CWB and Barley...

[TOM4CWB]

Thalpenny;

Your CWB web site news article says;

September 26
2001-02 Wheat and Durum Return Returns Rise

"September 12, 2002

2002-03 PRO values for designated barley rise

Winnipeg - The CWB today released a mid-month Pool Return Outlook (PRO) for the 2002-03 crop year increasing the designated barley forecast returns by $13 per tonne to reflect recent developments in global malting barley markets.

In addition, to assist farmers in their marketing decisions, the CWB has reviewed the prospects for the wheat pool account and is providing an advisory with regard to expected changes in the September 26 PRO. Farmers considering the Early Payment Option (EPO) for wheat are advised that milling wheat returns may rise as much as $15-$40 per tonne by the time the next PRO is released."



THIS IS OBVIOUSLY NOT 2001/02 Returns…


THEY ARE;

"Designated Barley

Weakness in the global barley markets through this spring and summer has been reflected in the 2001-02 pool returns for designated barley.
Recent strengthening in market prices will benefit the 2002-03 pool."

Since Std Sel Six-Row barley is now only worth $179/t… less than feed barley, what happened to CWB risk management?

I know you were buying barley through the summer, why when the drought obviously was recking our crops were you selling them at bargain basement prices… when you KNEW the barley crop was a disaster?

Do you call this extracting a premium Thalpenny?

It was extracting a premium FROM farmers in the “Designated Area” not for us.

Is the CWB’s Malt barley policy to guarantee that the lowest price is the law???

Why isn’t Malt Barley worth $5.50/bu, don’t we deserve this price Thalpenny???

[TOM4CWB]

Thalpenny and CWB;

Are you going to fix PRO Sept 2001/02 news mistake on your Web site???

[TOM4CWB]

Thanks for pointing out the error on the website.

Regarding buying des barley through the summer, you know that the sales commitments were made previously for the barley that was coming into the system through the summer. I don't think there was much new sales activity, if any, through the summer.

The malting barley prices were soft until a couple of weeks ago when it became clear that the Aussie was going to have quality and production problems.

Tom

[TOM4CWB]

Thalpenny;

This forward committment on sales has me puzzled...

Why if the CWB Pool is supposed to be averaging sales throughout the crop year, is the CWB not returning average sales for the year?

It seems like We are now in the sad position that the relatively speaking the lowest domestic feed price offered for the 2001/02 crop year was equal to or higher than the designated barley, which is not acceptable.

With proper CWB risk management, this should never happen.

What is the CWB going to do about this???

If farmers were able to cash price designated barley, there would be a surplus of barley, not a deficit and requirement for imports.

Why won't the CWB Cash purchase barley???

[TOM4CWB]

I don't get what you are trying to say. What risk management are you referring to?

The timing of sales, and the spread between the different quality of grain over the course of the year within the pool are reflected in the grade spreads. Note that the international values for malting barley where softer through the summer, and hence forecast returns for the whole des barley pool dropped.

Again, the domestic market for feed grains is the highest values for feed barley in the world. So when you compare the domestic feed values with int'l malting barley values over the course of last year, you'd find that the returns from domestic feed sales were often higher.

Tom

[TOM4CWB]

Thalpenny,

It is obvious that both you and the CWB sales dept. don't get it.

If the CWB would cash buy malt barley, the opportunity for value adding would determine the value of the barley.

The pool messes up the market signals about the true value of the designated barley especially in the North American market place.

Ken Beswick almost overcame the communists at the CWB, and now... you yourselves must dredge up ever bit of wisdom... you can find to overcome nearly certain failure of the CWB to remain viable.

If you cannot face the reality that a total marketing failure has occured, and has extracted money out of farmers capital base and existance, then I truly believe there is no hope for the CWB.

Denial of sructural problems will not fix the CWB, but it end ...
the monopoly...

Your choice is rather simple...

Lead the change with viable marketing options...

or...

[TOM4CWB]

Your comments sound frenetic again ... reference to communists and all.

