Canada Slips on CWB

[Kodiak]

So cityguy, if a voluntary pool captures anywhere from 1% to 10%, or 20%, what does that indicate? Is it that pooling invariably has too many costs and is uncompetitive, is poorly managed, or simply not an attractive option for most farmers? In any case, its market share will be its market share, determined solely by the farmers themselves in a free and open environment. And ultimately if it fails to capture any business, what is the loss if it disappears?

[jdepape]

cityguy:
As I mentioned, the details of the CWB "costs" are not public. It would be nice (and perhaps appropriate) to know why the large difference between wheat and durum.

The pricing points for CWB grains is indeed an important factor - it is the costs to these points that the Grain Monitor is monitoring, not beyond.

These costs as reported by the Grain Monitor are "export net-backs" - the costs associated with moving these grains to export position. The costs associated with moving canola to the domestic market are not an issue here.

You say the terminal revenues may "widen the spread" - not sure what you mean.

You ask how costs compare on wheat and canola going to the west coast. Pretty much what I've given you.

You don't think that there's $20 to be taken out of the system. Read the Grain Monitor report. When grain companies compete for CWB grains through rail car tenders, they discount their revenues to win the tender. The average winning tender is over $20/tonne (paid back to the CWB upon completion of the tender). When the grain companies compete for CWB grains, they have shown they are willing to cut more than $20 out of their total revenue stream (which includes terminal handling).

You say you have no problem with the idea of dropping the single desk and having the CWB operate in an open market - but then say you're not going to drink the dual market Kool-aid logic.

The CWB operating without the single desk in an open market IS the dual market.

If a pool operates in a dual market, for some reason people think that it needs to have a dominant market share - after all, it did when it was mandatory.

You say the OWB is less than 10% MS - perhaps it is and yet that still satisfies everyone that wants what it is offering.

You say the AWB is non-existent - last I looked it had about 25% MS. Again, perhaps that is "the market" for what it is offering.

I've shown that the CWB actually buys barley from mo more than 17% of all farmers in Western Canada. In an open market, would a voluntary CWB be considered a failure at say, 10% MS in barley?

To your last question: Yes.

[jdepape]

Not sure why that posted again...
Weird.

[cityguy]

To answer Kodiak, and then I'll leave it be - you're right, don't really care whether some sort of voluntary pool is successful or not in an open market as it's the "open" market bit that is of interest. The only reason for me being a bit of a dink on duel is that I firmly believe that the government completely screwed up that barley plebesite from 3 years ago when they made it a three part question of 1) CWB as is 2)duel (or whatever the fuzzy words were) or 3) No cwb. If it had been a straight up or down 1) as is or 2) an open market that the CWB an play in if they want, I believe that we'd have an open market for barley today. Think that at least 70% would have voted for a change and that the government could have gone to the House and basically said to the Bloc that western barley growers are looking to exercise their right to self-determination, or whatever the lingo is that the Bloc uses, and who are you to say no on this clear mandate. I know basically all AV'rs will disagree with me on the point but I think that muddying the waters with "duel" has left us, actually you as I'm not a part of us, in the mud.