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Merv Berscheid
Saskatoon Chapter
Merv was born in Humboldt, Saskatchewan and raised on a farm near Lake Lenore. He graduated in 1967 and moved with the family to Tisdale where his family operated a grain and hog farm until 1986. Merv entered into the grain business in 1984 as an agent for Allstate Grain Company and later was employed by Kaptal Grain in Tisdale, Elders Grain in Winnipeg and Continental Grain in Saskatoon. For two years he was responsible for the country operations of the Mustard Division for Continental Grain out of Milk River, Alberta. CGF Brokerage and Consulting was formed in 1997. w w w. g r a i n e w s . c a Grainews Ma r c h 1 2 , 2 0 0 7 11 B Y D E B B I E F U R B E R There's a theory that there are 3 passions behind every successful business: production, finance and marketing. Acclaimed enterprise facilitator, Ernest Sirolli, professes that most people have a passion for 1 of the 3; many have a gift for 2; but rarely does a person have passion for all 3 necessary to succeed in business. Today, farming is big business. Most producers are passionate about production so they devote a great deal of money and time to crop production. Even then, most are willing to pay for consultants and custom services to better their odds. Many love to work the numbers. If not, they hire accountants or financial advisors. Marketing is most often the weakest link, yet paying for marketing expertise is a low priority. "Production pays the bills; marketing makes the money," says Merv Berscheid of CGF Brokerage and Consulting in Saskatoon. "Successful businesses have business plans. Marketing is part of a sound business plan." He suggests beginning by planning crop rotations 2 to 4 years out based on what's best for your own farm, not on commodity prices of the day. Then, develop a marketing plan to meet your cash flow needs. Put it down on paper so that you don't lose your focus. "If you don't have a clear marketing plan set out on paper, you'll react to market prices rather than acting toward your goal," Berscheid explains. Many producers sell at the low end of a rising market because they don't have good market information and a marketing plan. What they do have are bills to pay. Once these obligations have been met, the tendency is to hold on as the commodity price rises. "The key to obtaining an overall above-average price is to sell in increments into a rising market," he advises. "Know your cost of production and be prepared to market the rest when the price hits your target." Waiting for the peak is like trying to hit a moving target. If you have great skill, you'll hit it once in awhile. Most of the time, though, you'll be left holding a half-empty bag, with barely enough to pay the bills, while hoping for prices to go up again. Berscheid says that 9 times out of 10, they won't. The downside of a market is usually fairly steep, so you'll end up selling out of fear that you've missed your shot at the top price. The majority of grain is sold when panic sets in because there are more bills to pay and it looks like there will be no bottom to the market. HOW TO BREAK OUT OF THE CYCLE AND MAXIMIZE RETURNS Your marketing plan will help you break free from this stressful selling cycle. To get started, you need to commit some time and financial resources so that you have current market information at your fingertips and you know exactly what you have to sell. "Marketing is a full-time job that requires attention every day," Berscheid stresses. Gather market intelligence from as many sources as you can, most importantly, unbiased sources. Cash grain brokers and market consultants have no vested monetary interest in your grain. These companies make it their job to monitor world markets, interpret trends and spot potential opportunities for their clients. Many offer daily market updates and commentaries. The same goes for grading your grain. He cannot overstate the importance of getting your grain analyzed by an unbiased source so that you know the quality before approaching potential buyers. CGF has trained staff and is fully equipped to do this. The Canadian Grain Commission offers a sample testing service for producers from its service center locations in the prairie provinces. SGS Canada, with locations in each province, provides an internationally-certified grain inspection service. He gives a couple examples to illustrate this point. A producer thought he had 3 loads of feed-quality peas, which would have been worth $4.50/bu. The analysis done by a potential buyer, indicated that they were feed-quality because the seed coat was unsound. Splitting the peas told a different story and within an hour of showing the picture of the split sample to buyers via their web site listing, CGF had sold the lot for $7/bu. On 4,500 bushels, that's a gain of $11,250. In another instance, the grade analysis on red lentils cleaned with a 9 round hole screen indicated that there was 5% dockage. Cleaning with an 8 round hole resulted in 0.5% dockage. By finding a buyer who could clean it accordingly, the grower realized an additional $2,300 on the sale. Test weight is another quality factor that is frequently miscalculated. To obtain an accurate analysis, you have to submit a sample that is representative of the grain in the bin. Collect this as you load it into final storage after harvest. Use a well-cleaned, odorless 5-gallon pail with a lid. Mark the sample with the bin number, volume and date you binned it. Store the sample in the same environment as the grain, not in a heated area. As a backup should a dispute about grain quality arise, collect a representative sample from the end of the auger as you load your grain in the semi. Place the sample in a plastic bag with the bill of lading, then wrap the whole package with tape and have the trucker sign across the tape to make the sample tamper proof. Effective marketing requires top-notch people skills. "Honor all your commitments and keep on good terms with all potential buyers," Berscheid adds. Communication is crucial. In this day and age, fax machines and computers are excellent tools to gather market information, keep in touch with business associates and expedite transactions. Don't forget about the phone - talk with people about market conditions. Last, but not least, include your partner(s) in marketing decisions - 2 heads are better than one. For more information go to www.cgfbrokerage.com or call 1-800- 667-6378. + Debbie Furber farms near Tisdale, Sask. Quit selling grain - market it! Merv Berscheid says it's a good idea to get your grain analyzed by an unbiased source.That way you know exactly what you have before you contact potential buyers.
Owner CGF Brokerage and Consulting 717-43rd St E Saskatoon, SK S7K 0V7 phone: 306-244-1124
website: www.cgfbrokerage.com
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