Burbert Emerges From His Cave

[Fransisco]

The free market may not be perfect but it's never had to put an iron curtain around people to keep them from leaving.

[dmlfarmer]

One thing to remember is Sunkist and Ocean Spray and every other co-op only works on behalf of their members. If the CWB was changed to a similar format, you have to assume it would only be responsible for marketing the grain of those are CWB co-op members. That means any growers who choose not to market through the CWB would have to market ALL of their grain outside the CWB. Furthermore this means the 60% of the grain sales which are currently made by the CWB (assuming 40% are made by accrdited exporters) could only be filled with grain from CWB producers. Yet the CWB could still compete with non CWB farmers to fill the 40% sales made by the accredited exporters. (And given the massive amount of grain the CWB would still have, there isn't an accedited exporter who would refuse to allow the CWB to compete to supply the grain the exporter needs) Instead of supporting prices for individual producers, the farmers who opt out will have lost 60% of the market plus have to compete with the CWB for 40% of the market that remains.

Second, once you opt out of a co-op you may not be allowed back in. Why would a group of people seeking to sell cooperatively want anyone in the coop who does not want to share high prices and only wants the coop to sell their grains when they cannot do it on their own? While the door is open to sell outside the board, it is likely a one way door - once you walk through it you will never be able to return.

Third, if even only those producers who have voted to get rid of the board entirely in the plebicites opted out, could the Northern US markets and their published higher prices, handle that amount of grain flowing south without losing the price premium or causing an uproar by Northern US farmers and a resulting trade action to support prices and limit Canadian grain deliveries? I do not know, I am just asking.

While the voluntary, co-op idea sounds good, I would really be interested in knowing how many of you would actually opt out of the CWB if it meant you could never sell another bushel of wheat, durum or barley through the board again.

[dmlfarmer]

One thing to remember is Sunkist and Ocean Spray and every other co-op only works on behalf of their members. If the CWB was changed to a similar format, you have to assume it would only be responsible for marketing the grain of those are CWB co-op members. That means any growers who choose not to market through the CWB would have to market ALL of their grain outside the CWB. Furthermore this means the 60% of the grain sales which are currently made by the CWB (assuming 40% are made by accrdited exporters) could only be filled with grain from CWB producers. Yet the CWB could still compete with non CWB farmers to fill the 40% sales made by the accredited exporters. (And given the massive amount of grain the CWB would still have, there isn't an accedited exporter who would refuse to allow the CWB to compete to supply the grain the exporter needs) Instead of supporting prices for individual producers, the farmers who opt out will have lost 60% of the market plus have to compete with the CWB for 40% of the market that remains.

Second, once you opt out of a co-op you may not be allowed back in. Why would a group of people seeking to sell cooperatively want anyone in the coop who does not want to share high prices and only wants the coop to sell their grains when they cannot do it on their own? While the door is open to sell outside the board, it is likely a one way door - once you walk through it you will never be able to return.

Third, if even only those producers who have voted to get rid of the board entirely in the plebicites opted out, could the Northern US markets and their published higher prices, handle that amount of grain flowing south without losing the price premium or causing an uproar by Northern US farmers and a resulting trade action to support prices and limit Canadian grain deliveries? I do not know, I am just asking.

While the voluntary, co-op idea sounds good, I would really be interested in knowing how many of you would actually opt out of the CWB if it meant you could never sell another bushel of wheat, durum or barley through the board again.

[chaffmeister]

I’m fascinated by your assumptions.

I don’t assume a voluntary CWB would only be responsible for its “members”. Why would it have members?

And I don’t know where it’s written that once you opt out, you couldn’t get back in.

I buy gas for my car and truck at the local Coop. I’m a member because I choose to be and I buy my gas there because I get a competitive price and an annual patronage rebate cheque. The Coop also sells gas to non-members – they get the same competitive price but no rebate cheque.

You assume that because the CWB now sells 60% of all wheat sales without an AE, its sales would still be 60% of the market if voluntary. I suggest that a voluntary CWB’s sales would be equal to what they get from their “members” and/or other “suppliers”.

It’s interesting that you feel a voluntary CWB would have a “massive amount of grain” to sell. It’s refreshing to hear someone suggest that a voluntary CWB would have that much support from farmers. The Single Desk crowd would like you to believe that it wouldn’t.

This idea that if you don’t support the CWB you must want to sell into the US is terribly misguided. Why not offshore? In a voluntary market, the grain companies would provide elevator bids for wheat. The grain they buy would go either offshore, to the US or to a domestic buyer – just like with other open crops, like canola.

