cwb tendering process fails

[TOM4CWB]

Charlie,

With the new high throughput terminals, and trucking of grain for hundreds of miles, paricularily westward, hasn't most of the blending that is being done, being done at the primary terminal level?

I see Cargill unloading and cleaning cars from allover Alberta at their terminals, and the other grain companies doing the same with trucks...

So, just exactly how much blending benefit is left at the terminal position???

If the grain handlers have really good quality, don't they divert it to the US or domestically to their own mills, before giving it away to the CWB?

[chaffmeister]

I tend to agree with Charlie – the grain companies will likey make sure they’ve got access to the grain before getting excited about tendering aggressively.

Concerning Tom’s comments about blending – last year the CWB became quite concerned about the quality of grain coming into the terminals in Vancouver and they blamed the reach of the high throughput inland terminals. Historically, with wheat shipped from many small locations, the quality as it came into the terminals was quite variable. For example, the CWB was able to segregate high and low end 2CWRS and provide, not just 2CWRS, but various “levels” of 2CWRS including what might be called some high end 2CWRS – basically your “really good” 2CWRS. But now with the high throughputs drawing from a much larger area, the grain companies are able to ship a more consistent quality, most of which now is a basic 2CWRS – no more high-end 2CWRS is hitting the port. This apparently has created problems with the CWB program, as they can no longer provide the really good stuff to some customers. (I have no idea whether they got a better price for it or not.)

[charliep]

The blending question is why I am keeping this thread alive. My assumption is that the market is moving from selling basis grades to selling basis quality characturistics. To make this system work, grain companies have to be able to draw from the farm bin based on what is needed (this is particularly the case with high through put elevators where the catchment area is larger). The tendering process to date has been done to capture handle.

To achieve better segregation of quality, there has to be a system of rewards that provide incentive to move specified quality product from the farm bin to the customer. First the customer has to be willing to pay for this and second everyone up and down the value chain has to be rewarded for performance (particularly if there is extra work or risk involved).