Since when is an open cash position 'risk management'? Sounds like betting the bin. But you have revealed that you acknowledge there is no effective hedge mechansim for malting barley. So managing supply is likely the most effective risk management strategy. That includes pooling the returns from all markets.

Looking back at last year's values and comparing to current spot prices is a big stretch in your argument, tom4cwb.

Tom

[charliep]

Tom

There is an effective hedging tool for malt/feed barley - it is called selling for cash/putting the money in the bank. Any farmer who sells to the CWB is in fact a speculator - no one knows the final price until 15 months from now.

You have also highlighted that the CWB not the only seller to the domestic, US or world markets. The CWB is a monopsony in terms of western Canadian farmers - not a monopoly

This year, Canada will import 5 to 6 MMT US corn - 2 to 3 times normal. We will import major quantities of malt barley from the US. Malt barley is coming in from the EU. I think the Canadian millers are likely to buy significant quantities of US wheat. All this grain will enter Canada/be sold to the domestic value added industries outside the CWB procurement system.

Your point may be this product is being brought in on an import basis/benefits the farmer by higher prices. If you go there, be prepared to answer the question as to how current pricing is done to domestic millers and maltsters. Is it on a US price minus transportation cost? Are malt barley and milling wheat/durum priced on an import basis (US price plus transportation? What are the CWB policies on forward pricing/risk management (not what you did today/last week but in general)?

We need to rejuvenate the discussion around basis risk (CWB versus non board). In reviewing the PPO contracts offering over the past summer, it may prove to be interesting.

[TOM4CWB]

Thalpenny;

THe reference to Communism is the best and most logical way to explain why the CWB does what it does.

The CWB says we must all be equal and have an equal "chance" at accessing the market.

Yet we all know we are not equal, and will not have an equal access to the market, CWB freight subsidy adjustments are just one distortion that proves this point. Forcing me to pay rail freight through the POOL to Quebec all winter is another distortion. Economics have little to do with last years winter shipments.

Thalpenny, you can call me all the names you want, it proves that instead of logic, you are trying to intimidate me, and you should know by now, I don't intimidate easily!!!

But this rather proves my point, so keep up the good work!!!

When the new CEO is installed, wouldn't it be a good idea, for the districts and other farmers as well, that need marketing choice as one of the marketing tools in their tool box, to have a meeting with him, Thalpenny?

We could have a 2 day session, and the CEO could get it direct, why the peasants and slaves are restless!!!

[parsley]

tom4CWB,

Did you see in the Western Producer where the new CEO Announcement cannot be made by the farmer Directors until the Minister of the CWB gives his permission to them to make the announcement? So much for the Directors running the CWB.

parsley

[TOM4CWB]

Parsley;

I see Adrian Measner being tossed around as the CEO... very interesting.

I have my doubts, what have you heard?

I believe it is very unfair to the new board of directors comming in this fall to saddle them with the choice of the present directors...

And on top, the least that should have been done was to announce who the new CEO was before the election began.

Dirty politics... all the way through... figures

[parsley]

The good thing about Measner, if he is THE MAN, is that he is already one of the the Backroom Boys, so the Backroom Boys can heave a sigh of relief. Nobody has to power-train this guy the lingo that keeps the monopoly chugging along:

...... "Yup, this one gets a license"

......"Nope this one will never get a license."

......"Give this guy a break on the buyback."

......"Crank the buyback over the top for this guy."

......"Call Customs and tell them to accept bogus licenses from Ontario".

......"Call Customs and tell them NEVER NEVER ask for licensing paperwork from Quebec farmers"

......"Call the Minister for my orders this week"

......"I refuse to eat at the bus depot"

Wouldn't surprise me if Measner's CV is Board-magnetized.

The Directors will be told WHEN they can reveal who the new CEO is. After all, why should the farmers who pay his salary get to know when he starts, or who he is, or what his pay is or anything at all.

Just pay and shut up, tom4CWB

Parsley