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Malt barley pro $150/mt short
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Wedino
Which price is too low? The price maltsters are paying the CWB or the price signals being provided farmers?
My definition of a fair price is what a willing buyer and seller (each with equal information) are agree to. This price is known to the market and is one piece of information used in the next price negotiation.
Perhaps the biggest problem in the current malt barley situation is the maltsters are not allowed to compete in the market place for supplies.
A question that has been asked before but I bring it up again. What value does the CWB bring to barley marketing?
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An area that always causes me concern when I make comments about malt barley and the CWB is market development. This is a different issue from pricing and market access.
Perhaps these activities should be moved into the CGC (either Grain Research Lab or Canadian International Grains Institute). Maybe this should be the role of producer commissions (eg. Alberta barley commission). Maybe Pulse Canada is a model (industry approach). Maybe this should be the responsibility of grain companies, maltsters and brewers.
Thoughts?
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Charlie;
Really, this issue comes down to one point, CWB timing on sales.
The domestic designated barley processors are in as bad a problem as farmers are.
If I sell presold Canola at $350/t, and the price goes to $450/t, someone must make up the $100/t difference. I made the decision, therefore I am responsible for the $100/t.
When the CWB made the decision to sell, farmers were not notified... and feel absolutely no obligation to supply barley at $100/t, under the market.
This is because not one individual farmer in the "designated area" is responsible for the CWB Decision... except... the CWB farmer directors.
THE CWB pre selling grain, that is NOT in CWB control, Is NOT LEGAL under the CWB Act.
Section 32 gives the CWB Authority to market grain offered, and delivered according to the CWB Act's terms.
Nowhere in the CWB Act does it authorise the CWB to presell grain that has not been offered to the CWB.
I will be really surprised if the CWB does not get it's building sued right off its foundations from this blunder!
THe Alberta government itself could proceed with action against the CWB, when the CWB said as I pointed out earlier..." THE CWB HAS NOT SOLD THIS YEAR'S ENTIRE CROP AT LAST YEAR'S PRICES."
Unbelievable that the CWB prints this and sends it to practically every farmer in western Canada!
THE first thing one of my crop share Landlords said to be was...
"Tom, did you see the CWB letter that says that they sold almost all of this crop at last years prices?"
If the CWB sold most, half, or even one third of the 2002 harvest at spring 2002 prices, they will have quite a time convincing a judge what gave them the authority to do so...
Especially when the CWB monopoly is not based on the CWB Statute... just the "policy" of the CWB Directors!
It looks to me that since there are only 14 directors at the CWB, and Chatenay has good justification for not being responsible for this CWB policy, that the other 13 CWB Directors could cost the Canadian government billions!
Minister Goodale may be VERY sorry that he has not been the Minister RESPONSIBLE for the CWB!
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In my mind, the real question comes down to whether or not the CWB adds value to marketing malt barley. If the answer is no, then barley should be removed from the CWB jurisdiction. If the answer is yes (I'll be the first to quiz what the value is), then what changes need to be made to ensure the market is able to function properly by reward farmers for the extra effort/risk of growing malt and provide maltsters/exporters with adequate supplies at a competitive price relative to competitors.
The above would be my first question for the candidates in the current round of CWB director elections.
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Why don't the malsters just start offering cash prices to farmers and ignore the CWB?
As things stand, the current regulatory regime is going to put them out of business anyway. I have a hard time feeling sorry for the malsters on this one.
The malsters know what needs to happen for them to survive and the govt's blunder when writting the changes to the CWB Act gives them the out they need.
Only in Canada would people rather die than fight.
I've got about 19000 bushels of good malt barley sitting in my bins and I'll sell it tommorow if someone would give me a real bid. But I won't sell it into a quagmire of uncertaintyand low ball prices.
Here's my offer $5.25 fob farm SW MB
Any buyers out there????
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AdamSmith;
I believe the CWB sales for 2002-03 has really messed up the whole designated barley industry.
Why?
When the CWB sells 2002 crop, the Maltsters etc. normally do the CWB purchase, then back to back sell the products they produce into the various food and beverage markets.
Now when the CWB sold these processors selected barley at low prices in May/June, for fall/winter 2002 delivery, the processors to cover risk sold the products made from CWB low priced grain, to end consumers.
It is very unlikely that the processors CAN pay big premiums, because they very likely already sold their processed products at low prices.
There is simply no processor money left over, until the presold CWB selected barley is worked through the system.
THE question remains, what performance garanttee did the CWB have with these folks?
And with a Monopoly to deal with, how sucsessful would a processor be... even if that processor sued the CWB... they would be cutting their own throats by going after the CWB.
Something must be done about CWB sales, the CWB selling grain they cannot deliver, is not fair to farmers or processors!
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Tom, When I plan a budget for my farm I include all my known costs and add a bit in for the unknown or unforseen costs. Let's say I budget in $10/ acre and call it misc./unforseen costs. If I come in under budget great. But Let's say an unknown or unforseen event causes those cost to skyrocket to $25/ acre. Do you accept these costs and do what's needed to carry on the operation or do you stay within budget regardless of the circumstances?
Why should the malsters be any different?
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AdamSmith;
Maltsters Dealing with farmers is much like how farmers deal with the weather, in fact the two ARE related.
Sometimes patience pays off...
Sometimes an early move pays handsome dividends.
It really in the end depends on the weather!
Global weather!
I try not to pay more than I must, which is where the Maltster is today!
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