Nature of Grain Trades
Grains have a tendency to be viewed as ordinary commodities, their trades best left in corporate hands and handled in bulk. What farmers produce is mostly pre-sold, consolidated at country-elevators, moved to larger coastal-terminals by rail, and shipped in bulk-vessels to export-destinations. It is often overlooked that unlike ores or minerals that the earth provides, farmers have leeway in what and how they produce -- not quite like manufactured goods but still different than other natural resources, with traits that lend themselves to specialization and direct-sales.
There have been enormous advances in agricultural sciences, particularly in crop-genomics, to cultivate highly specialized seeds for crops with specific attributes. Moreover, farming knowledge has greatly advanced to choose what to grow on particular soil conditions, and how to grow to achieve desired crop attributes. New and highly advanced farm-equipment allows us to seed and apply inputs (fertilizers, pesticides, other chemicals) with precision. Latest sensing technologies allow us to monitor crop-growth, take remedial measures, and harvest for best crop-yields.
But all this advancement seems to be directed at yield-increases, more of what we already grow, not to specialization in what we grow or how to grow to achieve particular crop-attributes. Producers are free to make their crop-choices but are bound by the industry-structure they face, captive to grain-companies and the staple-crops they focus on to handle in bulk. Producers have limited options in the way of sales-channels, and are largely captive price-takers, thus can only increase their revenues by growing more of what local grain companies are willing to buy.
The only way to break out of today’s "grain-cage" -- staple-crops, bulk-systems and low-margins -- is further specialization. The agricultural knowhow together with all the advanced farm-technology is there for our producers to grow a much broader range of crops, including specific types and grades of today’s staple-crops -- be it wheat, barley or canola. If the producers could reach out to end-markets for higher-value, specialty crops with specific attributes, they would. But neither the sales-channels, nor the logistics services to fulfil direct-sales to buyers’ requirements, are in place.