It's not an easy situation to deal with. We had some great years in 2020, 2021 and 2022, when market prices were on the rise. Things were going very well for cash crop farms, in that we were able to invest more in our infrastructure and purchase additional farmland.
Nowadays, it's getting harder to stay competitive in the seed industry. We offer Canadian products, of course, but we're competing against major players—multinational corporations. Speaking of seeds, I'd say that the grain we buy to sell as seed accounts for a very small percentage of the total value of a bag of seed. There are so many other factors to consider. There are seed premiums, which are paid to producers to encourage them to continue production. There are royalties we have to pay for genetic development. There's screening, cleaning, screening losses and treatments, among other things. The grain accounts for less than one-third of the value.
There are so many other factors to consider when producing a bag of seed locally for customers. Convenience comes at a price. When prices are high, it's good for large-scale growers, but it gets hard for us to compete when we sell seed to our customers. Profit margins are very tight, so the price of seed is important to customers. The big players produce large volumes, so they're able to sell their product at our cost of production. This makes it very difficult for companies like ours to compete against them. In today's market, our margins are very tight.