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HomeMy WebLinkAboutThe Brussels Post, 1981-04-01, Page 5BREAD 3 'loaves white bread for $2.10 DOUGHNUTS 1.99 a dozen Homemade EASTER CANDIES available (AI EASTER CARDS Thursday, Friday and Saturday Only YOUNG'S VARIETY Weekday8.&30-gi Holidays and Sundays 11:80 -6. Brussels 887,6224 invite all Policyholders and friends to "OPEN HOUSE" 2 p.m. - 5 p.m.-and 7 p.m. - 9 p.m. on the occasion of the Official Opening of the New Office Building at 91 Main Street, South, Seaforth, Ontario on. Friday, April 10 , 1981 John H. McEwing Margaret Sharp President Secretary-Treasurer THE BRUSSELS POST, APRIL. 1, 1.981 , A5 Orangeville area farmers tour Huron farms BODMIN BEEF ON THE HOOF? — Farmers from the Dufferin County - Simcoe area toured some of the interesting agricultural sights in Huron County and one was Bodmin farms whet:e they got to see prize winning beef. some 'of Bodmin Ltd.'s (Photo by Ranney) A group of farmers from. Orangeville and surrounding area were up touring some farming operations in Huron County on Tuesday of last week. Among the places toured were the William Bennett and Sons Farms Ltd., at R.R. I, Gorrie where there is a beef feedlot ,and hog finish- ing barn; Bodmin Ltd. at R.R. 5, Brussels which has purebred Shorthorn breeders; S.P.F. Swine Herd and chicken broilers; and a tour Classified Ads pay dividends of the U,C.O. Feed Plant on No. 4 Highway north of Wingham. Chimney fire Brussels Fire Department answered a call'to a chimney tire at the home of Wallace Black of R.R. 5, Brussels on Thursday. How do you play the hedge game? by Jack Hagarty At a recent marketing course we had some fun. We played a game called "hedge game." Farmers were asked to take the role of a buyer or seller of grain corn. The stakes were a potential din- ner for two at the best restaurant in town. They were to use the futures market as a guide and to set a target price for corn this fall. The objective was to come as close as possible to the target price. Those who use the futures market become familiar with the term basis. Basis is the difference between cash and futures. It is a function of local supplies, transportation availability, storage and int- erest costs. Basis, in itself, is a price. It reflects the value of local grain at a given date compared to the expected value of corn in Chicago Wilfred Shortreed,of Walton averaging 940 :lbs., sold for 75.60. Two heifers consigned by Allan Willits of R.R. 1 Wing- ham averaging 1040 Ills. sold for 75.80.. Two heifers consigned by Neil Rintoul of Lucknow averaging 1220 lbs. sold for 76.00 with his lot of 6 heifers averaging 1111 lbs. selling for 74.90. when the contract matures. Today the basis between cash price of corn in Cana- dian dollars ($3.90/bu.) and December futures price ($3.60/bu.) in U.S. dollars is + 30c over. Basis normally narrows as the time moves closer to the futures date. Last year at harvest time, local cash price was -10c under December futures. Some years it can be -20c to -40c under. At times e.g. 1978 and 1979, cash price was +10c to 30c over December futures. So predicting fut- ures prices depends very much on the anticipated basis. • Target price is determined ti•om the futures price on the date that the hedge begins minus or plus the normal basis on the date the hedge ends. Example - target price Nov. 1, 1981 - using a -I0c basis and December futures $3.60, -10c gives a target price of $3.50/bu. Most of the farmers who were potent- ial sellers said that price was too low.' They were upset! They said the price will be much better than that - maybe $4.50. That's spec- ulation! Farmers arc know as "et- ernal optimists." The futures 'price is determined by pool- ing the judgments of all the optimists and pessimists who put their money on the line. It is the best appraisal of all unknown factors that affect market prices. As we were playing the game, the next. speaker, Ernest Ackert of Bruce county, arrived. Ernest is a farmer who has hedged, using the futures market, for ten, years. When he heard so many people saying they expected higher corn prices this fall, he left the room. He immediately made a phone call to sell some of his corn, His reasoning was that if so many farmers think the price. is going to be high next fall, then that alone is enough to drive the price down, i.e. they'll produce more corn and increase supplies. Below is an example of a hedge for a potential seller of eoin. 1. In March sell a December Corn Contract at $3:65/bu. 2. On N wember I buy a December Corn Contract at $3.50/bu. 3. Gain of $0.15/bu. 4. On November 1 sell corn on cash market at $3.60/bu. You can forget about the difference between the U.S. and Canadian dollar. It doesn't make that much difference to these calcula- tions. Basis is normally re- ported unadjusted as prices appear in the newspaper. The 33 participants of the course set target prices for corn this fall from $3.25 to $4.50/bu. with an average of $3.82 per bushel. It's inter- esting! You can sell your new crop today at approximately that price. • The market at Brussels StOckyards met , a good de- mand with all classes of livestock trading at steady to higher prices. There were 858 cattle and 1399 pigs on offer. Choice steers- 76.00 to 79.00 with sales to 82.50. Good steers- 74.00 to 76.00 A steer consigned by Jerry Kuntz of Formosa weighing 1250 lbs. sold for 82.50 with his load of 46 steers averag- ing 1196 lbs. selling for an overall price of 77.50. Two steers consigned by George Adams of Wroxeter averaging 1375 lbs. sold for 79.00 with his lot of 20 steers averaging 1358 lbs. sold for 77.60. A steer consigned by Earl Fitch of Wroxeter weighing 1160 lbs. sold for 80.00 with his load of 50 steers avera- ging 1138 lbs. 'selling for an overall price of 77.10. Sever steers consigned by Andy McMichael of Wroxe- ter averaging 1268 lbs. sold for 78.10 with his 22 steers averaging 1221 lbs. selling for an overall price of 76.90. A steer consigned by Mur- ray Powell of Wroxeter weighing 1210 lbs. sold for 82.50 with his lot of 11 steers averaging 1158 lbs. selling for 76.75. A steer consigned by K & L Beef Farms of Ethel weigh- ing 1202 lbs. sold for 81.00 with their lot of 16 steers averaging 1209 lbs. selling for 76.65. Choice Heifers- 74.00 to 77.00 with sales to 77.75; Good heifers- 72.00 to 74.00 A heifer consigned by Joe Zettler of Hanover weighing 1280 lbs. sold for 77.75 with his lot of 3 heifers averaging 1183 lbs. selling for 75.50. Four heifers consigned by Harold Bell of Wroxeter av eraging 1192 lbs. sold for 76.00 Three heifers consigned by Brussels Stockyard The Directors of McKillop Mutual Fire Insurance Company