Hello jeff nielsen

[bucket]

Hey you must be back from your required love-in at Regina by now. Any insightful words you would care to share with the rest of us?

Just wondering.

[cchurch]

Haha very funny.

You jackass.

[bucket]

Oh that's right larry hill was on the radio saying how tough the marketing year will be. He also was saying how returns two years ago were a money maker. Maybe he ought to realize that the cwb is suppose to make us money every single year. Year in and year out. The cwb people are not to paid to rest on their collective laurels just because they did something that still didn't equal the open market two years ago.

And I am not a jackass. I notice people and their behavior. And if you have ever been to a c to c conference you would know that everything in my first post was true.

[Fransisco]

I'm guessing he forgot to mention that average returns were much higher in the open market that same year.

[bucket]

No, but he did mention on 620radio that the get their borrowings from the government at 0.25%. Then they borrow the money to the country that is going to buy our grain.

But if they don't sell our durum farmers get to pay dearly to borrow money for the next crop. Some farmer oriented organization this is hey? Borrow money to someone to buy our grain but leave western canadian farmers to pay to put a crop in.

If it was a real farmer oriented organization they would be financing farmers to put a crop in with realistic advances and telling the buyers of our grain to find a bank.

[Jeff Nielsen]

Hey Bucket
thanks for the questions, yes it was, as always an interesting meeting. You have a handful of strong choice supporters and board supporters and mostly middle of the road producers. As with any meeting you feed the participants what you feel they want, and direct them to where you are going.
On that front it was a successful meeting. Yet I feel the underlying current was more is to be needed in providing better, clearer options and value to producers bottom line. Many a comment was made that current CWB crops are not financially viable to grow.
We do tend to wander off of our main objective - that being marketing of wheat and barley and returning all proceeds less administration to producers - but that happens.
As you know Bucket, change is slow and very frustrating.
I'm sure I'll get some interesting comments but heck at least as a CWB director I'm honest in putting my real name here and not a nickname.
Jeff

[silverback]

How much did Administration cost rise this year Jeff?

[bucket]

Thanks Jeff

Any mention about trying to get a better handle on the durum situation going forward.

As I see it the only way the cwb will gain control and do producers a service is to start in February trying to get production contracts set up so producers don't overproduce again and if they do they know who is on the hook.

A system that may work and others can comment would be to adapt a Nexera contracting system.

Or another idea would be to look back a producer's production and tell them they can grow and will deliver X% of their normal production.Then they know the price for fall, they know they will deliver it all over the course of the marketing year. If a producer grows more then he is speculating and that's on him.

Here is the example.A producer over the last 3 years has grown 1000 tonnes of durum annually. The cwb comes to him early in the year February and offers price, delivery and lets say 60% acceptance of his annual production or 600 tonnes. The producer can now decide to grow only 600 tonnes or slightly more on his land and he has time to figure out what to infill the lost 400 tonnes of durum production with. Others can comment. The reason I suggest this is to bring down the production and bring up prices but it a proactive approach. The idea of sending PROs out that indicate growing durum is a better option than wheat in the spring and it turns out the opposite is reactive approach.

This also doesn't mean that the farmer can't grow his normal 1000 tonnes. It just indicates in advance that cwb is not going to take more than 60%.

That is one of the problems of the PRO system, it never tells you how much the cwb will accept. And acceptance level times the actual returns play a big part of cash flow and profitably on most farms. No sense in the cwb saying durum will be 8 bucks at a 50% acceptance - you can't generate revenue at 4 buck durum because that's what it is worth. Until the cwb accepts 100% you don't get 8 buck for your durum. Especially if the price drops 3 bucks a bushel year to year. Like producers have just seen.

I would like to know going into the 2010 growing season that I could dedicate acres to durum and grow the required amount and use those lost acres to something else well in advance. The pro last year on durum did not do that. It gave ineffective price signals which put us in the mess we are in today.

[charliep]

Good idea on durum.

From the C to C program in the past, the CWB would sometimes use as a opportunity to float trial balloons on potential programs. They also have used a focus group/workshop type of activity to capture participants view points/ideas? Did either of these occur this year? Were there any new ideas/hint on 2010/11 delivery/pricing programs presented?

[bucket]

You are right charliep.

The focus group doesn't usually allow much time for ideas or changes. The cwb looks for approval thru facilitators (proboard people) to keep the producers approving things. Don't try to question the logic of the surveys or ideas they come to the table with because the ideas came from another focus group.

I once asked " Who thinks this shit up?" in regards to the cwb getting into co-ordinated trucking. I went on to tell them the industry is already co-ordinating itself quite well on its own. Any way I wasn't very popular for questioning where they going with this and the discussion ended quickly.

The sad part of this discussion is I floated those durum ideas to both Jeff and Larry Hill long before this c to c meeting took place. I would have expected to have had some positive reaction from this c to c conference on the idea.(I wasn't there so don't know) But if jeff and hill can't run with an idea - I start to wonder who the puppet masters are.

