Just for you three amigos Agstar and Burbert, cchurch.

[chaffmeister]

Ado:

I don’t care whether you support the CWB or not, nor am I addressing that so stop worrying about it.

Grain companies handle CWB grain whether they sell it (“win those tenders”) or not. And if they do sell grain on behalf of the CWB, they don’t set the selling price – the CWB does. So they can’t push the price of the grain down as you seem to think.

However, the CWB does tender a small portion of their country origination with grain elevator companies, who do indeed discount their handling charges to win those tenders. Isn’t competition a great thing?

By the way, I see no fox.

On freight: don’t confuse “footing the bill” with “negotiating the rate”. Also, don’t talk about ocean freight as if you can’t compete because of your size. You can’t compete because you’re not in that business. Just be thankful that someone can negotiate those rates because that means the prices you get for your grain are higher.


Here’s where we have a communication problem – you say:

“I really don't know how you are figuring that price discovery in the country is going to lead to anything but the absolute lowest price farmers are willing to pay.”

First, I assume you mean the lowest price farmers are willing to SELL. If that’s what you meant, I’ve never said anything different. I agree – the price in the country is going to be the lowest price farmers are willing to sell. Can you see a situation where it would be more?

Sorry you think the Mexico/Japan scenario doesn’t work that way. After 30 years in the grain business, I can assure you it does.

[chaffmeister]

All these words put in my mouth simply because I said its misguided to think:

.....there will be about six grain co.'s fighting not to purchase our grain a higher price but to sell it at a lower price.


And yet, all this time we agreed on so many things:

1. a company is going to pay the least they can for the goods that they are re-selling.

(Let me add - "least they can" means they still have to compete with other buyers - can't do that by offering the lowest prices all the time)


2. they would compete with their rivals for the customers business

(Let me add - assuming we are talking about a commodity, the best way to be competitive is by having the lowest costs - which means perhaps negotiating the best ocean freight rate....)


3. People will alway buy the cheapest product that satisfies their needs.
(Not always, but I agree with the sentiment here.)

______________________________________


It seems we disagreed on this one:

4. Companies will charge as much as they can when they sell something.

[ado089]

First of all when I was talking freight I was not including ocean freight. I was saying the if company/country X was looking for 200,000mt of wheat from region Y they would likely be able to get a more favorable freight and elevation charge from pit to port than me shipping my 1,500mt of wheat to Vancouver.

As for the rest I'll agree with everything in the last post but you explain this to me...The price of beef at the grocery store has not dropped in the last ten years even though the price live cattle has. How does selling for more translate into buying for more, providing I am wrong about these companies using my grain to compete against my grain?

Also...since grain companies love the CWB due to the risk free and lucrative nature of handling board grain and you've been in the grain industry for 30 years, you must be a broker or a consultant. That would be a good space to be in if the board were to be gone, not?

[Fransisco]

I know my farm would be a much better space to be in if the board was voluntary.

And it's funny, how boardies always equate "voluntary" with "gone".

[chaffmeister]

Ado:

You say you weren’t talking about ocean freight – excuse my mistake. When you said “… someone buying a vessel of wheat is probably going to demand and get a better shipping and handling rate” I assumed you actually meant a vessel. Silly me.

Before I explain this….
“The price of beef at the grocery store has not dropped in the last ten years even though the price live cattle has. How does selling for more translate into buying for more, providing I am wrong about these companies using my grain to compete against my grain?”
…you’ll have to explain the question to me.

Good space to be in if the board were to be gone: just about anywhere.

[ado089]

Just because someone reselling something for more, providing your economic theory holds, doesn't mean that said company will pay more for the raw goods. Beef and live cattle as an example.

Anyway I'm out of this one. I hate defending left wing ideals probably because this is about the only one I have and I really do think that the organization that is in place now is a complete joke and costing us a bunch of money.

[chaffmeister]

Agreed.

And agreed.