Comments in Old Crop Barley PRO Commentary

[charliep]

Too many questions. Perhaps we can both agree the barley is best served by a fluid market that is based on price signals (they who pay best get) and an effective hedging tool.

[AdamSmith]

Let's talk about solutions boys.

We can all wail and stew over what has been done and it's valuable information as far as understanding the problem but...

Farmers need solutions, real meaningful long term solutions.

The CWB today can’t even be considered a serious choice as a marketing option for barley due to their inept recent past performance.

I support choice, providing that the options available are of value and the CWB as a barley marketer is of no value to anyone at all, and they have no one to blame but themselves. It’s too bad the CWB doesn’t understand that they’ve lost barley already and that they don’t have the ethical makeup to let it go so we as farmers can salvage what demand still may exist in the off-shore market place.

Let me say this as clear I possibly can, Barley must be removed from CWB jurisdiction with no regard for a dual market at all.

To carry on otherwise is not dealing with reality.

On the other hand with wheat we still have a chance to make a voluntary system work because the CWB can still be considered a meaningful option for those who make that free choice.

[charliep]

A question to chaffmeister or tom4cwb.

What happens if as a part of international agreements Canada decides to write some of this debt off?

I realize that the government guarantees this debt but I didn't realize it is still on the CWB books.

[TOM4CWB]

Charlie,

If the debt was written off, the CWB would simply lose most of the approx. 75mil/year churning income from these debts.

The CWB directors have been worried about this happening since they took office.

Really, any advantage the CWB has today in cost savings is from this churning income.

I agree AdamSmith on the CWB and barley, the CWB must get out of distorting this market place.

And to prevent CWB distortions may well mean that the only viable solution is to, get out of the market totally.

The CWB track history on barley is so bad that there destabilising effect and historical practices mean that almost no-one trusts them at all any more...


When do we have our vote on removing barley from the CWB?

[parsley]

Charliep,

The Canadian Government can go to the money markets and borrow again, but this option is hobbled by bullish interest rates, so this option is not a particularly appetizing one.

Would the "CWB-Government" (they are one and the same) offer the defaulting countries a contract revision with a deal that cannot be turned down, plus a request that some sort of minimum payment be made, with the defaulting countries unable to resist? This seems to be the template they have used for years.

A couple of boatloads of really cheaply-bought wheat to the debtor countries and a token debt-servicing payment made by them to the Canadian Government will:
1 Save borrowing on the money markets

2. Provide Canadians with a kinder, more giving profile, so we feel fuzzy all over (popular during political campaigns).

3. Wrack up a huge nation to nation credit sheet by buying wheat cheap as a Government and "donating" it at an inflated value

4. Provide more of an international profile. Think of the headlines. "Canada forgives 30M debt of Gorzoblodina" Living up to our give-away obligations. Easy to do when farmers roll over for $3.00/bu, with that wheat evaluated at $12.00/bu. on the foreign balance sheet.

Hope you don't mind me commenting, charliep.
Parsley

[AdamSmith]

TOM4CWB,

Here’s the part of the amended version of the CWB Act which deals with barley

PART V

OTHER GRAINS

Application of Parts III and IV

Extension of Parts III and IV to barley

47. (1) The Governor in Council may, by regulation, on the recommendation of the Minister, extend the application of Part III or of Part IV or of both Parts III and IV to barley.

Modifications

(2) Where the Governor in Council has extended the application of any Part under subsection (1), the provisions of that Part shall be deemed to be re-enacted in this Part, subject to the following:

(a) the word “barley” shall be substituted for the word “wheat”

(b) the expression “barley products” shall be substituted for the expression “wheat products”; and

(c) subsection 40(2) is not applicable.

When extension to come into force

(3) An extension of the application of Part III shall come into force only at the beginning of a crop year.

Definition

(4) For the purpose of this section, “product”, in relation to barley, means any substance produced by processing or manufacturing barley, alone or together with any other material or substance, designated by the Governor in Council by regulation as a product of barley for the purpose of this Part.

