‘40’ Years Ago
Tuesday, October 26, 2021
filed under: Historical
Editor’s Note: The Sunflower’s 1991 publishing schedule did not include an issue in either October or November. So our regular ’30 Years Ago’ page this month instead goes back 40 years, to the October/November 1981 issue.
Good News: Railroads Offer Rate Reductions / By Mike Miller, Fargo, N.D., transportation attorney — “It may be a little hard to believe, but all the news about transportation is not bad news — particularly if you happen to grow sunflower.
“Today, on the Burlington Northern or the Soo Line, the rail rate for moving sunflower is generally the same as the rail rate for moving wheat. This is very unusual due to the fact that you can only load around 90,000 pounds of sunflower seed into a C-6 covered hopper car, while you can load over 180,000 pounds of wheat into a C-6 hopper. As far as the railroads are concerned, this means they receive $1,548 per car for a single car movement of wheat from Devils Lake, N.D., to Duluth, for example, but only $774 per car for a similar movement of sunflower seed.
“Of course, railroads do not just reduce rail rates out of the kindness of their hearts. In fact, there are at least three reasons we have seen the huge rate reductions on sunflower seed during the last couple of months.
“First, the Burlington Northern — as has the Soo Line — has now decided to create multiple car and unit train rates for movement of grain and seed. These rates are generally considerably lower than existing single car rates.
“Second, most U.S. railroads are experiencing a surplus of cars. This naturally leads to more pricing competition.
“Third, in the past, most of the sunflower seed has moved by truck. The current dramatic rail reductions on sunflower seed are designed to capture some of this traffic.”
Sunflower Market Outlook / By Art Sogn, South Dakota State University extension ag economist — “The cost of carrying an inventory of sunflower seed with 18 to 20 percent interest rates is about two dollars a hundredweight per year. Processors are not going to store one more pound than they have to this year because of this high cost of carrying that inventory.
“That’s why you can see price fluctuations jumping somewhat substantially this year. When there is demand — a hold to full or a ship coming in — you see buyers bidding up the price to get more seed. They can afford to bid more just to have someone else store those flowers until they want them. When that particular demand is filled, the price drops back again.
“If we want to be pessimistic about sunflower (although I’m not pessimistic), it’s due to the unlikelihood of sunflower prices going up in the very near future.
“From what I gather, storage space is being used in the country for other low-priced crops. There isn’t a great deal of storage space left for flowers, so a lot of them are going to have to come into the market around harvest time.
“Besides that, we know from visiting with production credit associations and banks that farmers are going to have to move something to get their cash flow going. Flowers are probably the only thing they’ll move, for several reasons. Feed barley is very cheap right now. If worse comes to worse, they can feed the barley, while sunflower is still considered a cash crop. And, of course, barley and other grains were in the bins first. Also, some people who had poor experiences storing sunflower a few years ago may be reluctant to store them again.”
Food Editors Hosted by NSA — “Five national magazine food editors were hosted by the National Sunflower Association during a ‘Sunflower Sojourn’ around North Dakota in September. While in North Dakota, the group visited a farm during sunflower harvest, viewed seed company test plots and facilities, toured both oil and confectionery sunflower facilities, learned about sunflower butter, and met with a number of industry personnel. A dinner with North Dakota Governor Allen Olson was a highlight of the visit.
“The purpose of the sojourn was to introduce these people to the sunflower industry and its products in order to encourage coverage of sunflower in their respective magazines. These five magazines (Redbook, Women’s Day, Southern Living, Co-ed Forecast and Mademoiselle) have a combined circulation of over 15 million readers.”