Will the money come in fast enough this fall?

Make a list of bills coming due, expected crop sales, and make use of cash advances, says market expert

With bills coming due, will you be forced to empty your bins 
before you would like to?
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With grain prices down sharply this year, a marketing plan is especially critical, says a provincial crop market analyst.

“First, assess your financial position,” said Neil Blue. “Start with a quick cash flow, which is the money inflow compared to money outflow. List the amounts and timing of bills, loans, and personal living expenses to be paid month by month (or week by week if fine tuning is needed).

“To counter those payments, list expected income from all sources, including potential farm produce sales and any personal income.”

Depending on the results, producers may want to consider ways to speed up cash inflow or slow outflow, and perhaps let creditors know “that you are working on the situation,” said Blue.

Put the marketing plan into action by estimating the quantity and quality of inventory to sell, he said.

“As well as checking with your local buyers, consider using the Canadian Grain Commission’s Harvest Sample Program as a free way to get a base grade on your representative crop samples.”

Producers should also consider the merits of storing crops until prices improve.

“Some crops may have strong premiums for contracting into forward delivery periods while other crops may not offer any such premium,” said Blue. “After reviewing market outlooks, you’re as good a judge as anyone as to which crops have potential for price improvement and which crops are likely to provide flat prices at best.”

Producers should look at all potential market outlets for their crops.

“Include processors, feeders, and any other market or agent,” said Blue. “A crop damaged in one respect may still have desirable characteristics to certain buyers. On the other hand, you may have some high-quality crop that will command a premium in the market. For example, during August, some buyers raised their malting barley price bids and some strengthened their premiums for wheat protein.”

Blue suggests using the Advance Payments Program.

“To help with cash flow needs, a cash advance is available through the Canadian Canola Growers Association by using farm produce as security,” he said. “The maximum advance is $400,000, of which the first $100,000 is interest free.”

Finally, Blue recommends making a list of potential buyers for various crops.

“Make reference notes as you experience positives and negatives in your marketing. Also, I have a good start at a crop marketing contact list and it’s available on request.”

Blue can be reached at [email protected] or 780-422-4053.

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