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CWB Confirms Farmers Will Lose Millions on Barley

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    CWB Confirms Farmers Will Lose Millions on Barley

    WCWGA release-

    <b>CWB Confirms Farmers Will Lose Millions on Barley</b>

    The release of barley price projections by the Canadian Wheat Board yesterday confirms the worst fears of the Western Canadian Wheat Growers Association - that prairie farmers stand to lose millions of dollars in revenue and profits on barley unless a free market is restored. On July 31, the Federal Court quashed the free market in barley that had been planned for August 1.

    "These Wheat Board price projections mean that I'm taking a $50,000 financial hit," says Stephen Vandervalk, Alberta Vice-President of the Wheat Growers. "These numbers are real, they're not based on some pie-in-the-sky economic study."

    Before the court ruling, prices at his local grain elevator were $4.00 per bushel for feed barley and $4.75 per bushel for malt barley. Vandervalk notes that the CWB is now projecting a final price of $3.29 per bushel for feed barley and $4.22 for malt barley at the same elevator. Even these projected prices overstate the true return of selling through the CWB. It takes up to 16 months for farmers to be fully paid under the CWB pooling system, and when storage, quality risk, price risk and cashflow considerations are factored in, the final realized CWB return is much less than these projected values.

    "Where’s the premiums that the CWB and its supporters keep boasting about?" says Vandervalk. "It’s garbage to suggest the CWB gets us higher returns."

    Vandervalk had pre-sold 70,000 bushels of feed barley at the higher prices before the court ruling and has 30,000 bushels of feed barley remaining together with 70,000 bushels of malt barley. If he hadn't pre-sold most of his feed barley, his losses would have exceeded $100,000.

    Vandervalk believes that barley prices being offered by the private trade would have gone even higher if the free market had become a reality on August 1. "Grain companies were offering good prices, but who knows how much more they would have climbed if the court ruling had gone in our favour. Instead of limit down, we likely would have seen limit up."

    The Wheat Growers are calling on the federal government to immediately fix the problem by harmonizing regulations across Canada with respect to the issuance of export licenses.

    "Quite frankly, we don't know what this government is waiting for," says Cherilyn Jolly-Nagel, President of the Wheat Growers. "How can they sit back and watch prairie farmers lose thousands of dollars and the prairie economy lose millions of dollars."

    The Wheat Growers are critical of the Saskatchewan and Manitoba governments for supporting the court challenge that is now costing farmers thousand of dollars, and challenge the stance of federal opposition parties on the issue.

    "Why do Eastern politicians think it's fine to oppress western farmers, when they aren't prepared to extend the CWB monopoly to farmers in Ontario, Quebec and Prince Edward Island?" asks Jolly-Nagel. "As far as I'm concerned Stéphane Dion and Wayne Easter have no credibility on this issue unless they stand up in the House of Commons and demand that the law of the land apply equally to all Canadian farmers. Western farmers shouldn't face discrimination when Eastern farmers are free to sell their grain to whomever they please."

    #2
    Bunch of subjective speculation , nothing but fear mongering, what the wheat growers do best. Similar to their assault on shipments of grain to the U.S. helping the Americans close the border. If Barley growers lose more it will be because corn prices drop or the unlawful actions of the Government.

    Comment


      #3
      I just saw a Jordanian tender purchase of feed barley on August 1 at US$340 per tonne. Even with huge ocean freight, that's way above anything the CWB is offering on the PRO. Oh, but I forgot, they can't sell anything because the "stupid" private trade plugged up the transportation system by selling too much barley.

      Give your head a shake. The CWB has no plans to sell any more barley. The PRO is a useless exercise and is completely meaningless because the CWB couldn't market feed barley if their life depended on it. Wait a minute, actually it does.

      Comment


        #4
        "Eastern farmers are free to sell their grain to whomever they please."

        Yup, that's fearmongering and speculation all right.

        Comment


          #5
          quebec wheat growers cant sell human wheat by themselve.we got our monopoly board too.

          Comment


            #6
            Yes but the majority of Quebec farmers voted in favour of it. So, more power to them since that's the way they seem to want to go.

            Comment


              #7
              Copied from another thread - in case you don't read them all. this is relevant here on this thread.


              posted Aug 16, 2007 11:10 Afraid I can't give details but seems to me the CWB is currently screwing up the barley trade. Bottom line is the concern over access to malt barley makes them impotent. They recognize what has happened in the past where the malt PRO isn't good enough to compete with the feed domestic market. So they miss out on good business.

              This is not ideological - it's simple commerce. If barley was "open", the trade would be executing on this business, managing the risk as they do, and offering excellent spreads to feed - regardless of the time of year and regardless of the domestic feed price. In fact, if the CWB operated differently - cash pricing with GOOD and REASONABLE contracting - the CWB itself could offer programs that would ensure they get the barley and so they could be more responsive to the market.

              Ritter said it won't be business as usual.

              Well, guess again. Looking at the Initials, the PRO's and the marketing stance with offshore buyers, nothin's changed.

              you've still got poor pricing and squandered opportunities.

              (Burbert and others - don't even begin to bore me with the "value proposition" of the CWB. From what I see, it's non-debatable.)

              Comment


                #8
                So the CWB says the barley market crashed on Aug 1 due to unrelated market factors. Meanwhile the export market is still in the stratosphere (see the purchase by Jordan). Let's see, which is more credible? The govt agency that says, "Trust me, you'll thank me later."? Or a posted sale price that proves farmers would do better without the CWB?

                Comment


                  #9
                  Canola futures down almost .50 . This is proof Canola farmers are going to lose money in the free market enviroment as there has been no basic supply demand change. Hedge funds are probably selling to cover losses in the stock market. You cannot use short term rallies or drops to prove anything other than markets go up and down depending on who is having a bad day. If barley had rallied after the court ruling would you have said it proves the CWB is right?

                  Comment


                    #10
                    The proof is that the PRO (and now the FPC) are nowhere near the US or world market values. It must be "backward day" at the CWB. So-called premiums are actually discounts. How long can you keep arguing that higher prices actually mean lower?

                    Comment


                      #11
                      Agstar - did you even read my last post?

                      I'm not talking about a little bump in the road here. I'm talking about the way the CWB wants to operate is completely and totally flawed. Even if the market had rallied after the CWB's court win (which anyone with any market savvy knows it wouldn't have) this CWB would not have been able to execute anyway (they're proving right now).


                      Add to the CWB's three D's of management (deny, deflect, and defend), the three I's of management (impotence, insolence, ideology)

                      Comment


                        #12
                        I hope Agstarr has to deliver his malt to cover the shortfall of the CWB. You know the CBW is just like the the bully on the playground he takes the ball but does not know what to do with it. The CWB wants every thing but does a poor job, Thinks he is so popular, but really is just a dumb ass.

                        Comment


                          #13
                          more power doesnt mean more money for our wheat,our leaders told us every good things we will get.before we get pay in 2 weeks.now we get final pay 14 months later

                          Comment


                            #14
                            Agastar, if Barley would've went limit up the day after the ruling, then yes mabye the market knows something about the Board that we don't. But it didin't go up, it went limit down 2 days straight based on the fact the Board was getting conrol again.

                            Are you telling me that you are that blind to lose a pile of money to the Board, by them now gaining control again?? And you chalk it up to that it was just 2 bad days in the market??

                            Wow you supporters are blind!!

                            Comment


                              #15
                              And lets not forget the cash price either. Analysts everywhere said it was -historic- they had never seen that large a drop in cash before, ever.

                              Comment

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