As we close 2022-Q2 with this compendium of articles, we would also like to outline our priorities for 2022-Q3. In view of our growing following and the feedback we get, we feel we are on the right track in paving the way for more trade-facilitation efforts to come. In the meantime, we identified three domains where we intend to focus on this coming quarter, but we welcome your comments and suggestions.
Farm-Profiles: This is a vital piece of our agenda to promote the Prairie region, thereby your individual interests, to global audiences. The world does not know how advanced our farms are, let alone relate to them as primary-sources where they can buy a huge variety of quality crops that can be shipped to them in containers, and if warranted, in accordance with identity-preservation rules-and-regulations.
You can see what a farm-profile looks like on our website, our demo-profile and a real one on Optimum Grains. This will take little effort on your part and can be as brief or elaborate as you would like. We are aiming to post hundreds of profiles this year, thus we urge you to consider and step forward to showcase your farm. If you have any privacy or other concerns, please contact us and we can discuss them.
Producer-Meetings: We held two virtual-townhall meetings this past month – you can view a recording of the last one on our website. The virtual-venue was not our first choice but there were COVID-restrictions in our way. We will hold as many more of these virtual-meetings as there is demand. You can register on-line; when we reach a quorum of 20-25 registrations, we will announce the date and the time.
However, we hope to switch the venue to real-settings as soon as we can, townhall or coffee-shop gatherings. If you want to volunteer to organize one in your area, we appreciate hearing from you. In the meantime, we are always open to individual discussions, which we find very useful from recent experience. Please call us or send us an email for one-on-one discussions – we look forward to hearing from you.
Trade-Forum: You might have noticed that there is a section on our website under this title but has not been utilized yet – which we take the blame for since we have not given it much attention so far. But now we are going to revamp this page to receive your comments or suggestions – we encourage you to participate to turn this tool into a dialogue-box, as we feel it would be very useful in guiding our efforts.
Also, our Facebook page has been getting quite a bit of attention, with dozens of regular followers – we encourage you to join our page, not only for endorsement but also discussion. In this regard, we take much of the blame for not being as active as we should be in promoting exchange of ideas or new concepts. We will pay more attention to this platform and look forward to seeing you on our page more often.
Recasting our Global Image
We are the world’s 5th largest grain exporter and known for the quality of our grains, but the world, at least outside North America, knows us through our bulk-trades. What farmers grow is mostly sold to grain companies, which in turn sell them to their counterparts in overseas markets. By the time crops reach end-users, there is little recognition of the source, let alone where and how they were grown.
When corporate buyers across North America source grains directly, they inspect the farms they buy from and test their crops. We take it for granted that all grain-buyers have the same luxury, but they do not, as most have little familiarity with our farm-economy. If we want to sell direct to overseas markets, as the exporting nation, the onus is on us to promote our virtues and convince buyers of the quality of our crops.
Challenge: We face a formidable task in recasting our global image as an advanced grain-economy, open to direct-sales with grain-handling and container-logistics capacities in place. But there is a tendency to take all this for granted, believing that the world knows all they need to know about our grain-economy. We have difficulty convincing authorities of this reality, let alone the need for funding for this purpose.
In our first article this year (#11), we presented a framework to recast our global image in five parts – advanced-farms, research-capacity, crop-variety, quality assurance, and logistics-services. We are now adding a 6th part on “sustainability”; little known to everybody, but instead of worrying about its carbon-emissions, our grain-base has now become not only carbon-neutral, but in fact, a carbon-sink.
Funding: Conceptually, all the elements are there to extol the virtues of the Prairie grain economy to global audiences. But we need resources – direct funding and/or partners – to flush out all these elements in a presentable fashion, displayed as a core-tab of the Prairie Grain Portal. This must become our “face” to overseas buyers, to convince them of our virtues to engage in trading or sourcing relations.
Initially, we thought the need for this would be evident to authorities if they had any desire to achieve a paradigm-shift to direct-sales. And indeed, we seem to have brought some officials on side, but still, we need support and backing from the producer-community that direct-sales are in their best interest, and that the image-recasting we are talking about is an essential promotional piece of the trade-puzzle.
Participation: An essential element of the framework we developed is production-capacity; in this vein we want to rely on farm-profiles, which can only be developed with producer participation. We can get away with a few profiles, but the big-bang effect is going to come from the larger profile-database, which we will incorporate into our Virtual Prairie Grain Mall – virtual but real window into our grain-economy.
We also encourage all interested in our mission to express their support for funding this crucial task of recasting our global image – through associations they belong to, or through their political representatives. We will provide the tools for these expressions-of-support in the coming weeks – online surveys and email campaigns.
Need for Market Research
In several articles, we tried to bring attention to one of the main weaknesses of our grain-economy, the lack of market research to understand end-market dynamics, driven by consumption and processing trends. Perhaps this not surprising in a system that has been dominated for so long by bulk-trades. We tend to leave this to grain-economies, to do their homework and give signals to the production sphere.
In direct-sales across North America, end-buyers give adequate market signals to producers, but it is unrealistic to expect the same from overseas buyers who know little about our grain-economy. If we are going to be successful in direct-exports to overseas, we have no choice but to shoulder this burden, which must be funded by producer-associations and public-agencies in the interests of the grain-economy.
Global competition: Before even getting into end-market research, we must also recognize the need to understand the other production regions we are competing with. By ignoring other grain-regions, we have failed to grasp how much danger our bulk-trades face in global markets. This is the push-factor away from bulk-channels that we have been ignoring to our peril, one that producers are just waking up to.
The most important region in this regard is what we call New Grain Belt, from Ukraine, across Central Asia, to China, two huge land-masses across the north, Russia and Kazakhstan. The other region we must pay attention to is EU, highly successful in not only crop-specialization but also containerization. Also, we must keep our eyes on the US, which might follow us with the same paradigm-shift to direct-sales.
Target Markets: Our trade facilitation efforts are targeting primarily the Asia Pacific region, though in time we intend to extend our reach to other parts of the world. Here, by far the biggest market is China, but in the state that our trade relations are in, we cannot count on it. But there are two advanced economies in this region, Japan and Korea, and five other less developed ones that are worthy of attention.
If we are targeting a country with direct-sales and want to assess its export potential, we must start with consumption and production volumes, in the aggregate and by crop – the difference being what they import. Some history on these volumes would also help us assess net import/export trends, important factors to consider in deciding how much effort to devote in pursuing export prospects to that country.
Research Needs: As important as these starting-points are, the market-research trail in pursuit of direct-sales opportunities does not end there. Firstly, we must develop a better understanding of demand-drivers behind consumption trends. Second, we must understand the supply-chains and industry-structures raw grains go through before they get to final consumers – or animal-stocks in the case of feed-chains.
The case we presented recently on China’s wheat-flour supply chain (Article#20 and background report) is the model we would recommend for market studies, to target buyers and assess their import prospects. Soon, we will post a similar study on China’s animal-feed chain and its grain needs – hopefully many more will follow.