CWB Guaranteed Delivery Contracts?

[TOM4CWB]

Charlie,

A dysfunctional system.

Feed wheat GDC contracts... but no shipping... so elevator won't sign them up. The same happened with Select Winter Wheat last year.

A LOW value PRO for a B series feed barley in 2009-10 that did not exist because no one would sell to the CWB.

I understand the CWB cancelled shipping on some 2010 feed barley GDCs this fall... cause Vancouver is too congested.

The protection (to keep prices low)... Pro-Bono... of the western CDN domestic feed grain markets continues.

WHY do grain farmers put up with this?

WHO is running the CWB... that it continues depreciating our grain values?

I tried to do a PPO feed wheat contract... the CWB will not lock in the feed discount price till it is settled AT the ELEVATOR after delivery.

I phoned and asked why this was the case... and was told it was to protect the pool and since the CWB does not normally set up to handle feed wheat... the PPO contracts are for milling wheat.. we can not lock in a price.

PLUS... in the US... a huge chunk of the wheat would easily grade milling with a small amount of cleaning to remove ergot and hard frost.

Why don't export terminals provide these services? We deliver commercially clean grain... but who will buy it?

AND this is a system to deliver me premium prices and VALUES?

Yet we can not say ENOUGH and ship to someone else without going to JAIL?

Soooo 'Farmer' controlled at the CWB means... WHAT?

WHo do these farmer CWB directors work for?

HOW come this continues?

WHY are we grain growers political pawns in the Liberal/NDP/Bloc coalition... and why does Goodale keep preventing change at our cost?

Is it to protect the seaway and port jobs?

Sooo CWB GDC contracts... what good are they?

Where is the equality the CWB claims they exist to protect?

Are the grain growers who have their livelihoods torpedoed... in western Canada... the folks actually voting in this election?

WHO even CARES?

Not Goodale nor his Liberano Quebec/NDP extortionists.

So crank up the safety net programs... low prices like Russian farmers
...here we come again. The rain, frost, and ergot are not enough...

[Steve_Winkler]

I was going to attempt the same thing, use a FPC to lock in a Feed price before the spreads get any worse. Elevator guys didn't know if that was possible and after talking to my CWB rep, found out it was not, or rather contingent on delivery. What a crock. Try to set a price to help offset a bad quality crop and you can't. If all the elevators weren't full, I guess I could have done some, but that scenario does not exist and won't for weeks. Like Tom said, what is the point of a GDC if pricing is dependent on delivery day?

I think my days of growing wheat could be finished, frost CWB no free market = anguish.

[charliep]

Here is a comment from a news piece I get most mornings.


The CWB has effectively become a FOB buyer of barley – both malt (CashPlus) and feed (GDCs); if its works for barley, shouldn’t it work for wheat as well?

Again, good questions for the CWB director elections.

[stubblejumper]

information

Offer Signup
start date Signup
end date Signup termination
date Call for
delivery
by (date) Stations
No. 1
(Parrish & Heimbecker)
Sep 28, 2010
Extended to
Oct 22, 2010
N/A
Oct 10, 2010
Amazon, Hamlin, Langbank, Quill Lake, Saskatoon, Tisdale, Yorkton

No. 2
(Louis Dreyfus)
Sep 28, 2010
Oct 10, 2010
(Closed)
Oct 10/10
Oct 10, 2010
Aberdeen

No. 3
(Viterra)
Sep 30, 2010
Oct 15, 2010
N/A
Oct 25, 2010
Acheson, Crossfield, Indus, Killam, Lavoy, Lacombe East, Star, Stettler, Trochu, Vulcan


Farmers can sign up by contacting their local elevator agent.

[charliep]

Fair enough. Here is the link.

[URL="http://www.cwb.ca/public/en/farmers/contracts/guaranteed/#feedwheat"]feed wheat gdc contracts[/URL]

If you look above, the CWB offers some almost equivalent to cash prices for feed barley. Why not feed wheat? Why would any farmer deliver anything these days (particularly feed
grains) without knowing a price? I note the fixed payment payment calculations are among the most complex and least market based of any bureaucratic process the CWB is involved in.
You can't lock in the basis/fixed payment until the time of delivery as indicated in the other posts. Why?

Why the restriction on grain companies/locations? Why not let the grain companies source and package (perhaps with non board deliveries) in a way that gives more equal access to all
western Canadian farmers. It would seem to me the CWB and grain companies with farmers left out of the deal/only included as an after thought to deliver grain.

[charliep]

Interesting Viterra got all the Alberta GDC. Locations are also interesting with a
major grouping up and down highway 2 and a little swing to highway 36. Not
talked about here but most elevators here plugged to the rafters.

[charliep]

You guys are my canaries in the mine shaft. Are your grain company sales
contacting you about feed wheat/the GDC program? Are they cutting
deals/offering some time of EPO program similar to feed barley? Why would
any farmer sign a contract without knowing close to a final price? Why are
feed barley and feed wheat treated differently by the CWB?

[TOM4CWB]

Charlie,

How do we do a CWRS feed GDC... when there is no assurance when delivery will happen... and at what price?

