Strahl to Resign?

[Lifer]

What did farmers receive? What were the world barley prices? How did the CWB perform relative to world barley prices?

In a chart format would be great. They probably have that in their full report.

With the power to not undersell and branding the CWB says it does even with disciplined average selling the result CWB should show well.

[Lifer]

Tower seems to me that there needs to be a shift in the CWB's attitude towards value added.

The customer is not an enemy. This is not a war. The customer is also not your friend. Commerce is neutral.

[kamichel]

Tower if you compare to R-Calf they are trying to keep beef etc. from being imported from canada and other countries.
That is a little different than hurting farmers in southern Sask. that could have a market access but are shut out.
Because of a Domestic Law. I know that I am not in southern Sask. and usually too far away to access the better market opportunity that arises from there.
But I do know that if them farmers can access that market there then that is better for us northern farmers because of the extra sales and disappearance.
What about the container business that had been made that is now squashed. Plenty of higher value opportunity lost.
Canadian branding could be worth a lot more if the CWB did not have the monopoly.

[chaffmeister]

Tower – since you are looking at the U of S study, I should let you know of some problems with it:

1. It’s been shown that their methodology to show price discrimination by the CWB is flawed – the same approach on canola would give the same results. Their conclusion of value brought by the CWB is unfounded and cannot be defended using this approach.

2. Although some CWB directors have said that this study has been “peer reviewed”, it has not.

3. The data used is private (from the CWB) and therefore cannot be verified. Unlike other studies such as the Sparks study which used only publicly verifiable data, even from the CWB.

To anyone who wants to understand this market and the CWB single desk debate, don’t waste your time reading this study.

Cheap domestic feed barley is clearly a CWB issue. When your export system is as dysfunctional as the CWB system is for barley, you domestic markets don’t arbitrage with export markets. History has shown that this results in lower exports than otherwise possible and larger amounts to either clear (consume) domestically or carry over – both of which lead to price pressure.
This is not due to a CWB attitude – it’s a simple function of the single desk system. (I guess you could say the attitude to keep the single desk is the problem.) I don’t believe putting cattlemen on the CWB board would help. If the CWB is currently set up in a way that gives cattlemen lower prices and more grain to access, why would they push for anything different?

I’ll add to this and say low non-CWB (canola) prices is also a CWB issue. The CWB system does not allow farmers to sell as much wheat as they want or need for cash flow. They are then forced to sell canola and other non-CWB crops to pay their bills in the fall. Farmers sell half the canola crop by Christmas each year. This overwhelms the system driving the price lower in search of buying interest. If the CWB system allowed wheat to be used as a cash crop, canola prices would not get driven as low.
This is not driven by my “beliefs” – it’s just rational thought and analysis.

[tower]

Here is a look at a variety of information available on the topic, Unfortunately it doesn't all back the board 100% so of course that which doesn't is unreliable.

http://www.kis.usask.ca/CWBLiterature.html

Good point about the cattlemen on the board chaffmeister, I think you are right on this one. Lifer I agree that we shouldn't be looking for enemies under these circumstances, on the other hand the competition, the feeders, aren't the ones I would choose to represent me.

It does seem that with the level of vitriol on this forum though there is a lot of people who think the wheat board is the enemy. That's got to be counterproductive to achieving a resolution to the problem.

The problem is low grain prices. We have low grain prices because grain companies get better margins when grain prices are low. The wheat board is a better option than grain companies whose objective is to keep prices to farmers low.

[chaffmeister]

<i>Unfortunately it doesn't all back the board 100% so of course that which doesn't is unreliable. </i>

You’re kidding, right? If someone with facts and sound analysis doesn’t support the CWB, they must be wrong?! Did you notice that almost all those neat little studies that support the CWB are by the same authors? And paid for by the CWB? These guys have seriously eroded their objectivity and credibility within their own community.

If Enron came out with a study on itself saying how great a job it was doing, that would be reliable? Oh yeah, it did exactly that and said it was doing a great job. Right up until it totally collapsed. How reliable was that one?
Where are your facts that support the CWB? Facts. Not estimates based on esoteric economic models that few can understand.

What would you need to see to change your mind? (Not that this is my objective, it’s just that I’m astounded that you would take such a firm position such as anything that doesn’t support the CWB must be unreliable and yet suggest you are looking to solve things. You can’t solve a thing with your mind closed.)

You say “We have low grain prices because grain companies get better margins when grain prices are low. The wheat board is a better option than grain companies whose objective is to keep prices to farmers low.”

I wish people would pay attention. Processors enjoy low prices. Grain companies (elevator companies) actually make more money when prices are higher (there is more room to negotiate and farmers are more likely to be "soft" negotiators when they're doing well). Also, although you think the grain companies are the enemy, you need to know that they all prefer to deal with successful farmers.

