Marketing and Long-Term Relationships

There is nothing more important, in my opinion, in our industry than the relationships that we build and the integrity that they are constructed upon.

Over the past couple of years, we have watched an extreme drought drive prices to never before seen levels, and then watched that pendulum swing hard in the opposite direction with a really great crop the following year across much of the Prairies.

In the drought year, our industry had the opportunity to see what we were made of, and to witness the resilience of both the farmer and the end user. With virtually no crop produced on most of the farms in Western Canada, buyers were forced to reach out beyond their normal draw areas to find supply, and often to make do with quality that they wouldn’t normally be able to use. Many of the millers in North America, who are supplied largely by the farmers in Western Canada, were forced to look offshore for supplies to keep the mills running and the store shelves stocked with products produced by our facilities.

Unfortunately, along with the showcasing of positive qualities, we also experienced the worst of the negatives that can happen in a year like that. While the number of producers who decided to walk away from contracts to chase higher dollars was relatively low, it was very upsetting to see customers throwing away long-standing relationships for a few bucks. On the other side of that coin, we also saw buyers not only issuing buy-ins for contracts to producers, but in many cases adding insult to injury by tacking on high administration fees to these invoices.

Now don’t get me wrong, these fees are usually (not always) written into the contracts that are signed by both parties, but when the situation is as dire as it was, relationships could have been somewhat salvaged by at least waiving the admin fees, rather than kicking guys when they were down. Now, the same can be said for the unscrupulous producers who walked on their contracts to chase higher prices elsewhere. Those that chose to ignore their signed obligations forced buyers to replace those grains with much more expensive products. Now some will argue that our side of the market can afford it, but that’s not the point. Agriculture has always been the one industry where relationships matter, and a person’s word and a handshake count for something … at least that’s the way it used to be.

Fast forward to March of 2023, and we have just seen the other side of that coin. A Saskatchewan company has just decided to cancel grain contracts with a group of producers, a decision that will cost those farmers tens of millions of dollars. I am sure that by the time you are reading this, there will be much more information come to light, but as I am writing this, the reasoning behind their “force majeure” stinks to high heaven. When the drought hit two years ago, would this buyer have been OK with their contracted suppliers cancelling their contracts? I think not. But when the market goes the other way, they figure they can just walk?

You may be asking, “what does all of this have to do with marketing?” Maybe just a reminder that we are all in this together, and my desire to get this industry back to one where integrity matters.

Until next time…