Market Signals from the Aussies

[TOM4CWB]

Charlie and Lee,

there is some good logic here:

Wheat and Barley Marketing Strategies
Pool Versus Cash All client should plan really hard to try and avoid delivery to any wheat and barley
pools this harvest, particularly to pools being run by AWB and ABB where we already have some information that suggests their pools cannot perform well against spot cash prices.

Because of the inverse in the market assume that it will not be attractive to store wheat or barley for sale later in 2008 either. Don’t even think about fattening lambs or cattle using $400/t grain.

So, the trick will be to try and sell as much wheat and barley for cash before and during harvest. At this stage the market is not even going to reward you for delaying sales until
March.
With the deregulated barley market and deregulated container market, assume that cash prices can, and will,
reflect international prices more closely than we have been
used to, in South Australia in particular."

Both AWB and ABB do offer cash prices that match trade prices on barley, which (NO SURPRISE) proves once again that the Choice market returns the grain grower the highest returns... and Pools drag the price down for grain growers.

As in business management and so many other parts of life... timing is everything!

Winston Churchill's saying;
‘The inherent vice of capitalism is the unequal sharing of blessings,
while the inherent virtue of socialism is the equal sharing of miseries.’

Manditory Pooling IS SOCIALISM... and anyone who says it holds up or "Maximises" returns must work for the domestic livestock industry.

[melvill]

Tom, I work very hard at staying away from political posts here. However, I was in California with my wife's entire family a year ago in April. I was standing in line at Disneyland and ended up talking to an American from the mid-West. When he found out where I was from he had all kinds of questions about 'the socialist country up north'. I have to confess I strongly resented that label! Turns out he was specifically talking about our socialized medicine, which he said, gave our small manufacturing companies an unfair advantage. Turns out in the end that he begrudgingly admitted that was something the U.S. needed. Funny, isn't it, as Paul Simon said, "One man's ceiling is another man's floor". He talked about how much it costs his small metal fabricating business to buy health care insurance for he and his employees. On top of it all, the insurance he could afford to carry, had a $5000/year deductible for each family. The premium for each family varied by the somewhat subjective "healthiness" of each family member. The premiums for smokers and overweight participants were significantly higher than non-smokers or people with a low BMI. That cost for his company was significant. He was thinking about offering non-smokers and low BMI employees a salary bonus.

Okay, give me a minute to fasten my seatbelt for the blasts I'm likely to get.

[TOM4CWB]

OK LEe,

I will bite:

What exactly does this have to do with:

a) CWB mandatory pooling... when the CWB Act does not require mandatory pooling; and allows the CWB to move to an Ontario Wheat Board type system where growers would cash price unless they signed up to a pool by a certain date;

b) Huge distortions have been built into the Western Canadian "designated area" economy because of these CWB arbitrary and vexacious polices;

c) the CWB should have instantly exempted barley used for feeding purposes since 1996, when Commissioner Ken Beswick had a plan to make barley marketing competitive and arbitage the global grain markets... but still has not done so;

and there is NO relationship with Canadian Health Care I know of in the above issues.

I need you to take the above CWB issues seriously when you talk to the CWB. Interesting enough though Lee!

[liberty]

You might have answered his points as follows:

"...socialized medicine,... gave [Canadian} small manufacturing companies an unfair advantage."

Canadian companies pay significantly higher taxes in this country which cancels out the benefits of not having to buy health insurance. If this fellow's statement were true, we'd have seen torrents of American firms locating in Canada for many years now. But that is not the case at all.

"He talked about how much it costs his small metal fabricating business to buy health care insurance for he and his employees."

If you sat down with this guy and compared his present tax burden with what he might expect in Canada, that might change his mind in a hurry. He's only looking at the issue from one side. "Free" healthcare in Canada is anything but free.

There are other factors at play in driving up healthcare costs in the U.S. that don't exist in Canada, such as the ridiculous cost of liability insurance for medical care providers thanks to American tort law. If the U.S. implemented socialized medicine, these costs would still be present, but would be borne by taxpayers instead of the users of medical services. They would certainly not vanish.

American medical service providers are also burdened by states legally mandating coverage for chiropractic and psychiatric treatment, for one example of many. The costs of these "add-ons" jack up premiums for purchasers who otherwise wouldn't buy such coverage. Thanks to this version of "medicare lite" at play in the U.S., in most states it is virtually impossible to buy reasonably priced, no-frills, basic catastrophic medical insurance. How instituting full-blown socialized medicine would resolve this problem is anyone's guess.

"The premiums for smokers and overweight participants were significantly higher than non-smokers or people with a low BMI."

Nothing wrong with that at all. People should be rewarded financially for pursuing healthier lifestyles. In the Canadian system, such goals are next to impossible to achieve because the user of medical care pays nothing in direct costs.

[melvill]

Actually, Tom, I was responding to the "socialism" label that, along with the "C-word", is used in posts here sometimes. You're right, it doesn't directly relate to marketing policy other than it gets used plenty here. As I said, I really resented that label when the U.S. citizen I was talking to applied it to Canada. Over the years, I've found that a lot of Americans view their northern neighbor as a socialist state.

Thanks for the "bite", Tom. LOL.