By Top Crop Manager
Long and short-term opportunities are out there.
By Top Crop Manager
A grower sells a few bags of wheat at a time to a biotech firm in Hamilton,
Ontario, to extract and process proteins, while a researcher studies why mushrooms
grow better on certain types of cereal straw.
Whether through revolutionary new approaches or enhancing existing processes,
the opportunities to boost the value of the crop or the money made from it are
Philip Bailey, marketing manager with C&M Seeds, contends there are opportunities
for growers with different styles. While he concedes no one could have predicted
the shift away from demand for soft red wheat late in 2005, the good news is
that demand for hard red wheats will remain, especially moving into the fall
and winter of 2006.
Another opportunity his company is exploring is the development of hard white
spring wheats for Ontario. "There's less of a sprouting risk with the hard
whites, but there are also some issues like kernel visual distinguishability
to be sorted out," says Bailey. "The mills in Ontario are bringing
in hard white from western Canada, so we're trying to develop it here in Ontario."
Marketing plans still a solid option
Although Cal Whewell has remained a popular speaker at annual meetings in Ontario,
his focus on marketing plans has faded, oddly as the need for better risk management
To that end, Whewell, a broker and risk management specialist with FC Stone
in Perrysburg, Ohio, says reports in early spring 2006 confirm that it is 'never
too early' to forward contract portions of a crop. "I've said for quite
a few years that you have 18 months to sell a crop and in 2006, the market is
giving you the opportunity to extend that another year," says Whewell.
"We've seen a fair amount of July 2008 wheat being sold, and this isn't
even a crop that they're thinking about planting next year."
He also advocates a conservative approach to marketing at a time when costs
can be volatile. While wheat prices for 2008 look good in 2006, the cost of
diesel in two years may change that view. "But if I have 10 percent or
15 percent of my anticipated production two years from now locked in at these
price levels, and I get to the point where I'm disappointed that I made that
sale, chances are I'm going to be having a pretty good year," says Whewell.
The key for any marketing plan, he adds, is that it provides a road map of
where the grower wants to go. The process, he likens to vacationing without
a road map: "Ultimately, you're going to get someplace but is it the place
you really want to be?" asks Whewell. "That's the same thing with
a marketing plan. You need to have a road map and an ultimate destination, that's
your price and the road map on how to get there, those are your time dates."