Call this Meeting to Order

[wedino]

Charlie, You say, quote"My assumption is the CWB sales program will be based on return to pool calculations with lower paying customers getting dropped (I understand the process)."

If this statement is true why such a low malt barley PRO?

[charliep]

see my comments under the August PRO thread.

[TOM4CWB]

Thalpenny,

You wrote;

"So you want to be a market maker? Explain to me how 90,000 indivdual marketers will achieve an overall better result."

Part of the real world is that commercial farmers DO have the self dicipline to sell when the price is profitable, except when selling CWB grains, because in that case we are true price takers.

THalpenny, if you looked back 2 years ago on marketing Canola, guess what, $6.00/bu Canola.

Now we are pushing $10.00/bu Canola, without a single desk, 90,000 of us all working together!!!

Infact, since some EU and Ausie producers and marketers use our Winnipeg futures, the true effective number is much greater than 90,000.

Take a look at Cannary seed, why isn't the price still at $.12, but instead, a miracle, it is pushing $.40/lb.

The free market is hard to understand for you Tom, but it is rather obvious that it does work, or feed barley wouldn't be worth more than Malt Barley.

The Barley situation says it all Thalenny, Barley growers do what you consider the impossible, in the feed market.

And the CWB does what you fail to admit, they get suckered into selling too cheap into the Malt Market, as a true price taker has a tendancy to do, especially when they (the CWB)have no true responsibility for what they are doing.

Single Desk selling has huge risk for commercial farmers.

How often do CWB sales people talk to enduser buyers?

Dozens of times each working day.

How often do CWB sales people listen to the farmer who's grain the CWB is selling?

We were supposed to talk to your sales guys on August 14, but, obviously talking to grain producers who were concerned about CWB performance and accountability to us was very low on CWB Radar screens...

Thalpenny, the school of hard knocks is a better teacher than CWB promotion ads and CWB spin doctors...

Parsley, we need to pass the motion, and I guess the vote will be taken during the CWB director elections...

[parsley]

On Thursday morning, one Saskatchewan farmer sent two loads of barley to the USA, with the US buyer paying for the freight and the cleaning. The farmer asked for and got $11.50/bushel,(bushel weight of 55 lbs), marketing on his own. The CWB provided him with a no-cost, no-buyback CWB export license. If the CWB had sold the load it would have been graded as feed.

Seems to mean that kind of farmer- marketing helps the farmers' bottom line, marketing, so that throws out halpenny's theory that the world will come tumbling down if the CWB doesn't market all wheat and barley.

Contrary to what they tell farmers, it also illustrates that the CWB actually can and do issue export licenses without having to change the legislation.

Parsley

[chaffmeister]

The discussion about the CWB vs the open market usually boils down to a discussion of the effectiveness of one seller (CWB) vs the effectiveness of multiple sellers (90,000 individual farmers). The CWB argument is "Explain to me how 90,000 individual marketers will achieve an overall better result" (than the CWB).

But we really don't know how good or bad the CWB results are, do we? There is no benchmark to compare to, except Richard Gray's, which in my view is substantially flawed. Look at the barley market. Last year, it appears the CWB sold feed barley for about $135 per tonne instore Vancouver (equal to less than $100 in the prairies). The LOWEST domestic feed barley price in Alberta was around $140. Do the math: 90,000 individual farmers, 1; CWB, 0.

The other argument from the CWB is "...will you simply take the cash price that a handful of merchants present for you at Vancouver and think you have done something to make a market."

The position that the "handful of merchants" are not to be trusted to pass on proper market signals and provide good prices is a well-worn argument of the CWB. The only reason that the CWB will try to tell farmers this is because these merchants are the competition - the marketing option that would be the other side of "dual" in a dual market. It's in the CWB's OWN (repeat and emphasize, OWN) interest to defame this group.

The true fact of the matter is that
(1) this "handful" of merchants are aggressively competitive to the point where margins (we all need 'em) are razor thin with not much room to take advantage of the isolated "individual" farmer, and
(2) the amount and quality of information about markets, end-users, supplies, demand, quality, arbitrage, rates, prices, etc. is available for next-to-nothing (sometimes nothing) to any farmer with a computer and internet access.

The other CWB questions are:
"Will you be able to extract premiums through long term supply agreements? How will you coordinate 1.5 million tonnes of a certain grade range to capture that? Will you keep track of the covered/uncovered positions of all the buyers in the world to know what there level of need is and to differentiate between buyers?"

Why does the CWB assume that in its absence, farmers would need to perform these tasks at all? If I didn't know better, I would say that the CWB was simply trying to scare farmers.

In the absence of the CWB, the grain trade would perform those tasks, not necessarily farmers. They do it already - long term supply agreements on canola to specific buyers in Japan, coordinating an ever increasing amount of grain in special programs, IP programs, etc. (The grain trade does more coordinating of grain flows than the CWB gives them credit for.) And as I mentioned above, there is more market information available to anyone than ever before.

The CWB argument ususally relies on the word "overall" as in "overall better result". Meaning although some farmers hit the upper part of the market, most sell below the average.

I would like to see the CWB sales performance measured the same way. The CWB is quite reluctant to show how they perform in terms of timing of sales. Rather it prefers to say how much a premium it got over US grain on the same day (which can never be proven). Is the average CWB sale in the upper portion on the annual price range? Or is it just average - or even below average?

The CWB system has proven that some farmers get a better result than they would otherwise because of pooling, while others have gotten a worse result (this is the reality of averaging, or pooling). Is this the definition of "better overall results"?

Open market crops have kept many farmers afloat for years. There's a reason why open market crop area is trending higher at the expense of wheat. Those 90,000 "individual" farmers made individual decisions to go where the money is, even at some risk while markets for the new crop is being developed - canola, peas, lentils are all "major" crops now due to the vision and efforts of 90,000 individual farmers.

Perhaps some day the CWB will see why telling farmers that it does a better job than they can individually, falls on many deaf ears.