The Monopoly Behind The Mineral

[chuckChuck]

Jdepape. I do not and likely you do not have enough information to look at how the CWB is handling the world durum market. Unless you are involved in the day to day world market it is hard to know exactly what is going on in the marketplace. The CWB are the ones who can supply the data and market analysis and answer your specific questions.

But I do know that comparing what the US spot market price is to a pooled price in Canada is not a fair comparison. 1. Domestic usage is much higher in the US. 2.They are closer to majority of the mills in their domestic market which affects transport costs and farmer returns. 3. We can't sell all our durum into US market.

If you go back a couple of years ago durum was bringing $20 per bushel in the US. Canadian farmers ended up with around $12 in the pool. The majority of US farmers sold for under $7. Sure some farmers sold much higher. But on average the returns were higher for Canadian producers at $12.

Pooled prices will never reflect the peak of any market. Most market advisers advise producers not to guess where the market is going but to hedge price risk by selling a portion of their crop throughout the marketing year. Unless you have a crystal ball, you don't know what next year supply and demand are going to be.

[bucket]

Can some of these board supporters explain to me how canpotex works?

I have a pretty good idea and it is nothing like the cwb. Apples and oranges.

For one thing canpotex ensures profits. Won't make a deal on members behalf unless there is money being made.

Big difference right there.

[chuckChuck]

For those of you looking for information on what prices farmers received on average and in each month in the US go to the link below. Note that US farmers received only around $9.00 on average for durum in 2007/2008. Our durum brought around 12.00 in the pool if my memory serves me correctly.

http://www.ers.usda.gov/Data/Wheat/YBtable18.asp

[chuckChuck]

make that 9.92 in 2007/2008 Durum

[chuckChuck]

JDepape. Please note that the USDA is reporting the weighted average farmer selling price in the US for September 2010 is $5.01 per bushel

http://www.ers.usda.gov/Data/Wheat/YBtable18.asp

[jdepape]

Many US durum farmers sell up to half their crop at seeding time. USDA stats don't take that into account - they just look at spot street prices x sales. The guys I talk to say they usually can sell foward enough to cover ALL productio costs.

Again - nobody's talking about Canadians selling into the US. Don't you ever wonder how they can be so profitable down there with good prices while up here durum farmers are going broke? What are we doing wrong?

Please tell me why anyone would embrace this dysfunctional system we've got?

[bigsteve]

I find that most CWB supporters come from farms that mainly grow only wheat and barley!They have very little experience marketing off-bord crops which inturn gives them insecurity in marketing all there crops.They tend to think that there ideology is genetic.eg.there fathers thought this way. Its time to think 0n your own guys and try to look at a bigger picture.

[newguy]

The US sold early and averaged 9 and us 12 but the next year when they sold early those numbers were opposite. Which makes me think is it good marketing or given enough time and chances anyone can hit a high once in a while. Not worth paying someone to flip a coin and only expect him to be right 50% of the time.

[chuckChuck]

Jedape. What would be the price of durum in the US if Canadian farmers and traders had unlimited access to that market outside of the CWB? Lower obviously. How long would market access last if US elevators were full of Canadian durum? Not long. Many US grain farmers are members of small to medium sized Cooperatives which handle their grain. Some years they pay out huge dividends. Movement is probably better in the US because of larger domestic usage. We have lower domestic usage and also have to export our durum to algeria, Morocco,the EU and numerous other smaller customers who have lower prices because of freight and different market conditions. Obviously the world has too much durum if movement is that poor.

[ColevilleH2S]

I wonder if Westeel, Darmani, Twister etal. pay kick-backs to the CWB every time the CWB forces Durum farmers to hold grain over to the next crop year. And then again to the year after that >:-(

How many US farmers have to store their Durum for three years?....and then sell it for 1/3 the price it was worth in 07/08. Just who do they think they are making decisions like that???

[jdepape]

chuckChuck:

Are you saying that the CWB is limiting or holding back sales to the US, a premium market? Is that why the initial is so low?

Let’s do some math (plug in your own numbers):

It’s 2009-10 and by Christmas, the CWB is willing to take only 40% of your durum crop. Your initial payment is roughly $3.50/bu. This means, with a yield of <b>XXbu/acre</b>, you received a total of about <b>$XX/acre</b> for a crop that cost you <b>$XX</b> to produce. You are left with a deficit of about <b>$XX/acre</b>, or about <b>$XX,XXX per quarter</b> of durum.

You have to sell something else to cover the production cost of your durum.

<b>How much canola do you have to sell to cover the cost of your durum AND the cost of the canola?</b>

AGAIN – NO ONE IS PROMOTING THE IDEA OF SHIPPING ANYTHING TO THE US. JUST TELL ME THIS – WHY DO YOU DEFEND OUR DYSFUNCTIONAL SYSTEM WHICH IS CAUSING PEOPLE TO GO BROKE – WHEN THERE IS A WORKING MODEL NEXT DOOR?

WHEN YOU HAVE A PIECE OF EQUIPMENT THAT DOESN’T WORK, DO YOU SIMPLY THROW YOUR HANDS UP IN THE AIR AND SAY “THAT’S THE WAY IT IS, BECAUSE……”? OR DO YOU FIX OR REPLACE IT?

[fjlip]

For a "wheat cartel", Canpotex type scenario that actually dictated prices, I agree at least 50% of wheat trade would be needed, as in all of Canada, the US and Australia. Is Canpotex optional, or do all potash mines HAVE to market through it? Any body know?

[fjlip]

Off topic, jdepape, how do you change your font character size and bold your post?

[ColevilleH2S]

Hey fjlip check this out.


<marquee bgcolor="#cccccc" loop="-1" scrollamount="2" width="100%">The CWB can just FFFade away</marquee>

HTML code is fun <font face="Times New Roman" size="-1" color="#ff0000">(in a nerdy kinda way)</font>.

[Fransisco]

Nice one there ColevilleH2S! I didn't know that you could do that with html code.