The real problem is there are people out there with blinders on like you tower, not unable to, but unwilling to listen to productive commentary. Reading your first few posts I really thought you were open minded – you are now proving that assessment as quite wrong.

I once talked to a very successful business man about his secret to success. His answer was pretty simple:

“I want all my customers to make more money buying from me than from anyone else.
I want all my suppliers to make more money selling to me than to anyone else.
I want all my employees to make more money working for me than with anyone else.”

It’s called an “abundance mentality”. Would it surprise you if I told you he ran a grain company? I can assure you he never worked at the CWB.

[silverback]

Don't you think it is possible that the employees and directors of the cwb just want to keep their jobs and will do, and say, pretty much anything to keep things the way they are tower?

Answer this if you are so open minded. What consequence do cwb employees face if they fail to garner premium prices for prairie farmers grain? Their job is to make a profit for farmers, what if they don't? Tell me if any of them have ever been fired or disciplined for not doing a good job of making profit for farmers?

What happens to employees of any other company on this planet if they do a poor job for their employer?

Just because the cwb is telling you they return all revenues - minus administrative charges - to farmers, does that actually mean they are paying farmers a better price than if they weren't in the middle taking out their "administrative charges"??

[Lifer]

Good points silverback.

I did want to comment on one point

"Their job is to make a profit for farmers"

I would argue that at this time it is not the job of CWB employees to make a profit for farmers.

Farm profitability is not directly mentioned in the Vision Mission and Goals of the CWB.

Just because as the wheat board says they extract the highest possible returns for farmers by effectively leveraging the powers of the single-desk doesn't complete the profit equation. Gross revenue - expense = Profit.

In the current structure the wheat board employees do not understand input costs. Therefore they have little idea as to what a good price is relative to profitability.

I understand my costs and would like to have the opportunity to choose the best price for me to be able to plan for my own profit.

[tower]

silverback, I think it is possible that any employee will do as you suggest, ie try to keep their jobs. For example the company that buys our grain process it and market the results, breed our seed, produce the chemicals and the fuel we use, and make big money doing those things, has employees who are hired specifically to tell us what good corporate citizens they are and how much they value us as milk cows.

I would hope that the consequences of doing a bad job for us while working for the board would be met in much the same way that a person working elsewhere and who is doing a poor job for their employer. Ie that the board of directors, who in this case we elect, would discipline him/her accordingly. As to how many have been under any kind of discipline we should be asking that of the board or at least someone who has some idea of the inner workings of the board.

What I'm saying is that the board is in position to pay us a better price, even with their administration costs, than we would recieve in the long haul if we were left to the tender mercies of the grain companies whose primary purpose in existence is to maximize their profits and the returns to their shareholders and the farmers be damned.

[tower]

Lifer, it is in the mandate or the objectives of the board to maximize returns to farmers. So when the board does extract the highest possible returns for farmers they are meeting their criteria. Our costs are something else indeed.

I would say though that I would expect that at least those members of the board who are grain producers have a better understanding and appreciation of our costs and how they impact our bottom line than persons who do similar work on behalf of the multinational grain companies.

Rather than expecting better from those grain companies in the future I think it would be better to do what we can about cutting our costs even at the expense of the worlds grain surplus. such as it is.

[silverback]

Tender mercies?

So the big bad grain companies just want to milk us dry and blow us off the farms, is that what you think?

Don't you think it is more advantageous to them to have us stay in business producing product for them to market elsewhere? If we all disappear, do you really think they are wanting to step in and start seeding/harvesting themselves? If there is no grain produced do you think they will just close their doors and find something different to do?

If a dairy farmer wants to stay in business, what do you think is a better way to do things, feed the cow as much high quality feed as they can so it produces as much as possible and then rebreeds right away for the next calf, or, give it just enough to survive to the next milking and then ship her to the auction at the end of the lactation???

The cwb has been only interested in getting rid of our product as easily as possible and whether or not they can get the highest quality bid doesn't really matter. The result has been decades of slow bleeding of our farms into extinction.

[Fransisco]

So it's all about low grain price's and how the board is in a better 'position' to 'maximize' returns to farmers. Hmmm...

Lets take a look at how that's working.

As of today's close the price of winter wheat at Bottineau Farmers Elevator is <b>$5.77</b> per bushel Canadian. The CWB's fixed price contract back to me in Manitoba comes to <b>$4.63, the PRO of course is worse yet.

For milling quality spring wheat it's <b>$6.13</b> Canadian from the same doesn't give a damn about farmers grain company located in the Great Satan of the United States. The ever humble and benevolent CWB fixed price is <b>$5.35</b>.

Way to maximize those returns and get us the best price boys and girls! I can just feel the love emanating from my bank account.

The 'position' the board is in when it comes to farmers is the same one that lead to all of those prison stories about not dropping the soap in the shower.