What Happens When the CWB Goes Away? Mike Krueger

[FarmRanger]

When you have to please customers and
legislation guarantees don't have to worry about
what your suppliers think, this is the natural
outcome.

[parsley]

When you have to ask why any government is
continuing legislating wheat marketing, you know
there is open season on a free society. Pars

[Braveheart]

Charlie, how in the future would you see the CWB attracting supplies? The private trade uses strengthened basis to attract grain. A new tool they using is bundling seed, chem, and basis specials together.

But back to the question, how can the CWB attract supplies? They had a captive supply until 2012. Forward selling was easy under that system.

It sounds like North Africa had a "buyers market" with the board monopoly in place. Surity of supply, overdelivery of contract specs, and good delivery logistics sound sweet.

I know nothing about North Africa, but I know some of the players in the private trade and I am confident they can supply the durum, deliver on time, but not over deliver specs. The question is the forward selling.

Without a futures contract would or could grain co's or the CWB do back to back flat sales?

While some farmers may have some unease, I know business will happen. Somehow.

[Jfreedom]

Just reinforces what I have thought for a long
time the board has lost it's way and cares more
about the customers and their needs at all cost
because they are not held accountable to
farmers. Had they spent more time on the
farmers they were supposed to serve we would
not be seeing the antics that they organized
today.

[mbratrud]

Cant help but repost what i put on this forum back on Aug 14 My thoughts about Inventory Financing are even made easier with on going Government guarantees.

There are lots of things the CWB can do post monopoly..

I wish the Board of Directors of our organization (although it seems it more some than others) needs to start looking at the future.

The CWB as it is today is run its course and its time to move on. I am really getting tired of the Mr. Oberg and his propaganda machine spending our money. Who is footing the bill for the other side of the argument?

There are many important issues that need to be addressed, and I am wondering who is working on them? For instance who is looking at Transportation Issues, Inventory Financing for Terminals, Contracts and Cash advances, and maintaining customer relationships through the transition. What will the new organization look like?

The plebiscite that is out there is a joke. We know that when the ballot goes to every Tom, Dick and Harry that ever had a Permit book, the results will be skewed and do not show the will of many of the actual producers of Wheat and Barley.

Lets look at the problems that we face immediately in a change in the CWB.

Transportation - One common concern and one shared by me would be access of Grain Transportation to all areas and companies. The current Car allocation system, gives the CWB control over many cars that they try to distribute fairly. Instead of looking at this as a problem, maybe it is an opportunity to fix our transportation system. Some ideas that would go a long way towards to ensuring equal service opportunity would be opening up the rail running rights. Let the CWB II Transportation arm control the Cars the Farmers and the Government own. CWB II could be very key in a new Rail Allocation System.

Cash advances; there is no reason that CWB II Finance could not operate a Bank where producers could deposit Money into an account that makes a little better than Bank interest. Other services they could offer would be Cash advances or operating lines, to Grain Co's and Farmers. Would need seed money from Government, and if 50000 farmers had on Average of $5000 on deposit with them that’s $250000000 they could put to work. Of Course it wouldn't be interest free, but it could be low interest.

Grain Inventory Financing, a major concern is Grain Inventory Financing for Grain Terminals. Solution, more Condo Storage units, Companies can sell some of there storage to Farmers and Even the CWB Marketing Arm. Why Couldn’t CWB II buy or Lease space from Grain Companies to help them do business in the future? There is no way that most of the Grain Companies could finance their own inventories, and as a result have extra Capacity. For Example In Weyburn alone if the Terminal Capacity was full it would take more than 50 million to Finance the Inventory. Why would some of these companies not Lease some Storage to CWB II and establish a throughput agreement.

Pooling, despite Mr. Oberg's comments this is very doable for farmers that want that sort of thing. Producers would have to commit acres ahead of time and sign auditable contracts. Hell they could do it for all Grains not just Wheat and Barley.

