Western Producer Editorial

[craig]

This weeks WP editorial was an attempt to cast some doubt into what impact the barley court case had on barley prices. I would hope producers are not prepared to buy their argument. While we can argue about futures fluctuations all we want, the cash price we receive for our grain is for all to see. No mention is made about the fact that when the private trade is now selling our barley, there is no longer a comfort level by domestic users of the supplies that will be available to them. The CWB at best is a residual seller of export feed barley. The board is impacted by shipping programs, malt feed barley spreads and pool returns. While it may be argued that there are merits to a more stable price structure for feed barley,it is hard to argue that the board has ever made an attempt to maximize returns to feed barley producers. The CWB made the mistake of fighting over export feed barley and the results in the market place have damaged their reputation. The editorial staff of the Western Producer may also be making a mistake in trying to defend the CWB. Producers know and understand what the court decision had on their own pocket books. Would you like $4.00 for off combine deleivery or $3 something with you waiting for your money sometime in the future.

[BennyHin]

Thank you Craig for explaining why a dual market can not exist and that the CWB cannot command a premium when others are willing to sell below their asking price in the same market.

[Fransisco]

Nice try at a quick 180 there benny. But that is not what Craig was saying.

[tower]

craig, I mentioned the impact on domestic feeders a couple of times in earlier posts. It may be argued that there are benefits to a pile of cheap grain for our cows and pigs and chickens, it might also be argued that our domestic users should try to use the market place to get returns which will cover the cost of having their domestic suppliers supply them.

As a grain grower I understand that my neighbours with livestock aren't getting good enough returns. I also understand that it isn't the grain growers responsibility. If society wants meat in the market let them pay for it, and not just all the processing and packageing and advertising in between.

Grain markets dropped on announcement that the conservatives tried to make an end run around the law, and were stopped. I expect prices might also be where they are today for other reasons. Market jitters being what they are, the idea that the board would be buying at a lower price, because of items like pool returns, was probably a great comfort to feeders and their brokers.

The old term "loss leader" describes a pricing setup that encourages customers to go into a store and buy a cheap product in the sure confidence that the customer will buy a bunch of other stuff whose price will more than cover the loss from the leader.

A gains leader then is where American multinationals have a pricing setup which encourages Canadian suppliers to buy into their system in the sure confidence that once the board is gone, those same grain companies will have another captive market willing to sell at low enough prices to cover their gains leaders.

[FarmRanger]

“Grain markets dropped on announcement that the conservatives tried to make an end run around the law, and were stopped “
---Or, without the doublespeak translation – grain markets dropped when the CWB regained monopoly buying power of barley.

“those same grain companies will have another captive market willing to sell at low enough prices to cover their gains leaders”
--- Do you mean like in the U.S., where they get more for wheat and barley than we do?

We seeded too much barley this year, but at least feedlot alley is still there to buy it, albeit at a lower price than what it would have been if the “end run” had succeeded.

[silverback]

Are you trying to say that US grain companies are just paying their farmers much higher prices right now so they can get a hold of all that "canadian" grain in some possible future date?

Pretty interesting logic. Got some specifics of that allegation? Any other industries doing that right now that you can give us examples of? How much do you suppose the "gain leader" is on a bushel of North Dakota HRS? How many years have these companies been doing this for their farmers? How long do you think they can continue to pay these premium payments on grain until they can get their hands on designated area grain?

[craig]

To Benny
If the CWB cannot operate in a dual market why does it continue to operate in a dual market environment in feed barley. Note the question asked in plebiscites asks if we want to maintain the status quo (dual Domestic market)and CWB export or allow open market. Your side should be asking for the CWB to handle all feed barley. Your side doesn't because if it was open market or all CWB controlled you know you couldn't win that vote.

[craig]

Tower Your arguments are even less compelling than those in the WP editorial. We have enough spin doctors already working at the CWB.

[Burbert]

tower, Good on you, tell it like it is. These guys/gals on angriville live in a dream world, hitting home runs all the time, clutching and grabbing every penny possible, greed drives them. Weird ideas dominate this section of the site. Real farmers, just like real men, know how to separate the bull from the chaff, just turn up the wind and watch the angrivillers whinnne and snivel. Theft of grain, injustice, comedian commies, nds, no free buybacks, freedom day, where is the 5 cents that the CWB owes us since the 30's, corruption yada, yada, yada, ho hum PC's are the best, Ralph is a great good man of vision, market choice, confiscation, bad Comedian border guards. The world is agin us boohoooooo!

[TOM4CWB]

Burbert,

GREED?

You steal my grain... and then call me greedy because I object to this confiscation at less than fair market price?

