Table of contents

    1. Seven Steps to Better Marketing
    2. Understanding supply factors for agricultural products
    3. How demand and supply determine market price
    4. How exchange rates affect agricultural markets
    5. How interest rates affect agricultural markets
    6. How to use charting to analyse commodity markets
    7. Agriculture marketing clubs
    8. Commodity futures markets
    1. Economics and Marketing – Choosing a Commodity Broker
    2. Margin on futures contracts
    3. Options on futures – an introduction
    4. Using hedging to protect farm product prices
    5. Canola futures contract
    1. Introduction to crop marketing
    2. Basis – How cash grain prices are established
    3. Grain marketing decision grid
    4. Price pooling – How it works
    5. Crop contracts
    6. Grain storage as a marketing strategy
    7. Using producer cars to ship prairie grain
    8. Using frequency charts for marketing decisions
    9. Western Canadian grain catchment
    10. Barley and wheat marketing resources
    11. Wheat basis levels
    12. Wheat quality and protein matters
    13. Wheat pricing considerations
    14. Marketing oats in Canada
    15. US Crops – Where Are They Grown?
    1. Introduction to livestock marketing
    2. Understanding and using basis levels in cattle markets
    3. Forward contracting of cattle
    4. Understanding dressing percentage of slaughter cattle
    5. Understanding the cattle market sliding scale
    6. Predicting feeder cattle prices
    7. Breakeven analysis for feeder cattle
    8. Farm gate values for farm-raised vs purchased calves
    9. Wool marketing in Canada
    10. Marketing feeder lambs
    1. Turf and forage seed trade companies active in the Peace Region
    2. History of creeping red fescue production in the Peace River Region
    3. Alfalfa seed marketing in Canada
    4. Forage seed marketing
    5. Marketing creeping red fescue
    6. Faba bean
    7. Marketing compressed hay
    1. Agricultural Marketing Glossary – A, B
    2. Agricultural Marketing Glossary – C
    3. Agricultural Marketing Glossary – D, E
    4. Agricultural Marketing Glossary – F, G
    5. Agricultural Marketing Glossary – H, I, J, K
    6. Agricultural Marketing Glossary – L, M
    7. Agricultural Marketing Glossary – N, O
    8. Agricultural Marketing Glossary – P, Q, R
    9. Agricultural Marketing Glossary – S
    10. Agricultural Marketing Glossary – T, U
    11. Agricultural Marketing Glossary – V, W
    12. Other Marketing Related Glossaries

Introduction

Farmers may be tempted to wait for higher prices before making a crop marketing decision. However, waiting can end in disappointment because prices can fall instead of rise, with much of the crop eventually marketed at the lower end of the price range for the year.

Using price frequency charts can be a good decision-making resource for farm marketers. A frequency chart shows how often, or what percentage of the time, a price for a crop has reached a certain level. Price frequencies are a good way to see prices in perspective over time.

Frequency charts

Cash prices are just one consideration when making marketing decisions. Price frequency charts are a tool that can help make marketing decisions by adding a historical perspective.

Below are cash price history and price frequency charts for No. 1 canola, wheat, feed barley, and yellow peas from 2013 through 2022. These charts give a review of how prices moved over a 10-year period and the frequency of price levels. The price rise to historically high levels in recent years results in a higher price average as shown in the horizontal line of the cash price history charts. Those higher prices may skew one’s opinion of what is a high price. 

The second chart for each crop shows price frequencies over the period 2013 through 2022. Those price frequency charts provide another valuable perspective of that price history.

Figure 1. Canola prices, Central Alberta 2013 through 2022

Canola prices

Figure 2. Canola price frequencies, Central Alberta, 2013 through 2022

Canola price frequency

For example, the second bar of the canola price frequency chart shows the percentage of time over 10 years that the price of canola was $425/tonne or more. During the 10-year time period, canola sold for at least $425/tonne ($9.64/bushel) 84% of the time.

The third bar shows that canola sold for at least $500/tonne 32% of the time during the 10 year period. Towards the right side of the chart, a price of $950/tonne or higher was available only 6% of the time during those 10 years.

Cash costs of crop production have risen during this 10-year period and that fact must be considered in marketing decisions. However, the market does not respect the need for producer profit. Therefore, together with other factors of market analysis, producers should consider the frequency of price occurrence at the various levels in making price judgements.

Figure 3. Milling wheat (Hard Red Spring) prices, Central Alberta 2013 through 2022

Milling wheat price

Again, the milling wheat prices have been relatively high lately, and that may skew one’s opinion of a “good” price. Knowing one’s costs of production and being able to calculate a breakeven price per unit of production (for example, $/tonne or $/bushel) based on expected yields forms the base price required to begin making a profit. The historical price frequencies provide perspective to the question of “good” price.

Figure 4. Milling wheat price frequencies – Central Alberta, 2013 through 2022

Milling wheat price frequency

Figure 5. Feed barley prices, Central Alberta 2013 through 2022

Barley prices

Figure 6. Feed barley price frequencies, Central Alberta, 2013 through 2022

Barley price frequency

Figure 7. Yellow pea prices, Central Alberta 2013 through 2022

Yellow pea prices

Figure 8. Yellow pea price frequencies 2013 through 2022

Yellow pea price frequency
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