CWB Basis Contracts

[TOM4CWB]

thalpenny,

On basis contacts, you wrote;
"If the Act of God clause you mention with other companies is foolproof, I'm not sure why you wouldn't try to lock in 125% of production?"

I am sorry that you do not understand that some people actually want to fulfill contracts they sign, and have every intent of doing so.

It just might be possible that relationship can be built to create trust between the contract holders, with simple questions answered to build the trust like acerage and average expected production.

The reality is that if I am committed to supply a particular marketer, they appreciate the opportunity to market all my production at reasonable cost to my farm and themselves!

Unfortunately the CWB monopoly excludes this type of relationship as you are a monopoly and I have very limited choice.

I change contracts with my other marketing partners often, how often would the CWB allow a change in any contract I make with you, before the contract is signed?

The other marketers want my business, and work to get it. Competition and trust regulated what contracts we dream up and what is acceptable!

With the CWB, I see the CWB act as the regulator of contracts.

Wouldn't the first option be much better for the health of the wheat and barley industry?

[TOM4CWB]

thalpenny, and the CWB;

Are significant changes being brought forward and being developed?

I understand even the SWP is requesting the removal of the restrictive contracting system that prevents quality management on supplies coming into the elevator system.

What is being developed to replace the present system, isn't full farmer participation in developing the future system desirable?

Or will farmers who must depend on the system in place be the last to know yet the most affected by the changes?

Why as our "broker" are you so afraid of open public debate on these issues?

[TOM4CWB]

thalpenny and the CWB;

I note on #1CPSRed and #1CWES the initial payments are $120 and $126 respectively.

The PRO's are $183.92 and $185.00, almost $60.00/t above the initials.

On #1CWRS 14.5 the PRO is $216.00 and the initial price is $180.00/t, only a $36.00/t spread.

The larger spread on CPS and CWES are taken directly out of my payment if I have your fixed price contract, as the initial payments you fix are basis spreads between the different types of wheat!

Why haven't there been an adjustments in initial payments, to accurately reflect market conditions?

How can anyone depend on the PPO system (or consider it fair or dependable) if you will not fairly pay us according to market conditions?

[TOM4CWB]

thalpenny and the CWB;

I note on #1CPS White, the initial price is $126/t and the PRO $192.00/t, for a spread of $66/t!

So on Dec 21, 5 months into the marketing year you pay only 2/3rds of the value of our grain, plus if I have a PPO I really get taken through the cleaners?

You regularily increase barley initials when that was required, what is the excuse for not changing wheat initials?

[TOM4CWB]

Thalpenny and the CWB;

I note the Special Select 2 Row Barley initial price is $192.00/t and the PRO only $214/t, for a spread of only $22/t!

You changed the initial twice to reflect the changing barley market, why not even once on wheat?

[TOM4CWB]

thalpenny,

Being that December 21st is a long cold night...

I note the CWB Producer Direct US Morning selling prices for Dec 21st 2001 were as following:

(all prices based at port(Vancouver))

#1CWRS 14.5 was $202.85
#1CWRS 13.5 was $199.36
#1CWES was $192.10
#1CPS RED was $183.92
#1CPS WHT was $185.08

The spread on CWB basis contracts are determined by adding the basis to the initial payment of the other classes of wheat. This is based on the #1CWRS 13.5 Protein grade

CWB discount as now subtracted #1CWRS 13.5 $169.20
#1CWES -$126.00
--------------
$43.00/t

If the CWB were to apply a basis payment using the PRO, instead of the initials prices, the following extra $18.00/t would accrue to PPO payments:

#1CWRS 13.5 PRO is $210.00
#1CWES PRO is $185.00
------------
Discount using PRO $25.00/t

Again an additional $18.00/t to the CWES basis contract.

If however the CWB were to use their own North American sales values the added value is $35.74/t for CWES;

CWB Producer Direct sales as priced #1CWRS 13.5 $199.36
#1CWES -$192.10
--------------
$7.26/t instead of $43.00/t

CWB discount on CPS #1CWRS 13.5 $169.20
#1CPS Red -$120.50
--------------
$48.70/t

#1CWRS 13.5 PRO is $210.00
#1CPS Red PRO is $183.00
------------
Discount using PRO $27.00/t , in other words $21.70/t is missing from the basis contract payment.


If however the CWB were to use their own North American sales values the added value is $33.26/t;

CWB Producer Direct sales as priced #1CWRS 13.5 $199.36
#1CWES -$183.92
--------------
$15.44/t instead of $48.70/t

Can anyone expect "designated area" wheat producers to call these PPO options "marketing choice"?