Why the Process Around Adjustment Payments

[stubblejumper]

The pasta plant in North Dakota is now owned by Viterra.

[dmlfarmer]

All winter we have been told of the high wheat prices that US producers were getting. $12 plus wheat at the farm gate. That it was the CWB standing in the way of those prices for western Canadian growers.

But my question is, why is the average US farm gate price for wheat in 2010-11 only $5.65 according to the May 11, 2011 WASDE. US growers have never been saddled with a wheat board, they have years of experience in the free marketing of wheat, and oddles of analysts and advisors. Yet last year the average US farm gate price is no better than the CWB average in spite of record high world wheat prices. WHY?

It takes a lot of $3.00 and $4.00 wheat to average and $12.00 wheat down to $5.65.

"I really hope that the "people exist who understand this stuff" can do better in Canada than they did last year in the US.

[charliep]

Numbers to go with the above comments.

[URL="http://www.ers.usda.gov/data/wheat/YBtable18.asp"]US average wheat prices[/URL]

US prices are for a June to July crop year. CWB for a August to July with the pooling year more like October to September.

If you look at 2009/10 (last final report), the weighted average price for Canadian farmers was about $4.65/bu versus $4.87/bu for all wheat US and $5.16/bu for spring wheat.

Weighted average durum price for Canadian farmers - $4/bu versus US farmer - $5.47/bu.

[highwayman]

Add in the cost of storing durum from years past because of no sales opportunities in Canada and the weighted average price becomes a hell of a lot less then $4 last year. But I'm sure the board lovers here will have a rebuttal for the pathetic performance of their sacred cow.

[sumdumguy]

Who says the u.s. Is the only market?

Special crop marketers seem to find markets all
over the world.

I believe wheat and barley and all value-added
products will fit in perfectly.

[wmoebis]

I wonder what the process is?
Has the Gov't ever not approved a payment?
What is the criteria? Have they ever said make a bigger/smaller payment than asked for?
What dept makes the approvel? Is it a single person or a board?
Why does it take so kong to get approvel and how much does this cost us?
If changes are realy wanted by Gov't, wouldn't this have been a place to start, by speeding payments up and making them closer to real value?

Just things to make you go Hmmm on a rainy day.

[charliep]

I wonder what the process is?

THE PROCESS IS THE SAME ONE THAT HAS BEEN USED FOR THE LAST 60 PLUS YEARS. THERE HAVE BEEN NO CHANGES. CWB OPERATIONS/B OF D PUTS IN A RECOMMENDATION. THE RECOMMENDATION IS REVIEWED BY 3 DEPARTMENTS - AAFC, FINANCE AND FORGET THE THIRD. THEIR AGREEMENT/CONCERNS GO THE MINISTER RESPONSIBLE FOR THE CWB. SUSPECT THEY ACT ON THE ADVICE OF THE FEDERAL DEPARTMENTS. TAKES 6 TO 8 WEEKS - ALWAYS HAS.

Has the Gov't ever not approved a payment? What is the criteria? Have they ever said make a bigger/smaller payment than asked for?

NO WAY OF KNOWING OTHER THAN RECENT CWB PRESS RELEASES. FLOW OF INFORMATION BETWEEN THE GOVERNMENT AND THE CWB WOULD BE CONFIDENTIAL (COULD MAYBE USE ACCESS TO INFORMATION TO CHECK). I WOULD GUESS THAT THE CWB RECOMMENDATION WOULD BE ACCEPTED 99 % OF THE TIME BUT NO OF VARIFYING.

What dept makes the approvel? Is it a single person or a board? Why does it take so kong to get approvel and how much does this cost us?

ULTIMATELY IT IS THE MINISTER THAT MAKES THE DECISION ALTHOUGH DUE DILIGENCE IS APPLIED BY OTHER DEPARTMENTS (RISK OF OVERPAYMENT ON CWB POOL ACCOUNTS RESTS WITH THE TAXPAYER). COST TO YOU AS A FARMER FOR ADMINISTRATION ONCE THE CWB HAS PROVIDED THE RECOMMENDATION IS ZERO (EXCEPT INTEREST ON PAYMENTS NOT RECIEVED). TAXPAYER (INCLUDING YOU) PAYS THE COSTS.

If changes are realy wanted by Gov't, wouldn't this have been a place to start, by speeding payments up and making them closer to real value?

NO ANSWER. A PROPOSAL WAS IN PLACE A YEAR AGO TO SIMPLIFY THE PROCESS BUT WAS NEVER ACTED ON FOR OTHER REASONS (VOTER LIST). BACK AT YOU. WHY FOR 60 YEARS HAVE FARMERS ACCEPTED THIS PROCESS? THE CWB HAS INDICATED IT CAN HANDLE THE RISK OF ADJUSTING INITIAL PAYMENTS AT THE END OF THE CROP YEAR. A PENNY A BUSHEL PREMIUM FOR THE 90 % EPO IS NOT A HIGH COST. EVEN MORE FUNDAMENTAL, WHY SHOULD THE TAXPAYER COVER THE RISK OF OVERPAYMENT ON CWB POOLS - PARTICULARY IN A HIGH PRICED/PAYMENT ONE LIKE 2010/11? THE ANSWER TO THIS QUESTION IS IT REQUIRES A CHANGE TO THE CWB BUT THAT OPENS UP A BIGGER CAN OF WORMS.

Just things to make you go Hmmm on a rainy day.

[charliep]

last sentence should be "REQUIRES A CHANGE TO THE CWB ACT".

[charliep]

Bill C-27 and proposed changes to speed up payments give hints as to the current process. The process is written into the CWB act.

[URL="http://www.parl.gc.ca/About/Parliament/LegislativeSummaries/bills_ls.asp?Language=E&ls=c27&source=library_prb& Parl=40&Ses=3#fn15"]Bill C-27[/URL]

From the press release about the bill (not passed by the way).

The legislation eliminates a step in the process to pay producers for their grain. The current system requires analysis from the Department of Agriculture and the Department of Finance, as well as Treasury Board approval before payments are delivered. Under the new legislation, Treasury Board approval will no longer be required. This could speed up the payment process by as much as three weeks.

Pretty boring stuff at seeding time but the mechanics involved.

[wilagro]

Starting Aug of 2012 you guys are gonna get fleeced like good little sheep. AND you are going to like it.

Baaahhhhh