Malting Barley

[Zaphod]

Yesterday, Wiesensel said they had sold 700,000 tonnes to domestic maltsters months ago at "lower prices". I thought their strategy was to sell roughly even amounts through the year. I understand some forward-selling is a good idea, but this means the board sold roughly three quarters of the domestic maltsters' needs before the crop was even in the ground.

They are going to have to sell a lot of malt barley now to increase the average pooled price to reasonable levels. Wiesensel refused to say how much they had sold since Aug 1 at prices around $325 per tonne. I'm guessing it won't be enough.

[chaffmeister]

Memo to Agstar:

Just to keep you informed, I have never “predicted the market” here on Agriville – or anywhere else for that matter. My focus here on Agriville, if you haven’t noticed, is to show as clearly as possible that the CWB system is not working for you. It’s costly, it’s cumbersome, and it saps entrepreneurial spirit. Contrary to what the U of S might try to say, it does not get premiums and yet it keeps individuals from snagging them for themselves.

I guess I have made one prediction – farmgate prices on both CWB and non-CWB crops would be better without the CWB.

You admit you are “no better than the rest of the traders who claim they are lucky to be right more than half the time” – and you must know full well that CWB traders are in the same category, even though they don’t even try to be “right” because they aren’t traders – they’re salesmen. I was told by one CWB salesman years ago that they would never refuse to sell on the grounds they thought the price was going higher – they might be wrong and they might lose the sale. So whenever the buyers are calling, the CWB is selling. It has nothing to do with maximizing farm returns or with averaging prices over a crop year. It has everything to do with covering your ass.

The only plank the CWB has left to stand on is this idea that they can price discriminate. And if they’re blowing grain out the system like they appear to be (i.e.c heap), who cares if they can squeak out a slightly better price from Japan than from China on a particular day (which they can’t).

Here’s a bit of irony for you. The CWB has always said that it gets premiums from the domestic maltsters on domestic brewing business. Their definition of premium is of course a better price than they would get from another buyer ON THE SAME DAY. Well, when they sold to the domestics last fall, they may have gotten a better price than they would have from say, China, BUT:
1. They weren’t selling to China (or anyone else) at that time so it’s a moot point, and
2. The sales to the domestics certainly aren’t premiums to other markets now, now are they?

I asked this in another thread – I’ll make it a direct question to you Agstar: What is so bloody sacred about the CWB that you won’t even consider its shortcomings?

You like to look at transportation and talk about support systems, yet the biggest financial problem for grain farmers in Western Canada is the CWB – with its poor performance and high costs - and yet you won’t touch it. Won’t discuss it. You think anyone who wants to get rid of it is self-serving and greedy.

You can fix all the transportation woes you can think of but the CWB will still cost you more.

You can put in support systems too – but let’s face it, they would just be there to counter the poor economic returns from the CWB system. As a taxpayer, I get incensed by the idea.