Marketing Grain Without the CWB

[Burbert]

tommyboy, Sell your grain on the open
market, that ALREADY EXISTS, your pals at
the grain company will surely give you a
special deal, cousin your so forward
lookin and god feeern. Run wit the money
to the bank, where your banker friend will
help you out. The way you think its all
win, win, win, wind...........

[chuckChuck]

Many of the CWB haters are dreaming of the spot prices being offered in the US.

Charlie what impact do you think an open market will have on the US prices? It is well known that the CWB uses a measured and managed approach to US sales of durum and spring wheat, being carefull not to sell to much in the US and lower prices. They also try to keep them out of the US elevator system for obvious reasons and go to the end users direct.

But in an open market, is there not a risk of a less managed market that will especially lower durum prices? In a period of oversupply in which the multinationals can pick and choose origin, why would they always offer the top price in North America if suddenly they have access to the majority of exportable durum in the world from Canada?

[charliep]

For a short term while the market becomes accustomed to a new situation - maybe some impact. Risk for this period is behavior like a kid with a new toy. Longer term (more than my opinion), I suspect the market will become accustomed to the new situation. As you have highlighted over time, the US is not a answer for everything nor will it be in the future. Competition in Canada and I will a bet a pretty disciplined prairie farmer will move durum into the US when warranted but not in a way that blows up the US market.

The CWB potentially has a role as an aggegator of supplies and a representative for the farmer in an open market. As highlighted by Brenda, there needs to be a discussion of the products and services the new will offer. If they have farmer confidence backed by contracted volumes, then there is a role for them in the future.

[LWeber]

Oh yes the diversion...without dealing with the problem.

Prices available to farmers today September 22 for milling durum:

France - CAD$13.01
USA - CAD$12.10
Australia - CAD$9.15
Western Canada FPC: - CAD$7.46

The CWB is asking $16.78 per bushel in the St. Lawrence.

You think that makes me a CWB hater...

What I despise is seeing our farmers getting in the ass year in and year out and people defending that incompetence...

[TOM4CWB]

Burbert;

You said:

"Quitin time is gettin close. Not long
now and you kin take this job and shovel it.

Pensions round the corner, rrsps, indexing, Fu&* gag.

Gonna enjoy wathin
the young whizzbangs doin there tings.
And oh by the way, along the ways, I'm
gonna yap me trap and make it harder and hard fer Comedian gag businessss ta exist.

Sour g****s you bet, ya ain't
heard anything yet. Go angribusiness
go...... "

So you have become a 'pro-troll' contributor to Agri-ville.

Thanks for telling us why you are annoying!

Sad to hear you gave up. Hope you enjoy retirement more than farming. Hard to believe you will... being bitter often brings a bitter end!

All the best!

Cheers!!!

[Burbert]

Tommietoy, read what I sayed, retirement
is around the corner. Nut here yet soos
I'm stickin round fer a while. Don't
git to excited either, cause I'll always
monitor the geniuses on this site and
put in my 2 cents worth. Why you ask?
Cousin I can't stand bullies, fools er
phonys, er politicos wit an agenda!
Nope even as a tired Comedian framer,
yous ain't gettin ridda me. Whinnning
and snivelin has been a way of life fer
to long ta quit now..... To bad though,
hope you don't get to sad, hearin this
upliftin new broadcast........

[chuckChuck]

L Weber. In order to understand all the prices for durum you mentioned we need the price setting structure for each location and for the CWB FPC and asking price. Without some analysis as to what is going on, it is speculative to say that farmers are getting screwed.

In 2007/2008 I believe farmers were pissed off when US durum values hit $20 per bu. for awhile. I think the CWB pool return ending up being $12-13 net back to producers. It turned out the average selling price in the US was around $8-10 a bu. because most of the farmers contracted their durum in the spring at $7.00. ( working from memory here)

In the end the overall returns were better for Canadian farmers. Individuals in the US did better. Those who held on and sold at the peak. Which was very few if the prices rose to $20.

That said, generalized statements are usually not true. In this case the CWB paid off better.

The most important information comes from the actual sales data that Directors see. They are supposed to be getting sales value comparisons with the competition. In order to know what is going on you need to see the whole picture not just selected pieces with no explanation.

[LWeber]

For 8 years you got sucked in...and it continues today.

What background research did you do to make sure farmers were not getting screwed when you looked at the sales?

Let's recap.

1) CWB employees maintain the actual sales data.

2) CWB employees file the asking price in other regions at the time of their sales.

3) CWB employees determine what premium was realized.

That is akin to doing your own performance appraisals.


The CWB asking price for durum in the St. Lawrence was $16.78 A BUSHEL yesterday. On the date of the last PRO it was $16.09.

The asking price went up $25.35/MT from Aug.25 to Sept. 22.

The PRO went down $6.25/MT from Aug.25 to Sept. 22.

The FPC went down $26.09 during the same period.

Analyze that without kool-aid...

[charliep]

I'll add another question.

Why is a $2/bu discount accept for a fixed price contract relative to
the payment forecast? Where does the $2/bu go?

The CWB could do a cash plus for durum similar to malt barley. They
could do 200 % EPO like they did for feed wheat. They could move to
shorter pooling periods like they did for feed barley. All would
improve price signals and cash flow to farmers while keeping risk to
the overall CWB price pools minimal.

The CWB only seems to be creative on contracts when it has to be.
Why a 200 % EPO in 20010/11 but nothing 2011/12? In the new world
(read open market), the CWB will have to think outside the box in
terms of being competitive and managing its own risk. Competition
will be good for organization.