CWB, Unbelievable!

[TOM4CWB]

Thalpenny,

An elevator ships #2CWRS, legitimately believing, from all reference CGC samples it is a #2.

The shipment is graded in Rupert, low and behold they grade it as a poor #1CWRS!

No Problem right, wrong.

The elevator gets fined $500/car.

And the difference can't be returned to farmers, cause the fine almost ate up all the difference between the #1 and #2!

And if the elevator had shipped it as a #1, you can bet that they would have paid the fine for mishipping a #1!

Then there is the PPO feed wheat situation.

I talked to the CWB PPO pricing people, and I was told that Mr. Gary Piclik said that the discount on feed wheat, at the time of delivery, is subtracted from the PPO top up payment.

Now lets go through the numbers;

End of July PPO price #1CWRS 13.5Px is $230/t basis Port.

CWB October 11, 2002 Initial price, #1CWRS 13.5Px $187.20/t

Top Up; $42.80/t

Basis to be added; $2.30/t

Total top up payment, $45.10/t



Initial price today at Port, $107.50

Deduct; $47.00/t freight, handling, cleaning, inspection charges.

Leaves $60.00/t initial payment when I deliver today.


NOW, on my top up payment you owe me $45.10/t,

But $58.42/t discount is subtracted $45.10/t feed wheat top up Payment.

Now this means I owe the CWB $13.32/t

With the initial price of $60/t minus the feed wheat discount, I would be paid the amazing amount of $46.68/t, or $1.27/bu TOTAL PAYMENT for my 61lb/bu CWRS wheat.

This system leaves me speachless!!!

[StrawBoss]

tom4cwb - are you suggesting that if a grain company makes a gain on a shipment that they will pass it back to the farmers?? Come on.

If a specific product is ordered at port, (perhaps througna successful tender bid)that's what is to be shipped. The penalties are specific. Who do you think should pay for any extra storage costs or replacement costs as a result of the misshipment? This is a commercial mechanism to ensure efficiency. And the commercial penalties seem to be more effective in guiding companies in their shipping accuracy. This is part of the risk in getting into the grain handling business. As you know, sampling for grading purposes can be a critical factor. Perhaps the grain co didn't do good sampling and the lots weren't representative of what was shipped.

Regarding the feed wheat scenario, obviously these PPO programs are not intended for feed wheat. Any class of wheat grading as feed can be delivered, not just your good test weight CWRS. There is a widening spread between feed values and good quality milling wheat, and that is a risk that cannot be hedged effectively. Perhaps your product should be a #4CWRS??

Tom

Tom

[TOM4CWB]

Thalpenny;

Your lack of faith in the honesty of your agents is very sad.

It is obvious that there is a real problem with our grading system, and after the CWB steals the difference, it is for sure the grain handler can't refund the difference, cause the CWB took the money.

Thalpenny;

How can I do a PPO without huge risk, when you require me to do it by August 1?

Obviously I won't know what grade I have to sell till I combine the wheat sometimes 3 months after the August 1st date.

Explain to me why when my 61lb feed wheat is worth $5.00 in Edmonton, why you are only going to pay me, in the case presented, $1.27/bu.

What exactly is the CWB going to do with my wheat, that it looses $3.73/bu n value?

How exactly do you call this the single desk monopoly "extracting a premium" for anyone?

Who gets the $3.73/bu that I am being asked to give up Thalpenny?

[TOM4CWB]

Thalpenny;

Who should pay for the misshipment to the port?

Thalpenny, admit it, there is in fact no difference between a poor #1 and a good #2. This is strictly a judgement call. A judgement call that should never have had to be made to begin with.

If your grading/marketing system depended on real intrinsic wheat properties, like;

% DHV Kernels,

% stained Kernels

% Shrunken and broken kernels,

%nfrost damaged kernels,

Falling number;

Then this #2 would have been a number 1 wheat, in the beginning, just like it should have been, like it would have been in the US grading system.

A graduated system of discounts taking the % of each discounting factor on all but the minimum falling number, is perfectly acceptable to the customers who buy our wheat!

Yet the CWB and CGC maintain a system that rips off both "designated area" wheat producers and grain handlers... and a system that creates expensive extra seperations and storage costs that farmers must pay for in the final result, lower returns because of higher costs!

It is obvious Eastern Canada grades things different, cause the CWB doesn't have a monopoly there!

This is a zero sum game Thalpenny, and farmers are the people who pay the bill.

Honestly, can't we do better, both on the grading issue and on the PPO systems?

Talk about hypocrasy, when a boat this summer in Vancouver BC was loaded with US wheat, milling quality wheat, which would have graded Canada feed, worth $1.27/bu total value...you tell me...

Any wonder why... I simply don't believe you.... and am of the opinion that you not working to maximise my returns...

And that the "single desk monopoly" is hurting my farm, and every other farm in the "designated area" Thalpenny?

[parsley]

tom4CWB,you say;

"Explain to me why when my 61lb feed wheat is worth $5.00 in Edmonton, why you are only going to pay me, in the case presented, $1.27/bu."

Because you're tom4CWB, $1.27 seems more than a fair price!!!!!

Parsley

[TOM4CWB]

PARSLY...#*^#_ !...;

THAT WAS NOT VERY NICE...!...

But I guess I deserved it anyway, according to the latest Agriweek MISCELLANY;

"Only 50 prairie wheatgrowers signed only 67 contracts for only 11,500 tonnes of wheat under the Wheat Board's basis contract program, touted as a marketing innovation allowing producers some of the benefits of future price increases. In the previous crop year 380 farmers participated, signing up 91,000 tonnes. Wheat Board directors are said to be pleased at the poor response because it reinforces claims that farmers really prefer the 60-year-old system of price pooling. In fact, terms in the Board's alternate marketing offerings are so unattractive that it is a wonder anyone signs up."

Kind of proves Morris W. Dorosh's point, doesn't it?

[TOM4CWB]

On the grading issue, I recall previous arguments calling for 100% tendering at the spout, commercial contracts, etc etc. So now there is a commercial mechanism in place, one that has financial consequences, and now somehow the CWB is to blame for seeking the costs of additional storage and relpacement associated with a misshipment. I don't think there should be any apologies for that.

Tom

[TOM4CWB]

Thalpenny;

It is obvious that the contrived systems that have been created for tendering and PPO's, result in huge stresses. Contrived because the CWB single desk monopoly prevents a commercial competitive system from developing.

To adjust to this artificial contrived system, we now require adjustments on the grading and marketing system side, creating a system that is even more distorted.

We certainly....
.... have much more work to do
...to "maximise" the returns of those people in this system that do the majority of the work, therefore are entitled to the majority of the profits.

The people like you Thalpenny, who defend your CWB system, without question, are lulled into compacency because of a lack commercial accountability.

The CWB IS NOT accountable, because there is no competition, to force you to change!

Why else would you defend offering a price of $1.27/bu for a product that is actually worth $5/bu?

[TOM4CWB]

Thalpenny;

I see the CWB has lowered the CWRS feed wheat discount to $39.00/t frm $58/t, how exactly do you come up with these discount numbers? DO these charges not apply to CWRS #4?

Further the EPO risk charge dropped from $11.25/t to $9.00/t on CWRS yesterday, how did the CWB figure out how much to lower this charge?