PPO contracts are the only way to assure a return... but

There is no room for the feed wheat, no CWB shipping; Therefore how do we sign up a GDC? This is crazy!

[charliep]

A good question for stubblejumper and the CWB. The guananteed
delivery contracts as posted on the CWB website indicate delivery
opportunity at Viterra elevators in specific Alberta points. No
indications is given on volume but there is a signup period and at
least some commitment as to when delivery will start from what I
can see. Why you can't lock a price in or at least a high portion of
the total payments again is a good question for the CWB. An
election year and this should be a question that is being asked
director canidates in the odd numbered districts.

Interesting the CWB and grain companies do the dance to manage
their risk around delivery, efficient logistics and price risk. The
farmer is effectively left out of this process and their risk is left 100
% on their (or better yet your) shoulders. This is in a system when
PPO spreads are not market based (CWB initial payments) and when
included with the feed discount can create some extremely variable
results in terms of FPC payment based on the day a farmer delivers.
No way for a farmer to manage this risk. I can't explain it. Maybe
someone else can.

Off topic but is there a second candidate in district 5? How many
will take the time to vote?

[wmoebis]

Charlie,
With all due respect, I would rather you be our canary in our mines. You have posted very interested questions and perspectives. Why don't you ask these questions directly to the proper heads of the CWB and all the grain companies. Let them be your canaries. They have the fisrst hand answers.When we phone we get PR people and generic answers. The wait time ussually discourages most from phoning in the first place.

I could give you some of my opinions but that is all that would be is my opinion. And hear say from others.

If you were to walk into their office and demand answers for you, to be posted here and other farm news outlets, would be much better for all.

You are the man to do it.
Then we all would be wise as owls and soar with eagles.

[charliep]

I do ask these questions and generally get the same response you would. More often, the programs are announced and I scramble like everyone else to understand them. I do have phone numbers and use them to ask questions.

Should read more but I see from this week' bulletin the CWB will have a series "A" feed wheat contract. Will put the link below but the normal signup by October 31, assessent of the market by middle of November and % call there after. I won't ask the general questions but why so many programs? The CWB has to have a logistically efficient system that attracts feed wheat forward from your bins on a boat by boat basis. It would seem everyone (grain companies, the CWB) sits on their hands with no activity until you the farmer have made a delivery commitment. You (the farmer) are asked to make a delivery commitment with no price involved - just blind faith. At the same time, there is a domestic feed market that competes for your product with a daily price (spot and forward bids). And then everyone wonders why the system doesn't work.

I see everyone getting excited about fertilizer/managing risk by forward pricing. Yet asking farmers to sign CWB feed wheat contracts with an initial payment of under $1/bu and no guarantee on final is quite acceptable. On the delivery side, you as a farmer are stuck with the choices of commit to volume with no guarantees of delivery access by the CWB or hope you nearby terminals get offered GDC contracts through the year.

The link.

[URL="http://www.cwb.ca/public/en/farmers/popups/series_contract.jsp"]series A feed wheat[/URL]

[charliep]

When I am doing most of the posting, I should ask why. Numbers are too interesting.

Here is my calculation on feed wheat using an fpc. Initial payment $78/tonne port or $25 ish back at the elevator. fpc top up CWRS based feed wheat $166.41/tonne assuming you signed yesterday (difference Oct. 12 FPC and initial 1 CWRS 13.5 - paid in 10 business days) minus a further $13.28 feed adjustment or $178/tonne in your pocket ($4.75/bu if this is easier).

Why not just put $4.75/bu bid in the country and by pass the crap?

[charliep]

Actually $4.85/bu. Math challenged. Close enough to $5/bu to make it happen with some trucking premiums, etc.

[Steve_Winkler]

I believe your figures are correct Charlie, at least
for my area near Indus. Thus my eagerness to
sell some or all of my feed wheat for that price. I
have received $4.75/bu. for #1 before!!
On the phone each day to see if I can squeeze
some into the elevators, maybe late this week,
but not much volume, my locals are stuffed too.
I am also one who does not like that type of
open ended pricing.

[TOM4CWB]

Charlie,

This is but a symptom of the CWB mentality.

Like 2008 when the CWB got squeezed and was short millions of tonnes... and M-Wheat shot up to $25/bu. The commercials laughed all the way to the bank... while western Canadian farmers lost $$$hundreds of millions on the CWB positions that got cornered.

How stupid does the CWB think we are?

How is this any different?

With May 11 corn at $5.85/bu the feed wheat sales for 62lb frosted wheat should net us at least $5.50/bu. But the CWB is in charge... just like they were in Jan-Mar/08. Same folks... same problem... I will be surprised if not the same result. $$$100's of millions left on the table; a totally distorted market for grain... and western Canada cut out of the market AGAIN.

When were the last major feed barley sales made? When the CWB had to compete and sell in a dual market.

Then the CDN COurts... at the request of the CWB... ended our market opportunity.

The CWB monopoly law is here to protect everyone BUT grain farmers!

Pro-bono cheap grain reserves on call for the CDN livestock/millers/consumers.