Existing contracts, if they really cared about this they would have had it solved or still could. A like John Depape mentioned it’s outside the CWB Mandate to sell what would be 2012 crop. And this year’s pool should be a tonnage and grade commitment to be in the pool otherwise your work off the PPO’s, which would reduce the risk of making an uncovered contract.

Enough verbal vomit from me, I’m sure I have exposed myself to major picking apart, (especially grammatically) and believe me the above suggestions are not deeply thought out but just thrown out there. My point is its time to start looking at solutions. I want Market choice but I also think there are many talented people at the CWB and they are doing many good things, and I believe there can be a role for them in the future. I urge them to start thinking outside the box and looking forward.

Message to Mr. Ritz its time to be absolutely clear, and stop all this nonsense. If members of the current Board are struggling with change accept their resignations and move forward with some vision.

What are your thoughts on how CWB II could look?

[Braveheart]

Mbratrud, good questions and thoughts although the cash advance administration already handed off I believe.

My thoughts are this: First the CWB old commissioners always stressed the board had 3 pillars, single desk, pooling, and government guarantees.
So the single desk goes, focus on the other two.

CWB could position itself in the industry as the "Pooling Provider". They have experience in this. The CWB could run multiple pools, shorter pools, longer pools (god forbid), but what I'm really saying is adapt pooling into a more flexible and valuable tool for farmers. After farmers have booked enough forward contracted grain to cover obvious cashflow needs, pooling could be an attractive way to manage price risk on some remaining inventories.

The government guarantee will remain for awhile so that's moot.

Contracts with the CWB to change. Current contracts are more of a loose arrangement of offer by farmer, accept some or all or none by CWB. Contracts would have to be binding on both parties.

After the North Africa discussion I really wonder if the third pillar, the single desk, was really a pillar to support buyers and not add value to the farmers.

[freewheat]

WHy do we need the cwb in a voluntary way? I fail to see why we need any cwb at all. I suppose for those who wish to pool, but really, why not let it die? Why do we care if they survive at all/ Just curious.

[mustardman]

The voluntary pool is a red herring.It will die. It will be run by political hacks. The gov't doesn't want it to survive

[wd9]

As long as it is a true open market in terms of that voluntary CWB.

[Francksaskfarmer]

Free wheat, I understand why you might feel this
way about the CWB and from the sound of it you
would rather let it go.
I feel that the CWB could be a kind of pressure
valve in the canadian marketplace. With the
proper management and programs it could be an
appealing option and would provide more
competition where we as farmers would have
some control. Much like FCC (and I think I recall
the fact that you are not a fan of FCC either) it is
an option that can make sense.
Take the twisted ideology away and put business
forward and it ought to work. What mbratrud
suggested back in August has a lot of merit, if the
8 amigos had any business sense and would
have acted in the interest of the corporation on
may 3rd the CWB would still have cash advance
(which can be a great income generator, we as
farmers still benefit from that with the CCGA) it
would not have lost some "key employees" to
foreign companies on top of that. There is a
voluntary model that could work, and any time
wasted is less of a chance to have the cwb assets
that we have paid for, work for us.
When the BOD is axed I hope that the new
appointed directors are people that have the will
to make it work, with the creativity and business
savyness to come up with options that even you
might find appealing. These new directors need to
Be willing to commit 100% of there production (I
say willing not obligated) and act on it. I
personally would not mind taking on the
challenge, but on the other end I appreciate the
open market of the other crops. Much time has
been waisted. I was told a week ago (by one of
the 8) that the CWB staff has been coming to the
bod with options that were turned down because
of ideology and Henri confirmed it when he
alluded to the staff discouragement.
This court challenge is costing us money not so
much in the cost of the legal action but the lost
opportunities of pricing wether through CWB or
the trade.
The 8 amigos are on a criminal sabotage mission.
They have to be stopped before we lose it all,
these are your and my assets, they have been
very mismanaged and as much as I don't mind
the private trade I don't care for giving them
anymore than I have too.
I encourage anybody that wants to speed up the
transition to support the wcwga legal action.
Let's put this one to rest and build for the future!