Why our wheat production has little relation to prices

[rockpile]

With all of the talk about the impending production crisis here in W.C. due to the weather, I became curious as to where we really stand in the 'big picture'. The production numbers are in millions of metric tons and the data is from 2012 though you can go back further. What I found interesting are some of the long term trend lines and how weather can really make or break you wherever in the world you raise wheat. The source is the FAO.

E.U. 134.5
China 125.6
India 94.9
USA 61.8
France 40.3
Russia 37.7
Australia 29.9
Canada 27.0
Pakistan 23.5
Germany 22.4
Turkey 20.1
etc.

Draw your own conclusions, but if I was a global grain trader at this time, I wouldn't lose sleep over what's happening in NA, at least not yet. And remember, grain is being grown somewhere every day of the year. (P.S. Oh wow, we beat out Pakistan!!!) So I don't see prices going anywhere anytime soon.

[bucket]

Some of those are domestic use only. And still import.

[Oliver88]

Ukraine isn't on the list????

[rockpile]

Ukraine had a short crop in 2012 but over the longer term they are trending up. Bucket, so what???

[SASKFARMER3]

Yes I agree we mean shit all on world stage. Ah but the coast price was 10 all winter and yet inland price was 5 who made the 5 profit the answer is simple.

[wilagro]

Perhaps we need a MARKETING AGENCY to sell our wheat for us. Seems to me we used to have one but some shortsighted politicians essentially eliminated it.

[sumdumguy]

Will, the CWB had many chances to evolve, become transparent, become accountable. The concept was workable but stubborn pompous politics killed it!. IMO

[TOM4CWB]

Hey Rocky

If you do not like wheat prices you can:
1. STOP growing it,
2. Grow organic... Booming markets,
3. Export to the US,
4. Sell to the Cwb,
5. Make your own grainco and get rich!

Just a thought!

Glad your imagination station didn't shock our expectations of your motivations... You are consistent you and Chuck/Wilagro et,el!

Cheers!

[sumdumguy]

Tom, you forgot making booze out of it. We gotta get creative. Who knows we may be able to ferment it in the field and pipe it in.

[bucket]

Hey TOM a response to your solutions

1. The quick excuse from those that are 500 miles closer to port.
2. Why ruin the organic market for those doing well in it. That is like charliep reccommending going into cattle but not realizing fences don't just magically appear.
3. Ritz and others here used a word called arbitrage a lot. Hasn't stuck around and prices are now doing the same as when the cwb was here. Why does the world pay for American grain but not Canadian prairie grain.
4. The cwb hasn't evolved to sell to them - they want to be a coop.
5. Just read a thread about newco issues

I am beginning to realize that the push for an open market was from those that didn't think about the other side of open markets. Like transparent reporting to keep all players accountable. The nobrainer part of the process was left out. The incompetence continues.

[sumdumguy]

Forcast is for warm weather and sunshine starting Thursday. A few weeks of dry heat ans we may be surprised like last year. The trees are enjoying this weather and there were lots of mice this year..... So my point 1 - give er schnoose Bruce

[hobbyfrmr]

Tom and sumdum ,

Those are good ideas. I stopped growing wheat about 12 years ago because it didn't cash flow in my little, inefficient farm. I still recall a local social function where the discussion was about seeding. I said I had not planted wheat that spring. The neighbour looked at me horrified! "you have to grow wheat" he said. I look back on that conversation every year......you have to grow wheat......it's just the way some people think....I do grow wheat on occasion if the feed contract prices reflect strong profits.

[rockpile]

Tom! You're stuck in the past. Get over it! It's a new environment and everyone has to learn to deal with it. How you somehow twisted my post into a debate from the past is beyond me. Read SF3's reply - he got it. One other thing if you read through the data. All the stan's that formed after the breakup of the USSR have had phenomenal production increases in a very short time. So maybe the whole global dynamics will be shifting in the future.

[TOM4CWB]

Sorry you did not like my answer:

"If you do not like wheat prices you can:
1. STOP growing it,
2. Grow organic... Booming markets,
3. Export to the US,
4. Sell to the Cwb,
5. Make your own grainco and get rich!"

I stick by it... all these solutions are being utilized to some extent now... I suppose you were not really looking for an answer.

The old wives tale that 'if you grow it... they will beat a path to your door' works about one year in 10... if we are lucky! 2012 was a year to remember... and the first half of 2013 was almost as good!

just saying... It seemed to me to be too good to be true long term!

Cheers!

[charliep]

rockpile

I would look more at the trade side. Won't dig up the numbers but the shift from five major exporters (Canada, US, Europe, Australia and Argentina) to include the former Soviet Union countries. Canada is about 12 to 15 percent of world trade. North America is under 40 percent.

We can be negative but I think we have to look for our competitive advantage. Quality. Ability to meet just in time buyers logistic requirements. The latter has taken a big hit over the last year - the supply chain needs to have a hard core look at what happened this winter. From the farmer side, the impact of our problems (not world market problems) is the ability to relate our local price with world prices.

Hope you have been on your motorbike this spring. Was out yesterday and even took the road monster on gravel. The bike club I belong to challenge this year is to cross every ferry in Alberta and yesterday, I checked the Klondike ferry off the list north of Barrhead.