Why is CWB Feed Barley GDC at least $40 US per tonne cheaper than World price?

[mbratrud]

Thats .17 cents per bushel into the contingency fund. It would be interesting to compare the 08/09 final on Barley vs the average domestic feed price for that crop year?

[charliep]

Can't do for the prairies but can for Alberta.

Average A and B total payments for 2008/09 feed barley was about $190/tonne port or $130 in Alberta ($2.80/bu) assuming $60 of deductions. Simple average price delivered Red Deer elevator was $147/tonne ($3.20/bu).

[chaffmeister]

This is nuts.

The CWB has been selling feed barley for, say $50/tonne more than what it is paying farmers - and nobody's really complaining?!

Think about it for a minute -

The CWB sells at about $260/t
Then buys from farmers at about $215/t

In an open market, the export price would translate back into the prairies - instead of paying farmers $3.50 a bushel the graincos would be paying closer to $4.50/bu.

Soooo.....what do you think that would do to the local price of barley? And the price of malt barley?

The price of the whole crop would move higher. BUT, because the CWB is holding back, the price doesn't get out to the local market and the local price is held down.

Figure on 7 mmt of barley, say a conservative $25/t difference means about $175 million NOT going to barley farmers.

Great system you got there. Hows it working for you?