Would you opt out of the CWB if it became a co-op?

[chaffmeister]

dml: “These coops will try to match production to sales and target markets which return the best prices.”

Really? How do you match production to sales? Do you have that ability? Wouldn’t it be easier to sell what you produce? (Which is what I’m pretty sure these guys do.)


dml: “As many on this site point out, the CWB is too small to set world prices, therefore selling grain for non members is not likely to increase profits.”

Why not? I may not be able to set world prices for anything, but I know that if I can make a buck selling one, I’ll make two bucks selling two and three bucks selling three. Hell, I’ll sell as many as I can for as many suppliers as I can. Bring it on. My sales program would be based on the number of suppliers and the amount they can supply.


dml: “Just like your example of sunkist, and ocean spray, or the pools, a CWB cooperative would likely market quality rather than quantity.”

Why not quantity? Ocean Spray didn’t grow from 3 growers to over 600 so they could market just quality.


dml: “The CWB already has a customer base, branding, and name recognition which they could use to sell members grain. Why would they dilute the limited premium grain market by selling for a non member?”

You seem to assume that the CWB controls the “limited premium market”. It doesn’t. If a voluntary CWB pool didn’t sell it, someone else would.

[bucket]

The reason for more value added is the same as for ocean spray. It would become a vertically integrated coop. More value for the owners.

The cwb is too set in there ways to think that way.

[dmlfarmer]

good point bucket.

You may be right that the current board is too set in their ways to value add.
I suspect there would be lots of producers who would be opposed to the current board entering the value added market too. Look at the backlash to the pools when they bought livestock enterprises and donut shops.
And I wonder if the current board even would have the mandate or the ability to source financing for such enterprises even if they thought it was a good idea and that farmers would not go ballistic if they did that.

[dmlfarmer]

Chaff, the dairy industry has matched production to sales for years. You overproduce your quota it goes for manufacturing rather than milk. Sunkist directs lower quality produce to concentrate production rather than trying to sell this as fruit. It can be done.

Ocean Spray did not grow from 3 growers to 600 overnight. As more production was needed, they accepted more growers. Again matching production to demand.

Of course the current CWB does not control the premium market. Neither did Sunkist or Ocean Spray when they started. You grow a brand and market. That is why the Sunkist brand name is worth an estimated 1 billion dollars to the Sunkist coop. Even now the CWB name is worth something - I have no idea what. There are single deskers who believe the amount is high. There are those who say the board has no value.

[charliep]

If the cooperative route were chosen, what would the governance structure look
like? Traditional cooperative (one share/one vote)? New generation cooperative
(share structure reflects ownership business interest)? Where does the equity
come from to support the cooperative operations, provide a contingency fund
and allow for investment in other activities.

[DogPatch]

We had 4 (atleast) Grain co-ops in the recent history of the Canadian Prairies and what have we now? Nothing that even resembles what I would call a co-op.

[cchurch]

Ocean Spray and Sunkist have their own brand and distribution system.

How can you compare them to the CWB?

This CWB (co-op) would have the brand name, but no means of distribution.

Imagine if Ocean Spray or Sunkist relied on their competition to distribute their products.

I can't see that happening.

[chaffmeister]

cchurch:

SunKist and Ocean Spray were brought up ONLY to demonstrate that successful pooling or cooperation between producers DOES NOT NEED TO BE MANDATORY.

Period.


BTW - the argument that a voluntary CWB wouldn't work because it would rely on its "competition" to handle its grain is getting very old. We're way past that.

[chaffmeister]

dml:

Good point about production vs sales. I was thinking about a crop year basis on commodities where you don’t have perfect control of production.


You and will always sit on opposite sides of the fence when it comes to brand value of the CWB name. Ken Ritter should be careful what he asks for. A payout from the government if the CWB is shut down would require a complete – repeat, complete – audit of the CWB’s marketing activity in order to determine its “value”.

[AdamSmith]

My answer to this question is, I would be first in line to opt out. But that is based on the assumption that the voluntary cwb would be the exact same cwb that exists today and if that were the case there is no way in hell I'd even voluntarily let them inspect a sample bag of my wheat.

By the way I've opted out already. For the last three years I've been growing only un-registered American wheat, buying it back and shipping it to Conagra's flour mills in(south of) Minniapolis.

Yes I have to deal with the cwb on the buy-back but so long as I'm prepared to pay the piper, they can't refuse me my licence.

I shipped over 17000 bushel in 2008(2007 crop) by truck for a final recieved (back to the yard)price of close to $15 per bushel.

I feb/mar of 2009 I shipped over 40000 bushels down there for an avg. (back to the yard) price of a little over $7 per bushel.

This year close to 100000 bu of this same wheat is sitting in my bins with the intent on shipping it all down to Minny as well.

Selling wheat on the open market is profitable (even after the buyback)and is not Rocket Science.

It just won't work nearly as well if you grow registered Canadian varieties.

By the way the yeild advange alone is worth it. At least 10 bushels maybe even more than 20 on a couple of fields.

My 100 acre wreck even went 57 bpa.

My top 2 quarters avg. over 80.

This was from bin-run (not even cleaned) seed with no tilt or folicur sprayed in crop.

Talk about blowing every assumption about growing and selling wheat out the window.

Get rid of the board, get rid of our stupid varietal registration system and wheat will become a serious cash crop for western Canadian farmers again.

Just be prepared to build more bins and pay more income tax.