley for more money than 62kg wheat. Yesterday it was 19 off for 64kg wheat.

    Also found this HGCA research which seems to suggest that, for feeding grain to animals, there is stuff all difference between high and low bushel samples.

    http://hgca.com/document.aspx?fn=loa...icationId=9077

  12. #132
    Grain_Buyer
    Guest

    Re: Price reductions for low spec wheat

    Don't think anyone really could argue that 62kg wheat is as good as 76kg when it comes to feeding animals. If that is the case, why are big feed mills rejecting 64kg wheat instead of taking a big claim and tipping it?

  13. #133
    static
    Guest

    Re: Price reductions for low spec wheat

    Err, I think that's the crux of the fairly reasonable and moderately scientific HGCA. For those who dont want to read the pdf:

    "Summary
    High specific weight has long been held to correlate with the feeding value of wheat. This recent two-year HGCA- funded research project co-ordinated by the University of Leeds challenged the validity of past assumptions. Extensive trials with poultry and other trials with growing pigs and mature sheep failed to show significant difference in nutritional value between wheat of different specific weights."

    Its not my argument, so no messenger shooting

    Why are they rejecting it at 64kg? Probably because they can. What are they doing with the light barley? My 55kg barley has sold for more than my 62kg wheat. Dont know they end use but I suspect it is going into a beast. So is 55kg barley more nutritional than 64kg wheat? I dont really know and cant say I massively care. I have a product in the shed and I need to turn it into money and if the knock-off is "x" number of pounds then fair doos.

    171 ex for 62kg wheat yesterday btw. So there are some homes for light grain. Still gives 550/ac cash including SFP even at 2.75t/ac.

    Lithuanian grain, or was it Latvian, coming into the UK today apparently.

  14. #134
    Crazybull
    Guest

    Re: Price reductions for low spec wheat

    [QUOTE=static;1005175]

    Why are they rejecting it at 64kg? Probably because they can. QUOTE]


    But rejecting it does them no good as they don't get the product, if they could use it they would, taking a big claim does them good.

  15. #135
    An Gof
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Grain_Buyer View Post
    Don't think anyone really could argue that 62kg wheat is as good as 76kg when it comes to feeding animals. If that is the case, why are big feed mills rejecting 64kg wheat instead of taking a big claim and tipping it?

    The science says no differnece in feed value and animal performance down to 60 Kg/Hl as demonstarted by independant replicvated trial work commissioned by HGCA. All you guys in the trade happily take the deduction but ive yet to see any of you come up with independant replicated work to support the deductions. When you have some post it on here for us to see and justify the claims. According to "the trade" there is no benefit when it's above 72 Kg for feed wheat ............. seems rather strange then that the value should suddenly mysteriously disappear at 71.9kg and below

    The truth is that specific weight bears little if any correlation with feed value ..................... waiting to see your independant published evidence to the contary :kiss:

    PS Trouble is you chaps in the middle just roll over and take the deduction from the mill and pass it on because you can ........... stand up to them and question it, ask them to justify it ................ you need both sides of the chain' suppliers and customers ......... or are we as suppliers worth nothing to you?

  16. #136
    static
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by An Gof View Post
    or are we as suppliers worth nothing to you?
    Given that mill intake samples are taken as gospel, even if a million miles away from merchant on-farm samples, I think the answer is fairly clear. But I do need to say a big thanks to three merchants this year who have all done really good jobs in getting me some big premiums for the good stuff, and in clearing up the poop stuff. We could easily have ended up with mountains of stuff rejected at sub 72kg, but have managed to shift a lot of wheat with albeit nasty knockoffs but very minimal actual hassle.

    This year I will be adopting a much tougher stance regarding milling wheat rejections from mills. If they want to dick me about for tiny protein / hagberg differences, I will happily have it back as come April there will be plenty desperate for it.

    I dont really know enough about the milling industry. Low density would cause problems if say filling a boat or silos with a fixed volume so I understand deductions for this as I can see haulage cost implications. But mills have no stores. Perhaps they can only "mill" a certain volume per day and hence low bushel means they cant produce as much tonnage of output which clearly is a cost. So there is potential for low bushel to cause cost implications that should rightly be reclaimable. But I think the evidence has rebuked the idea that the deductions are for feeding value. And also my above examples would imply that higher bushel give a cost saving, and so growers could perhaps be rewarded

  17. #137
    Mayo
    Guest

    Re: Price reductions for low spec wheat

    Chaps, the HGCA can say whatever they like, heck low spec weight grain could be superior when fed to animals if you wanted, but you get a stock farmer find very small grains in his feed and he is immediately on the phone for a credit note, and rightly so.

