8/3/2019 Tips Selling Pulses

1/2

1

Tips for Se l l ing Pu lses

When to sell

The timing of your sales decisions should be heavily influenced by two basicbusiness considerations:

At which price have you reached a return to your investment in thecrop?

Add up all your costs per acre for each crop to obtain a gage as to when a salebecomes profitable. It is often a good idea to sell at least a portion of the crop whenthe price provides a profitable return per acre.Remember, no one ever went bankrupt while booking a positive return.

Example: Cost Calculation to establish a break-even point(This example does not include fixed costs)

SaskatchewanSpring wheat Feed Malt Feed Feed Polish Argy H.T. Field Lentils Chickpeasinitial price wheat Barley Barley Oats Canola Canola Canola Peas

low TFA

In store Vancouver

Futures USFunds $100.00 $117.00 $300.00 $300.00 $300.00

Premium USFunds -$20.00 $0.00 -$15.00 -$15.00 $40.00

Canadian Dollar 0.8178

Freight $5.00

Farmgate metric tonne $104.52 $80.00 $122.00 $285.00 $285.00 $340.00Farmgate per bushel $2.84 $2.18 $3.00 $2.44 $2.00 $6.00 $6.00 $7.71 $3.25 16.00 30.00

yield 32.0 60.0 50.0 75.0 100.0 25.0 35.0 30.0 50.0 1000.0 1000total 91.00 130.60 150.00 183.00 200.00 150.00 210.00 231.33 162.50 160.00 300.00

var. costs per acre

SEE 11.00 8.00 9.00 9.00 8.00 9.00 12.00 18.00 24.00 0.00 0.00

fertilizers nitrogen 40.00 40.00 20.00 35.00 35.00 40.00 40.00 40.00 22.40 22.40phosph. 9.25 9.25 9.25 9.25 9.25 9.25 10.00 10.00 10.00 10.00 10.00potasium 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70sulphur 4.20 4.20 4.20 2.80 4.20 4.20Micros

Cleaning 30total 61.95 58.95 39.95 54.95 53.95 64.15 67.90 73.90 38.50 38.30 68.30

chemical preseed

In crop 20.00 20.00 20.00 20.00 7.50 25.00 30.00 25.00 25.00 25.00 25.00Pre-Hvsttotal 20.00 20.00 20.00 20.00 7.50 25.00 30.00 25.00 25.00 25.00 25.00

Othercrop insurance 2.94 2.70 2.70 2.70 3.25 4.84 4.84 4.84 3.15 4.84 4.84fuel oil lube 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50machinery repairs 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00building repairs 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Custom work 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00total 22.44 22.20 22.20 22.20 22.75 24.34 24.34 24.34 22.65 24.34 24.34

total direct 104.39 101.15 82.15 97.15 84.20 113.49 122.24 123.24 86.15 87.64 117.64

Contribution over var. -$13.39 $29.45 $67.85 $85.85 $115.80 $36.51 $87.76 $108.09 $76.35 $72.36 $182.36

8/3/2019 Tips Selling Pulses

2/2

2

Saskatchewan Agriculture and Food (SAF) produces an excellent Special Crops

Crop Planning Guide every year. However, do make sure that you customize theguide with your own cost data before it becomes useful to your purposes.

What are your cash-flow needs (taking into consideration all crops inyour rotation)?

Timing of sales often depends on when cash is needed throughout the year. Forexample, if the seasonal price development shows that price peaks are expected inSeptember and March, but cash is going to be needed in December, the Septemberprice for all commodities grown and still unsold should receive thoroughconsideration. That is, if cash flow is needed and there is a carrying charge visible in

the price of one commodity but not the other, the commodity without the carryingcharge should receive more consideration for a nearby sale.For example, in July 2005, deferred canola and wheat prices are showing a carryingcharge relative to nearby prices, but peas do not. Therefore, if one product needs tobe sold peas should receive the heavier consideration for a nearby sale.

What to watch once the sales decision has been made

Once the decision to sell has been made, a written contract should be drawn up toprotect the price that was agreed upon. The following details must be covered ineach contract to make the effort worthwhile by fixing the variables for the seller:

Price Quantity sold (with a delivery tolerance at contract price) Quality sold (and what type of certificate determines the quality) Delivery point Delivery period The inclusion of an Act of God in production contracts The specification of carrying charges in case of late shipment

(storage fee & interest) The specification of interest charges in case of late payment Discount for lower grades (if applicable) Who owns the dockage?

Make sure your contractual partner is sound and preferably licensed by the CGC.This may narrow your choice of buyers, but also may save major worries later on.Alternatively, base your sale on cash against delivery (CAD) terms.