[dmlfarmer]

chaff: the local coop you refer to is a purchasing coop. Its purpose is to purchase gas for its members and trys to minimize the costs of a commodity. )Bulk buying and selling to non members assists in this goal) The CWB, just as sunkist or ocean spray, or the dairy coops are selling coops that try to maximize value of a commodity. (Controlling production, charging membership fees or quotas, and limiting competition are widely practised) They are totally opposite, with different purposes and opposite trading tactics.

As far as the rest of my assumptions - I honestly have no idea and that is why I am asking the questions. You have to start somewhere, so I started with the present situation and am asking you which way will it go. So instead of attacking my assumptions, what is your prediction?

[dmlfarmer]

chaff: the local coop you refer to is a purchasing coop. Its purpose is to purchase gas for its members and trys to minimize the costs of a commodity. )Bulk buying and selling to non members assists in this goal) The CWB, just as sunkist or ocean spray, or the dairy coops are selling coops that try to maximize value of a commodity. (Controlling production, charging membership fees or quotas, and limiting competition are widely practised) They are totally opposite, with different purposes and opposite trading tactics.

As far as the rest of my assumptions - I honestly have no idea and that is why I am asking the questions. You have to start somewhere, so I started with the present situation and am asking you which way will it go. So instead of attacking my assumptions, what is your prediction?

[chaffmeister]

Disagreeing is not attacking.

Predictions? I can't predict what a voluntary CWB would look like. But I can share what it could look like.

To me, a voluntary CWB would compete for your wheat. It would sell what it buys. It would offer pooled prices for grain contracted with farmers. It would also offer daily prices to buy grain on a spot or deferred basis.

There would be no final payment on daily priced sales - the price you get on delivery is the price you get. The pooled price would not be a flat price as it is now, rather it would be a basis. Each farmer in the pool would price at his discretion. For those that don’t want the responsibility to price, the CWB would also offer a fixed pool price as they do now – but participation would be voluntary (even if you’re in the pool, it’d be your choice whether you do your own pricing or allow the CWB to do it).

[chaffmeister]

"Ocean Spray was formed in 1930 by three cranberry growers who really loved their cranberries and wanted to expand the market for their favorite crop."

I can find no indication anywhere that Ocean Spray was formed to control production or limiting competition. Same with SunKist.


The idea of market power or even market dominance is the same regardless of whether you're buying or selling.

But aren't we getting a bit if topic? The argument is really about whether voluntary marketing through a pool or coop would work and how.

[dmlfarmer]

Chaff, you are the one who brought up Sunkist and Ocean Spray and talked of the success of this business model. But both of these only market the production of their members. Yes they have market power because of size, but also because of quality and brand recognition. Neither these nor most other selling coops sell for non members simply because they cannot control quality or quantity of production. The sunkist name alone is extimated to be worth of 1 billion dollars to Sunkist grower members.

While a marketing coop operates within the free market, it is by no means free for everyone to take advantage of. Either you are a member and abide by the rules of the coop and benefit from it or you are outside looking in.

[dmlfarmer]

And no I do not think we are off topic. I was very intrigued by your reference to Sunkist and Ocean Spray and that got me wondering if the CWB could operate under this business model, restricting its grain sales to the production of CWB farmer members. Either you are in the CWB or out. As hog and cattle guys have found out big is not always better. Maybe a CWB more focused on quality and less on trying to be everything to everybody might be an option to consider. I really don't know and that is why I am asking these questions.

One thing is for sure, we would sure find out what side in the CWB debate is right if producers had a one time choice of remaining in a CWB coop or opting out and never selling grain through the CWB again!

[Burbert]

Okay, so a cartel, won't work, cause they are all voluntary organizations, that no longer control anything, look for instance at the price of oil, its cheap, cheap, cheap, or is ittttttt! Bought any gas at the pumps lately. Oh by the by, guess I'll go buy some cheap diamonds to give to the family at Xmas now that they are so cheap, cheap too. Oh the free market is wonderful, everything is sooooo cheap nowadays. No wonder I always have sooo much cash in my pocket and my bank account is bulging. Maybe what we need is an OLIGARCHY like in Russia, the mob controlling our grain sales, not a cartel an OLIGARCHY, same people who cut of the gas to Poland last winter. Yeah thats it an OLIGARCHY....... What about an OLIGARCHY chaffmeister?

[Fransisco]

How's about a monarchy, and you get to be the King Burbert? I know Burger King has an extra crown kicking around somewhere.