Percentage Pooled Price versus Cash Price ater August 1

[charliep]

A question that I am getting asked to make assumptions for government programs/other activities. What do you think the split between the volume of wheat sold using a pooled price (likely CWB run but could be other companies as well) and that sold for a cash price (paid in full on delivery). 50 % pooled/50 % cash? 30 % pooled/70 % cash? 10 % pooled/90 % cash? Not looking for a political debate. Just a gut feel on what you and your neighbors are likely to do after August 1.

Any thoughts about what types of contracts the CWB will have to offer to get farmer delivery commitment. Lots of mention in Agriville of shorter pooling periods. More pricing pools directly related to particular classes, grades, proteins? Other ideas?

[FarmForProfit]

a shorter pooling period, specific
delivery periods, and competitive
pricing may attract (I started with 10%
but it could be 100% of my wheat.)
Depends on cash price vs PRO. And a
revamp of the BOD so they have
credibility because while farming is a
business I'm still bitter.

[freewheat]

In my area, no one has been growing
wheat for several years. Only the
cwb'ers have been. I would say around
here 95% plus would never pool their
wheat in a million years. Guys here went
to oats and canary for the freedom they
offer. The two holdouts I know who are
cwb'ers will maybe pool, until they
realize that like the canola they grow,
that getting a decent price up front is
better. And then "here" it will be 100%
non-pooled. It may take a year or two to
move from 95% to 100%, but I am
confident this will happen.

[AdamSmith]

For my farm 100% cash.

#1 have zero idea WHAT kind of program the new cwb will have.

#2 have zero idea WHO will be managing the place.

#3 I doubt any private company will offer pooling.

#4 the new cwb and whoever is going to manage it will have zero track record to base a decision upon.

#5 the costs of marketing through the cwb will be higher than dealing directly with a grain co.

#6 I've spent the better part of the last twenty years trying to get unshackled from the cwb, why would I now voluntarily continue to deal with them?

As far as other farmers? Don't know and don't care.

But my guess will be no more than 15% of the grain with a strong likelihood of less than 5% of the grain.

In fact if I was the new management of the cwb I would limit the amount to a low low %age until they figure out how things are going to work and how well they will perform.

It will be better for them in the long run for them to set the bar really low and show that they can clear it as opposed to setting the bar too high and looking like dorks and out of their league.

[AdamSmith]

Charlie,

decision #1 for the neopool will be deciding what their mission is. Are they simply wanting to offer averaging through pooling? is that enough? or will they have to beat the avg.? What's their benchmark for determining success or failure in acieving their goals?

#2 The costs for their service? Maintaining 600 employees and keeping the lights and heat on at 423 Main is not cheap.

#3 assuming only 5% of the crop, do they go after only the big foriegn buyers that pay the big bucks with two or three big sales? or do they go for many smaller sales and spread the risk that way?

Too many variables to be worked out before I would want to deal with them.

[newguy]

I really would like to sell 50% through the CWB and ship through producer cars. BUT...The way the CWB is performing and not willing to downsize and change it is unlikely I will be able to sell a bushel through them.It is like they want to kill themselves and blame the feds for it.

[wilagro]

I doubt that there will be little change from present for a while. I could be wrong...but I would predict that the new revamped CWB will offer little for the farmer in service or new marketing programs and the new politically appointed board will suggest that it be closed down, sold or disposed of in some other manner within two to three years of their mandate. The government does not want this new entity to compete against the private grain trade from all utterances that they have made so far. Other than the stated support that they have pledged there will be no surfeit of monies for the BOD to innovate with or waste.

In other words, my guess is that it is a thinly disguised planned shutdown.

[malta]

Both Viagra and Cargill are talking of private pools. With those included I put the numbers for next crop year at 30% pooled and 70 % cash price. In future crop years the numbers are more likely 40-60 if the pools preform as expected in 2012. For me it will be all cash, I like the certainty.

[AdamSmith]

If Cargils pool is like their proposed canola averging deal, thats all it is, an average price. eg. 100t over a 200 day period they would price .5t per day.

For alot less money I could hire my 19 yearold daughter with zero marketing experience to do that and get the same result.

Pooling sales and pooling or averging price are two totally seperate things.

My prediction is, in the next three years the amount of wheat pooled and the amount of canola pooled will be the same.

Unless of course the cwb has been right all along and we may be able market our canola by ourselves but were sure not smart enough to market our wheat.

[charliep]

wilagro

Had reason to look at the CWB spring survey 2011. From their own survey, 45 % of western farmers want a dual market for wheat (41 % single desk only). In Aberta, the percent of farmers who favored a dual market for wheat was 56 % (26 % favored single desk). Does this not indicate farmers will use the CWB in an open if they can demonstrate value for their businesses?

[newguy]

Since spring the CWB has lost alot of support. Move half of the single desk supporters over to dual marketing and you will be closer.

[wilagro]

charliep: Perhaps...I guess time will tell. It all depends on how the new non-farmer directed CWB presents itself. A lot of farmers that I know are really pissed off that the elected BOD will be dismissed once the new legislation goes through. Why in Hell go through the process of regional elections if the directors are going to be fired?

[Hopperbin]

I don't see much benefit in pooling wheat myself. Most likely what I will do is look for a cash contract. Wheat and barley will have to be competitive with the other options and in time the market will set acres like it is supposed to. A lot of people I talk to are afraid of CWRSW this coming year, I for one would like to try some. Possibly even try malt barley again. Local Feed market is good now I don't think it will hold. Marketting wheat will become simplified in my opinion. Make a few phone calls and sell to the highest bidder. Or offer the grain at a certain price. Haul in the contracted month.

[bucket]

Some elevator managers have been asking about a pooling option. I said I might consider it depending on price and delivery. I would prefer to have some going in right off the combine at a reasonable price and full payment. Then if they pay me to store, i would consider a pooling option. Its all about the dollars. Show me the money!!!