Imagine giving someone an idea that could effectively put all producers back into proactively managing their farms instead of scrambling after harvest with a 40% call on durum. AND NO ONE sitting at the board table can put it into effect. I don't my name associated with the idea - I want the idea to proceed forward which is why I took the time to call directors and explain it to them. They both said it was worth looking at, at the board table. And given the mess on the durum side I think some attention has to be paid to fixing the problem.

[Jeff Nielsen]

C to C alumni this year was pretty general, talks on, naturally WTO and why we need to stand up for the CWB, branding, weather farm, CWB supply chain, Ward's market outlook, who is Ron Davidson and what he does for the CWB in Ottawa.
Special guest speaker from Ecuador who's flour mill buys Canadian wheat. He was a good speaker and a true highlight. As to the rest, yes during the break out sessions there were many questions, comments and concerns over pricing options, durum, failure of barley marketing and so on.
Many asked why there wasn't sessions solely on PPO's. Perhaps in the future there will be.
As to administration costs? I believe they are slightly higher than last year with the majority of that relaying back to our conversion to a new IT system that has been ongoing the past couple of years. That will be found in our annual report out shortly.
Jeff

[charliep]

Jeff can speak for himself but the issues you raise outside the suggestion itself is governance and the role of the Board of Directors versus CWB operations. My assumption is the B of D would highlight the requirement to make a closer tie between CWB producer payment options and delivery access through their strategic planning process. The operations side of the CWB would make it happen and be judged on results.

Just to be clear, I am not putting Jeff on the spot. Just curious if anyone occuppied a seat at this year's C to C and from there, topic areas/discussion.

[bucket]

The reason I called the directors is because if i call the 800 number they don't have a tendancy to put me through to operations. They write my suggestion down and say they will put it forward. My calls and comments have to date gone nowhere.

But, maybe, I would think a board memeber would act on a reasonable idea or put it through to the operational staff so it would be thought about. Durum doesn't have alot of time to correct itself. And coming out with a super low PRO is not the answer to the problem as it may cause quality control issues.

thanks again for the update Jeff.

By the way is ecudor one of those countries that get financing through the cwb?

[Jeff Nielsen]

thanks Bucket, good points and questions that have been asked and been around for some time. Durum no doubt we made a BIG error last spring with the PRO, yet it reflected the world price at the time, should we have had more sold? carried a lot less into the new crop year? that I'd agree to no problem. How we could have achieved that goal better well that I think we do have to solve, especially going forward. It is discussed at the board table, and it is one problem that needs better answers ans solutions to allow producers to see decent returns from there durum. Going into 2010-11 is going to be a challenge for sure, and one that feed back from producers on what really they want is needed.
As to Ecuator, not sure how the sales is financed.

[bucket]

Hate to carry this on too long.

But as a durum producer I expect the cwb to come out fairly quickly and say if western canadian farmers grow 4-5 millions tonnes of durum we can only sell 50% or less of it because the carryover will be huge.

Like I said earlier give producers the acceptance of the contract now and a reasonable price for the 2010-2011 year so they adjust their seeding plans accordingly. There is no sense in coming out with a PRO that is not reflective of anything and is NOT a guarantee of final returns.

If the cwb only needs 2mmt of durum for the 2010-2011 marketing year get the contracts out there like grainflo. Fill them in 1/2 hour and get on with the 2010/11 marketing year. Start telling your buyer that canada is not going to store durum for them. I am quite sure at the current prices the buyer could build bins. I get told that every stinking time I want to buy fertilizer. Hell it is so cheap you can afford to buy bins.

These ideas to solve the durum problem are ones that forward thinking. If I know that the cwb is going to accept 500 tonnes of my durum for the 10/11 crop year I can adjust accordingly either by leaving what is in the bin for next year and not growing any or just reduce acres. If I grow more than that I have no problem with storing it - I know the consequences before I start.

But if I grow a crop based on the PROs coming out february and the cwb doesn't make an effort to sell my crop then I will be a bit annoyed and rightly so.

You have to remember that the current call on durum means that the cwb has only moved 15% of the 09/10 crop and we are halfway through the marketing year. Couple this with no guarantee on B series movement puts durum producers in a bit of a pickle and grain companies know this. May explain why peas are at less than 6 bucks right now.

Bottom line:

Sticking your heads in the sand at the board table doesn't make the problem go away and does not instill confidence.

The board should, if operations won't, make it a priority to solve the durum issues prior to the 2010 crop year. To me, it seems quite achievable. It would make farmers more money. But quite frankly, the current system for durum is not working. And, if the cwb refuses to make changes quickly, it should not be hard to support asking the government to get the cwb out of durum. I know that admitting failure is better than continuing to fail.