Brennan Turner recently asked farmers if they’d prefer extra bushels but lower prices, or sky high prices but a poor crop. Not surprisingly, farmers would prefer inventory, likely in part because Canadian farmers are quite comfortable with storing grain. Of course, the yields and volumes coming off fields this fall has left many farmers without proper storage, and Turner, president of FarmLead, is a bit nervous about all the grain sitting on the ground.
Storing grain on the ground, even if covered, is not ideal and Turner’s concern about quality loss and spoilage is a valid one. Still, bins can only be put up so quickly and not everyone has a bagger. What does it mean for markets? Elevators will take your grain, of course, but as Turner says, grain companies are happy to store your grain – for a fee. “Accepting lower basis levels is the equivalent to paying someone to store your grain,” he says, in his FarmLead Breakfast Brief.
In the interview above, Turner and Lyndsey Smith also discuss the pulse markets, where some big sales from Australia ahead of Ramadan and nice crops in other parts of the world may mean Saskatchewan farmers may be storing these crops too (though we’re sure they’ll be in bins).
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