Which buyer actually pays more, after freight
The highest bid is regularly the worst deal. Put in what each buyer is paying, how far the haul is, and any drying charge or dockage, and this ranks them by what actually lands in your pocket.
Drying and dockage are optional. Leave them at 0 if the grain is dry and clean, or if every buyer would charge the same. The shrink calculator works out a drying charge per tonne.
| Buyer | Bid | Distance | Freight | Drying and dockage | Net price | Net on the load | Versus best |
|---|
Keep these bids in GrainPositionFree. They go into My bids with your freight and the day each was typed, so the next offer lines up against them.
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How the freight number works
Freight here is a rate per tonne, or per bushel, for every hundred kilometres or miles. A haul of 65 km at $18 per tonne per 100 km costs $11.70 a tonne. That comes straight off the bid.
If you hire trucking, use what you’re quoted. If you haul yourself, the honest rate includes fuel, wear and your own time, which is the part most people leave out and the reason a long haul for a few extra cents so often loses money.
Drying and dockage
If one buyer charges more to dry, or you expect them to dock harder, put it in that buyer's row. Drying is a charge per tonne, or per bushel, and comes straight off the bid. Dockage is a percentage of the weight, so it costs you that share of the bid: 1.5% dockage on a $662 bid is $9.93 a tonne.
The net price is the bid, minus freight, minus drying, minus the bid times the dockage percentage. Put in what you expect from each buyer; only the settlement tells you what they actually took.
This still leaves out things no calculator settles: grade calls, wait times at the pit, and how quickly each buyer pays.
Once you have signed with a buyer, the contract still has to be tracked: every load against it, and the settlement checked when it comes (how to track grain contracts). The settlement checker shows what the buyer actually took off.
A worked example: the highest bid comes last
The sample numbers loaded above are four canola buyers around a farm near Brandon, with trucking at $18 a tonne for every 100 km.
| Buyer | Bid | Distance | Freight | Net price |
|---|---|---|---|---|
| Viterra, Brandon | $662 | 65 km | $11.70 | $650.30 |
| Richardson, Elie | $655 | 42 km | $7.56 | $647.44 |
| G3, Glenboro | $651 | 28 km | $5.04 | $645.96 |
| Cargill, Portage | $668 | 160 km | $28.80 | $639.20 |
Cargill bids the most and nets the least. Its bid is $6 a tonne above Viterra's, but the extra 95 km costs $17.10 a tonne in trucking, so on a 30 tonne load it pays about $333 less. The closest buyer does not win either: G3 is the shortest haul and still comes third.
Now say you expect Viterra to take 1.5% dockage and the others none. That is $9.93 a tonne off, Viterra's net falls to $640.37, and it drops from first to third, behind Richardson and G3. On a 30 tonne load it is about $212 less than Richardson.
These buyers and figures are illustrations, not current bids.
A rule of thumb for the cab
Divide 100 by your freight rate. At $18 a tonne per 100 km, every extra dollar a tonne of bid pays for about 5.6 km more of haul. So a buyer 50 km further away needs to bid roughly $9 a tonne more just to break even. If the difference in bids is smaller than that, the nearer buyer is the better deal.
Working out your own freight rate
If you hire trucking, the quote is the rate. If you haul your own grain, the honest rate is harder, and it is usually higher than people assume. Count:
- Fuel for the trip there and the trip back. The truck comes home empty, but it still burns fuel.
- Wear on the truck and tires, per kilometre.
- Your own time, or the driver's wages, including the wait at the pit.
Add those up for one trip, divide by the tonnes on the truck, then scale it to a rate per 100 km of distance to the elevator. The distance you put in the calculator is one way; the rate should already carry the empty trip home.
Questions
Should I use bushels or tonnes?
Whichever your buyers quote. Switch to bushels and miles above and the calculator works in dollars per bushel and a freight rate per bushel per 100 miles. It does not mix the two, so enter every bid in the same unit.
Does this include basis?
It works on the cash bid each buyer gives you, which already includes their basis. If you are comparing basis levels on the same futures month, the difference in basis is the difference in bid, so the ranking is the same.
What about grade and dockage?
Dockage, yes: put the percentage you expect from each buyer in its row, and it comes off that buyer's bid. Grade is not included, because a grade call changes the price itself and varies by load. The shrink calculator covers what moisture costs you at delivery, including the drying charge.
This decision, every load, all season
GrainPosition tracks your grain contracts, bin inventory, weighted average price and margin over cost of production, in tonnes or bushels, in Canada or the United States.
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Sources and method
Method: arithmetic on the numbers you enter. Net price is the bid, minus freight (the rate times the distance, per hundred), minus drying, minus the bid times the dockage percent.
No market data is fetched; every bid is one you type.
Check a grain settlement from a photo
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