The news for local elevators can look depressing. More and more large farmers have the equipment and the skills to completely bypass elevators on their way to the market. Even when they do sell through an elevator, such farmers get on the phone first. Loyalty means less and less.
The same goes for average and for smaller farmers too. The older generation that stuck by the elevators that they felt had stuck by them is being replaced by a new generation that expects their elevator to earn their business with every sale.
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Even so, elevators think they re assembling the right programs to win that business.
It s all about marketing
The elevators think their success rides on getting more farmers to not just talk about better prices, but to do something about getting them.
I can guarantee farmers will make more money if they have a marketing plan, says Bill Plumley, manager of Westmore Grain Terminal at Morinville, Alta. But while helping his customers develop their marketing plans is part of the value he feels he generates, Plumley says not every farmer is poised to benefit from that value.
First, he says, farmers have to be willing to work with him.
There is nothing more frustrating than listening to farmers speculating about market prices in a coffee shop, says Plumley. Just call me, I can help.
John Taylor, general manager of Collwest Grain at Collingwood, Ont. agrees with Plumley, saying he looks for progressive-thinking farmers who are willing to work with him, and who are open to suggestions and prepared to take advantage of market opportunities.
Taylor has approximately 300 customers and prefers to work with those who
By Jeanine Moyer
spread out their sales by forward contracting and marketing throughout the year, and who think beyond this year s harvest.
There will always be farmers who sell as they deliver, Taylor says. For some it s convenient. Others just don t have the knowledge of markets and how to forward contract, and some have done it the same way for years.
Elevators want those cash-on-delivery farmers to know they are missing opportunities. Then they want them to sit down with their elevator representative to produce a strategic marketing plan with the chance for financial gains. The world doesn t eat once a year at harvest time, says Plumley, who considers a marketing plan a win-win for both parties.
Coffee shops may be popular places for talk and speculation, but the talk too often is based on one-upmanship, and striving for the top price of the season.
Only a small percentage of grain is sold at market highs and David McDonald, manager of Parrish and Heimbecker s Dutton Siding Grain Elevator in Gilbert Plains, Man. says it s hard telling farmers he can t get them yesterday s prices when they call the day after the markets went down.
Meanwhile, during all that talk at the coffee shop, reliable information sources including local elevators and a wide array of Internet sources could actually be helping farmers execute on strategic, achievable plans.
Size doesn t matter
All three managers agree that although there are some exceptions, larger farmers are more progressive. They tend to be more aware of the markets and have a better understanding of opportunities and advantages, and obviously they represent a bigger potential pile of grain to run through the elevator, which makes its money based on grain flow-through.
But that doesn t mean elevators don t want to deal with smaller or medium-sized operations. Taylor says smaller farmers are an important part of his business, making up the majority of tonnage at Collwest Grain.
In fact, mid-sized and smaller grain and oilseed producers are often sized that way because they ve got livestock or off-farm jobs that demand the lion s share of their focus, Taylor says. They recognize the value of marketing, but haven t had realistic access in past to effective marketing options.
The picture is similarly complex when it comes to age. The next generation of farmers will change the face of our customers, says McDonald. On the negative side, younger farmers aren t as loyal as their parents, and they are faster to shop around looking for the best deal.
On the plus side, though, the younger generation is also faster to try something new, and to consider advice about contracting, new commodities and marketing opportunities. That gives the elevator more to compete with than simple board price.
Help me help you
Elevators say they re convinced that working with them to develop a marketing plan and to get marketing insight will strengthen farmers bottom lines. They say it will also reduce the stress of watching volatile market prices, and it will help eliminate the disappointment of missed opportunities.
McDonald says he can achieve all of those things for his customers if they are willing to be trustworthy, loyal and decisive.
Even bigger gains are possible with farmers who add extra business skills, especially if they know their cash flow needs, their production costs and their business objectives, says McDonald. I prefer to work with someone who comes with a list of 47 needs. CG
