News

News SEED SMARTS How to Stay Grounded During Changing Market Conditions
Mar 16 2018

How to Stay Grounded During Changing Market Conditions

This past year’s market access issues for Canadian pulse exports to India illustrate one of the biggest challenges for today’s farmers, says veteran farmer Alex Hamer.

“There are just too many factors you don’t control when it comes to marketing,” he says.

“You can make hundreds of thousands of dollars’ difference on the farm just based on your decision to sell or not to sell.”

Alex, who farms with his wife Debbie in Central Butte, Saskatchewan, has farmed now for more than 40 years. In that time he has experienced major changes to the way farmers market their crops, especially cereal crops since the closing of the Canadian Wheat Board.

“It used to be we didn’t have any choices there, we grew it and got what we got. Now we can make the decision but sometimes they’re not good ones,” he laughs.

Having grown lentils and canola for about 30 years now however, Alex is also used to doing his own marketing, although the experience doesn’t necessarily make it easier.

What has made it easier is learning a couple lessons about marketing.

Don’t get too frustrated about changing market conditions

The current situation for Canadian pulse exports to India is especially frustrating because there is general agreement that the restrictions put in place by the Indian government are reflective of the country’s domestic politics rather than any scientific safety concerns or international trade agreements.

In this type of situation, there’s not much farmers can do, Alex says.

“Not getting too upset about the marketing is important for your own health,” he says. “If you start to figure out every dollar you’ve lost because you didn’t sell today or haven’t contracted, you just wouldn’t survive very long.”

Get information from trusted sources

Alex does get some marketing information from trusted sources. He follows some market reports but more importantly, keeps in touch with a handful of trusted grain buyers who will text him daily prices.

“You build a trust with some of the companies.”

Pay attention to the longer-term market trends

“It isn’t rocket science – with the prices as good as they had been the last couple years, the rest of the world was looking at that and saying, ‘hey we gotta grow some of that too,’ and as soon as that happens you flood the market. We’ve done it before with everything.”

“That’s why you don’t grow all one crop and put all your eggs in one basket. It would be easier if you could, but it just doesn’t work that way.”

“Make sure you can cover for some bad times. If you think it’s all going to be good you’re not going to be doing it very long.”

– Alex Hamer

Manage your expectations for farming

These marketing challenges aren’t deterring a new generation of young people from getting into farming and taking over the family farms, Alex has noticed. Two of his own three daughters are married to farmers.

“I neither encourage nor discourage this,” he laughs.

Today’s technology has made some facets of farming easier in many ways, he says, but the challenges are still there, just in different forms.

For example, beyond the uncontrollable marketing challenges are the rising costs of inputs and equipment.

“Everything is so expensive these days that you’re really sticking your neck out every time you move and you don’t have a lot of room for error.”

Alex’s advice for younger farmers is to be realistic about expectations.

“Make sure you can cover for some bad times. If you think it’s all going to be good you’re not going to be doing it very long.”