Then your buddies at the CWB sell it at the bottom of the market, blow the basis apart to tax back revenue to pad the pool... what a scam.

Take a good look in the mirror... guess what you are doing BURBERT!

[tower]

Farmranger and silverback, Gains leaders might be what's paid in the American market, or what would be paid as an incentive to get Canadian farmers to give up the board so that losses could be recouped. The multinationals must just seeth at having to deal with farmers who have some measure of control over their marketing. This would be why it was so great for them to buy up the pools.

Grain prices are also higher there because there is higher government payments for grain in export markets allowing grain prices to be higher for domestic. If either of our liberal or conservative governments over the years had what it takes to stand up to American trading practices the ratio of our costs and returns might be different for domestic grains.



Anyone have any ideas concerning where these companies have stood on the many American attempts to shut the board down?

craig, have another look at this part of my earlier post, Contrary to your opinion I can see where they are compelling.

"Craig, I mentioned the impact on domestic feeders a couple of times in earlier posts. It may be argued that there are benefits to a pile of cheap grain for our cows and pigs and chickens, it might also be argued that our domestic users should try to use the market place to get returns which will cover the cost of having their domestic suppliers supply them.

As a grain grower I understand that my neighbours with livestock aren't getting good enough returns. I also understand that it isn't the grain growers responsibility. If society wants meat in the market let them pay for it, and not just all the processing and packageing and advertising in between. "

[charliep]

Just curious how many who are posting will contract/deliver barley to the CWB. Talk is cheap but the decision about where to sell barley is really where the rubber hits the road for CWB performance.

The prices in the open market world June July were $3.50 to $3.75/bu for feed barley and $4.50 to $4.75/bu for 2 row malt (6 row half way in between). I won't put down export targets because the Canadian barley situation is tight and the CWB still cannot compete for domestic supplies. The combined malt barley and feed barley pools are likely to be less than 2 MMT in the coming year when these numbers should be 3 MMT.

The above are the targets the CWB performance should be judged by for the coming year.

[silverback]

"...might be what's paid..." pretty good argument tower.

Maybe the americans are getting more for their grain because that is what it is worth around the rest of the world!

Dreaming up conspiracies to explain away the lack of competitiveness by the cwb is a pretty sad state of being.

Please explain how grain companies would be seething at dealing with farmers who have control over their own marketing? Who do you think a grain company would rather deal with, a farmer who is willing to work hard to find the best market for his own grain, or one who could care less and rather let someone in Winnipeg do it for him? Who do you think usually produces the highest quality crops on average? Do you think grain companies would rather deal in high quality grain or poor?

Are you also saying that they must just hate having to pay US farmers more for their grain and wouldn't it be nice if there was a US wheat board so they could pay less?

Please explain the value of the cwb in stopping these grain companies from paying us world market prices. It would sure suck to get an extra buck or two a bushel for our wheat this year. It is probably better this way.

[silverback]

Charlie, well said!!

I was wondering the same thing. Burbert, Tower, Benny & Agstar, so I would assume you guys aren't even considering the open market for feed, you've already signed your barley up with the CWB for $4.72/bus, less freight??? Give me a break, bunch of windbags!!!! I will bet at least 1/2 of you have priced some barley for fall delivery non board. Why is that??
Except Burbert because up in Flin Flon they don't buy grain off the combine!!!

[parsley]

craig said:

"Your side should be asking for the CWB to handle all feed barley."


The CWB operates in a dual market now.

1. Not just a dual market in Western Canada with feed wht/barley bypassing the Board not only into feedlots, but all the grain going through the Export Manufactured Feed Agreement.(EMFA)

With the EMFA, the companies are allowed to buy feed wht/bly directly from farmers, and bypasss CWB marketing and CWB pooling.

tower, why doesn't the CWB actually MARKET that feed wht/bly to the big companies on behalf of the farmers?

The CWB chose not to.


2. The CWB also operates in a dual market within Canada. If the CWB were truly serious about not being able to operate without a single-desk,, they would be lobbying to add Quebec and Ontario under their single-desk umbrella.

Has lobbying to add Eastern Canada to the DA ever been presented to a Standing Committee by the CWB, for example?

And since the CWB itself claims they can only perform well IF they have a single desk, and since they do NOT have a single desk in Canada, one has to conclude that, by their own logic, their present performance is miserably deficient.

One could argue that compounding interest benefits an investor, so surely the CWB should be arguing that the degradation of profits over time, from lack of a national single desk, has eroded the profits/interest of those Western Canadian farmers held captive in the Designated Area by the CWB's refusal of export licenses.

What is good for the geesey-gaggle in the West is surely also good for the well-fattened French goose in the East, but needing a good Wheat Board rendering in a single-oven.

Parsley