    If the product is below the standard quality parameters, which have been set in stone almost since time began, that is where end users will sit with it. It isn't the fault of the merchants or buyers.

  18. #138
    static
    Guest

    Re: Price reductions for low spec wheat

    None of my samples have very small or pinched grains. They are big and bold. But just not dense it would seem. The Duxford is like marbles......of polystyrene. The Soissons is like rice......made of lead.

    Either way, is this drifting off topic? We all know there will be knockoff for out-of-spec wheat - its a contract term regardless of the science or justification.

    I'm just pleased that so far there are homes for this stuff.

  19. #139
    MrNoo
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by static View Post

    I'm just pleased that so far there are homes for this stuff.
    I know of a local farm that deals with a major Grain Trading Co was told that they refused to take his grain, they couldn`t find a home for it.

    Do the trade have any idea about the size of the UK harvest or are they still expecting 13.5Mt???
    My thoughts are that they`ll be crying out for whatever they can get their hands on come Spring next year or even sooner?

  20. #140
    Clive
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by MrNoo View Post
    I know of a local farm that deals with a major Grain Trading Co was told that they refused to take his grain, they couldn`t find a home for it.

    Do the trade have any idea about the size of the UK harvest or are they still expecting 13.5Mt???
    My thoughts are that they`ll be crying out for whatever they can get their hands on come Spring next year or even sooner?
    I think they know there is a problem but really have no comprehension of how bad or how widespread it is yet

    When the penney drops price will go ballistic

    I reckon that will be march / April next year when they are trying to buy grain fom empty barns

    HGCA estimates are laughable

  21. #141
    Jon
    Guest

    Re: Price reductions for low spec wheat

    It would be a costly mistake to assume suppliers are worth nothing to merchants and that mill test results are gospel. If you believe a result to be wrong challenge it as strongly as possible. If you can back up your belief with a robust on farm sampling and testing system, ideally verified by a merchant's proficiency/ring testing scheme, then you should stand a good chance of success. Just remember that for these big companies, reputation is everything.

  22. #142
    gone up the hill
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Clive View Post
    I think they know there is a problem but really have no comprehension of how bad or how widespread it is yet

    When the penney drops price will go ballistic

    I reckon that will be march / April next year when they are trying to buy grain fom empty barns

    HGCA estimates are laughable
    What will keep a lid on the trade in the short term is the fact they can import top end milling wheat for 240/t from Europe but when this supply runs out the price of UK stuff will surely go up to this level for feed and 280 + for milling wheat but it wont happen untill next april/may, looks like being a very long winter for livestock producers and feed mills could be very short come next june.

    One other thing to factor in is the fact very little wheat has yet been drilled and not much chance of much being drilled for at least 10 days across most of the UK so that will only leave a three week weather window to get it drilled at best before yields will start to potentially drop off next year and this may weigh on the trade next spring!

  23. #143
    Mayo
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Jon View Post
    It would be a costly mistake to assume suppliers are worth nothing to merchants and that mill test results are gospel. If you believe a result to be wrong challenge it as strongly as possible. If you can back up your belief with a robust on farm sampling and testing system, ideally verified by a merchant's proficiency/ring testing scheme, then you should stand a good chance of success. Just remember that for these big companies, reputation is everything.
    Ah but a big company can lose a few bigger farmer customers and it's no real sweat. Not so the smaller concern. Hence my preference for trading locally and with smaller firms- they need you as much as you need them.

    Of course supplies will be imported and blended with lower spec stuff. The markup into the actual food products involved is massive.

  24. #144
    Clive
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Mayo View Post
    Ah but a big company can lose a few bigger farmer customers and it's no real sweat. Not so the smaller concern. Hence my preference for trading locally and with smaller firms- they need you as much as you need them.

    Of course supplies will be imported and blended with lower spec stuff. The markup into the actual food products involved is massive.
    no good company is happy to loose customers no matter how small they might be

    small merchants worry me - they have a habit of going bust ! and in difficult years for everyone in the trade maybe that becomes a more likely proposition than normal

  25. #145
    ex_pool_manager_ha
    Guest

    Re: Price reductions for low spec wheat

    Quote Originally Posted by Clive View Post
    no good company is happy to loose customers no matter how small they might be

    small merchants worry me - they have a habit of going bust ! and in difficult years for everyone in the trade maybe that becomes a more likely proposition than normal
    Problem with dealing with the big guys is you can be just a number, and don't get near the top banana. Also if we all just dealt with them, there would only be the likes of Bunge, Cargill and Glencore left to dictate the market...

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