HERE’S THE GOOD PART, READ IT VERY CAREFULLY

Restriction

(5) The Minister shall not make a recommendation referred to in subsection (1) unless

(a) The Minister has consulted with the board about the extension; and

(b) the producers of barley have voted in favour of the extension, the voting process having been determined by the Minister


THIS PART TALKS ABOUT EXTENSION AND IS PART OF THE 1998 AMENDMENTS (BILL C-4)

NOW I DON’T KNOW ABOUT YOU GUYS BUT I DON’T REMEMBER VOTING ON EXTENDING BARLEY TO CWB JURISDICTION?

THEY TOOK BARLEY OUT IN 1998 AND DIDN’T REALIZE IT BEFORE IT WAS TOO LATE. SO THIS PART OF THE CWB ACT HAS NEVER COME INTO FORCE. WE’RE STILL OPERATING UNDER THE SAME RULES THAT ALLOWED CHARLIE MAYER TO PULL OATS OUT.

DO YOU THINK GOODALE WILL BE LIKE CHARLIE AND JUST TAKE IT AWAY FROM THEM?

IF GOODALE OR THE CWB SAY WE NEED A VOTE FOR BARLEY THEY’RE BEING DISHONEST,

[TOM4CWB]

AdamSmith,

If I recall, didn't we have a vote in 1997?

I know this section of the CWB Act has been looked at and interpreted many different ways, maybe a letter to Minister Goodale by one of the Barley growers groups might clarify exactly what he wants from us?

[chaffmeister]

To answer charliep's question: What happens if as a part of international agreements Canada decides to write some of this debt off?

To add to Tom's answer, it's my guess that the CWB would need to operate without the cushion of the $75 million in interest revenue. A few things come to mind:

1. The CWB wouldn't be able to play games in the barley pool anymore.
2. Wouldn't be able to play games in any of the other pools. (Hey, there's nothing saying that they haven't - if they're going to monkey around with one, who's to say they haven't monkeyed around with the others.)
3. Without the interest revenue, the CWB no longer would be able to do anything in the feed barley market. Period.
4. The CWB can't brag about earning more interest than the admin costs of the CWB anymore.


Here's another though about this year's 56,000 tonnes of feed barley sales. I don't have the greatest recall but it seems to me that the CWB was quite proud of a new LTA with Japan - which included barley. Could it be that this 56,000 tonnes went to Japan, a noted "premium" buyer of Canadian grains?

[TOM4CWB]

Chaffmeister,

This is why I asked the question about the buy back volume to the USA.

I checked many times during the past year, and most of the time the buy-back was 155-160/t. If the pool pays 180, then significant money would have drained out as subsidies on sales of barley to the US through the buy-back process...

I know the Organic people were VERY happy with doing buy-backs on barley this year...

[cowman]

Corn is coming in big time even as far north as Red Deer Alberta(probably even further north...). Now what happens when these feeders realize corn works better than barley? Cheap subsidized corn! Several years back I got a load of someones bull ration from my local feed company,by mistake. It was one third corn. I have never seen steers do so well! Will our feeders find that corn really works for them and cut barley out of their rations?
Last year when the corn came in some did not feed it. Western feedlots stayed with barley and paid about the highest price around. Why? Because their major end customer(a large restaurant chain in California) told them they wanted barley fed beef and if they fed corn they would just buy American beef.
When they scrapped the Crow, barley really became non-viable for the international(overseas) trade. It makes little sense to spend half of what barley is worth just to get it to port(which was how it was when prices were lower).That and European export subsidies. Why do you think we had such a massive buildup in the cattle numbers? I would suggest we needed a local market to consume the barley? Also barley producers bailed out and went for cows instead.
When I was a kid barley was basically THE crop north of Red Deer Alberta. Quite frankly our climate and soil favor barley production more than anything else. I would suspect about half our barley acres go into the silage pit in a good year! The end of the CROW changed our whole agricultural picture and has a lot to do with the mess we are in today.