Montana fights back against BNSF

[Anonymous]

"My farm has wheat grown as a part of the crop rotation plan....corn, wheat, then plant beans after the wheat is harvested in June and have a short growing season.

I noticed during all of this that the Illinois wheat prices were much lower than those quoted in Montana. Makes me wonder...could there be a conspiracy against Illinois farmers?" mp173

your southern illinois farm produces soft red winter wheat, a low protien wheat used in the production of cookies, crackers, cake, pretzels, while montana is a producer of hard red winter, hard red spring and some hard white wheat (bread wheats). the montana classes are higher in protien and in the pricing of the last several years have carried a premium to soft red (not always true). before calling your farm manager with instructions to switch be aware that soft red gets a higher yield than montana hard wheats due to illinois' higher rain falls....soft red is the proper choice for your farm. it fits the climate and the demand needs of local mills, and handling limitations of neighborhood elevators more closely than hard wheat would.

this is the problem with this thread...none of us know enough about the other fellow's businesss to be telling him what to do.

[MP173]

It's a beautiful thing.

I dont understand why my wheat prices are lower and then here comes a logical explanation. Thanks CBT.

I would never question the farmer about what he is doing. I trust him to do the right thing, since I dont do that for a living.

ed

[MichaelSol]

QUOTE: Originally posted by cbt141

I noticed during all of this that the Illinois wheat prices were much lower than those quoted in Montana. Makes me wonder...could there be a conspiracy against Illinois farmers?" mp173
......
this is the problem with this thread...none of us know enough about the other fellow's businesss to be telling him what to do.

Well, I didn't notice anyone telling anyone else what type of wheat to grow. However, for anyone that cared to read, there was quite a bit of information regarding the importance of the type and quality of wheat and how that related to market price, that no one should have missed the point, even if it was not the point of the thread. In my case, and several others as well, discussions of market price of wheat must always show some care in identifying the type.

3/7 MS: rates on "0113710 grain".

3/7 arbfbe: "Some of the Montana wheat is a variety of hard red winter wheat that is sought after ..."

3/7, MS: "for the grain industry, understanding of market prices, rates, and market timing are keys to profitability, as is a minimal amount of knowledge about where it goes and where you might want to ship it."

3/12, MS: "For instance, taking the Fall of 2003 as an example, and it is fairly typical. Minnnesota farmers were receiving $4.06 per bushel for hard spring wheat. Montana farmers were receiving $3.68 per bushel."

3/13: MS: For instance, at Havre, $4.49 per bushel would be the price received for 15% dark northern spring wheat this week, per the following chart of selected prices. As you can see, quality is a key determining factor of price."

US 1 Dark Northern Spring Wheat
13 pct 14 pct 15 pct
Billings Area 3.42 4.22 4.87
Golden Triangle 3.35 4.15 4.75
Great Falls Area 3.58 4.21 4.77
Havre MT 3.14 3.89 4.49
Southeast MT 3.17 3.89 4.49
Southwest Mt 3.48 4.28 5.18
Minneapolis 4.22 5.00 5.78
Portland 4.38 5.20 5.83

3/13: MS:"That St Paul wheat is a pretty good price right now considering most of it will be used locally in St. Paul and Minneapolis."

3/13, MS: "Ed, if everyone had commodity markets figured out, we could all be Cargill. "

3/14, MS: "commodity markets are complex mechanisms and there are big contracts at fixed or negotiated contract prices moving under the surface of what are, in reality, spot market prices we read in the papers. Crops are often sold in the field at a negotiated price. If you watch the oil market; the spot market for that is above, below, and at the contract market price on a regular basis. People make and lose fortunes guessing the timing of commodity markets, the differential of the spot and contract market, and then of course add in "futures." Not a market for the timid or the uninformed."

3/14, MS: "There is a quality element as well; Japanese buyers like Montana wheat for certain processes. However, most of that is purchased in the field and never shows up on the published markets showing its "market" price."

3/15, MS: "Montana farmers would be receiving as much or more at the elevator than Midwestern farmers (partly because it is generally considered a superior wheat). "

3/12, MS: "One item clear from the postings on this thread is that nobody trades wheat. "

3/19, cbt141:" this is the problem with this thread...none of us know enough about the other fellow's businesss to be telling him what to do."

I have to admit, affer a couple of weeks of careful references to wheat type, and pointing out significant differences in market price even within a wheat type, depending on protein content, I could not figure out what Ed was talking about in complaining that Montana wheat was selling higher than Illinois wheat. Not a lot of soft red or white in Montana and not a lot of hard red in Illinois. Ed's apparently sarcastic remark about "a consipiracy against Illinois farmers" did not add any illumination to his query. I was left with the same reaction as his comments about how wheat barge traffic in Spokane, Washington affected grain rail rates: "what on earth is this man talking about NOW?"

Unlike Ed , I could not locate a market quote of comparable wheat types and so I let the comment pass. But I now see that, unlike Ed, I was looking for comparable wheat types.

I now understand that, repeated specific references to type and quality notwithstanding, Ed did not know what he grew on his own farm and that this type of wheat represents a different pricing mechanism, i.e. a different "market," than what was discussed primarily on this thread.

However, reiterating, I don't think anyone on this thread, which was about railroad shipping rates and captive rail markets, had much to do with recommending what people grow in Illinois, nor for that matter, Montana, but rather what it cost to ship their product based upon captive pricing practices.

Best regards, Michael Sol

[gabe]

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by CSSHEGEWISCH



Nothing ruins a railroad like a BEANCOUNTER.

Have you ever heard the story of Jack and the Beanstalk? Well, there are a few accountants out there with nothing on Ol' Jack...

Just ask Mr. Ebbers...or check in at ENRON...lol...

We don't need no stinking beancounters....

LC

Accountants (beancounters) are not the problem and are probably more of a necessity. The problem in the cases cited above was massive fraud by the perpetrators aided in part by a lack of due diligence by more than a few people.

Try to see how long you can last in operating a business other than a sole proprietorship without any accountants unless you like paying the IRS more than necessary.

Accountants are similar to lawyers. The client needs beware of how much rope he gives either one...

LC