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Prairie Grains is the official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain Growers Association,
South Dakota Wheat, Inc., and the Minnesota Barley Growers Association.

Grain marketing still a foreign language to many

Tim Dufault • Crookston, MN
MAWG President

My niece takes orders at Gateway Computers in Sioux Falls SD, which makes made-to-order computers. She got a call several months ago from a 92-year-old man who ordered a computer. That struck me: if a person can learn computing at 92, then can’t we learn more about marketing at 42, 52, and 62?

As a wheat grower group, we have and will continue to be successful in influencing issues that affect us, including more funding for scab research, farm economic assistance at the state and federal levels, and keeping the heat on for federal crop insurance reform and better grain trade policies.

But there’s also a certain amount of personal responsibility. The majority of farmers in this country don’t know their breakeven costs, and grain marketing is still a foreign language to many. Domestic and foreign policies can’t be blamed for that.

This winter, make it a point to do something about it. Don’t just sit on your grain and hope the market goes up. Don’t just put your grain under loan and forget about it until your loan matures. Don’t base your marketing on when you see your neighbor’s trucks are moving, or how much snow is in front of the bin.

Most local elevators have someone well-versed at marketing: call him or her up and make an appointment to sit down and talk about different strategies. If that’s not possible, talk to another local expert: your county extension educator, farm business management instructor, or what have you. Take a class at your local community college. Attend a marketing meeting. Join or start a marketing club (In fact, the MN Wheat Council and MN Department of Ag are teaming up to hold meetings on this very subject Jan. 5 and 6 in Crookston, Roseau, and Fergus Falls).

If marketing’s not your thing, subscribe to a marketing advisory service. If cost is an issue, ask for a discount or a free trial. You negotiate on equipment; why not marketing services? If we all spent the same amount of time and fervor on marketing as we did learning about LDPs, we’d be better off.

That’s my parting shot as president of the MAWG. I have enjoyed serving the members of the MAWG (if you’re not a member yet, what are you waiting for?) and wish new MAWG president Pete Kappes of Ada the best of luck.

Amendment E: The ag business aftershock in South Dakota

By Rick Vallery • SD Wheat Inc.
Executive Director

As South Dakota agriculture sifts though the aftershocks of Amendment E, the realitiesof how this constitutional amendment will work and how much it encompasses is becoming apparent.

The amendment was brought to voters as an anti-corporate versus family farming issue. It passed 59% to 41% majority vote. While proponents claimed that the amendment would save SD from the "pollution of corporate farming" and used large hog confinements as examples, in reality it only changes the way SD producers can organize their business structure.

At the present time it appears that only sole proprietorships, general partnerships, and existing family farm corporations may be used in the business structure.

Another ramification: under the amendment, certain contracts with corporations will no longer be legal. Time will tell if SD can close its borders and tell others to stay out.

Four Amendment E after-effects to note:

1) All proposed agricultural limited liability corporations and partnerships have been stopped dead in their tracks for now. A number of firms who work with these types of structures are telling their agricultural customers to take a wait-and-see attitude.

2) Financial institutions are currently going though their portfolios to determine which of their agricultural customers will be affected by Amendment E. Their concern lies with the liability of the institution in working with customers who might not have their business structured legally under Amendment E.

3) The outcome of this amendment places a heavy burden on state government. Presently, the state is examining ways to determine how to contact agricultural producers, their business contracts, evaluate their business structure, and establish how all of this relates to the passed Amendment. While this may seem costly, (there are approximately 225,000 in-state and out-of-state landowners) it is now constitutionally required. We can take this further because the Amendment did not address the present 13 exemptions that some agricultural structures may use. Another problem: how does state government contact producers who do not own property but might have a contract with an out-of-state business structure to conduct business? An additional concern is the non-profit business structure — how will that be affected by this Amendment?

4) This issue has resulted in a deep division within agricultural organizations in South Dakota and the need for these member organizations to become more accountable to their members.

It remains to be seen whether this amendment will be helpful, hurtful, or somewhere in between. In the meantime, the lawyers are waiting and debating.

Grain Growers skeptical about Environmental Treaty

Mark Gage • Page, ND
NDGGA President

The United States, along with 160 nations participating in the Climate 2000 debate in Buenos Aires in November, voted to endorse an accelerated action plan for the implementation of a climate treaty to reduce greenhouse gas emissions on a global scale over the next 13 years.

There’s good reason for grain growers to be concerned about this treaty: we could very well be impacted by increased regulatory burden and higher production costs compared to other countries.

When you join the North Dakota Grain Growers Association, you also automatically become a member of the National Association of Wheat Growers, which has a strong presence on environmental issues. The NAWG is working with the USDA and other farm organizations to make sure that US commitments under the treaty do not put American agriculture at a world-competitive disadvantage.

Although this treaty was signed by President Clinton, member’s of the US Senate and other elected US officials recognize that improvements to the treaty must still be made before it can be brought to the Senate to become law.

One such component is the Administration’s commitment to reduce emissions by developing nations. Emission reduction is a concern to the ag community, because of the possibility of developing nations incurring new trade advantages by not participating like other countries such as the United States. Further, the US ag sector should receive due credit for management practices that already contribute to greenhouse gas reduction.

With strong membership support, the NAWG will continue to monitor this issue and be at the forefront on other environmental issues that affect grain growers in North Dakota and nationwide.

1998 US spring wheat quality something
to talk about

Bruce Hamnes • Stephen, MN
MWRPC Chairman

The 1998 hard red spring wheat crop in the United States generally is something we can be proud of, with higher protein, low damaged kernels, low sprout, much less scab, good milling properties and good baking performance.

So how can we go about telling over 100 countries around the world about this, to encourage them to buy our wheat over that from competing export countries? One key tool is the "1998 Crop Quality Report," published by US Wheat Associates, the wheat growers’ foreign market development organization funded in part by the Minnesota wheat checkoff. USW has been publishing an annual Crop Quality Report for over 10 years.

The report, with detailed quality data on all 6 classes of US wheat, is distributed to overseas buyers and millers through crop quality seminars put on by USW in various locations throughout the world. The report urges overseas buyers to use the quality parameters in the report to assist them in specifying quality requirements in their purchase contracts.

In addition to crop quality, speakers also address the world supply and demand situation, and questions about how to buy US wheat, from credit options to the best means of transportation.

Americans consume less than half of the wheat US farmers produce. Further, our country’s population accounts for less than 5% of the world’s potential wheat consumers. That’s one of the reasons why it’s important to tell prospective wheat buyers about our wheat, in part through the Crop Quality Report. And that’s why wheat export market development and promotion is a major Council program focus.