Barley Schemes

[Kodiak]

I’m hearing more and more reports that the CWB is buying (at least offering to buy) non-board barley from the trade, and selling it into export channels. Given the spread between domestic non-board prices to farmers for barley and world values ($150-$200 prairie region - vs - $350 VCR with roughly $50 for freight & FOBBING), the CWB is able to make a HUGE profit - $100/MT or more.

Where does this windfall go?

[Fransisco]

Oh, I don't know...maybe into projects like this?

http://www.cwb.ca/public/en/newsroom/releases/2007/100307.jsp

[Kodiak]

Yes, waste is a big problem at the CWB. Lack of financial accountiblity ensures that.

But in the bigger scheme of things, how is this fair to either the farmer who has no choice but to sell barley at below world value? The CWB is going to reward some farmers, and others will be penalized. You will only get a piece of the pie if you go to the board (maybe, depending on which pool this ends up in, or if it pads the contingecy fund), buteven then its going to be a very this slice. Waste and mismanagement will eat it up.

There are no winners really. Domestic barley users might be, but only in the short term. They would have had alternatives during this particular time of high world barley values, and could have counted on barley again in the future.

This will do more to discourage barley production than anything else. Producers AND consumers lose in the long run.

[TOM4CWB]

Kodiak,

I noted on another thread about the ABB and their pool management:

"Barley Prices Prices have tended to ease over the last week, much the same as wheat prices have. Presumably
some SA growers sold barley as well as wheat after last week’s rain. In Adelaide best prices on feed barley are
down $15/t to $420/t. Note that this is still way better than the best wheat price at around $385/t.
In Victoria feed barley prices are back $20/t to $420/t as well. Prices in SA and Victoria continue to trade close together, again in stark contrast to the wheat market where
SA prices are significantly lower. Maybe the difference in marketing systems is the main reason for wheat prices to vary so much across southern Australia.
In terms of pool returns, ABB’s select pool will net about $390/t, against current cash prices of $420/t. Anyone who feels they have the capability to forward contract barley would be better off taking the cash price as opposed to committing to the ABB Select Pool.
Malt barley prices are moving ahead of feed barley compared to where they were several months ago. In Victoria where there is more competition for malt barley, and a bigger domestic market, the premium for malt is $45/t
over feed barley. In South Australia the premium is a more modest $25/t."[Oct 2 Callum Downs]

Here is what is happening with Aussie Voluntary Pools:
"The first pool indicator came out a couple of weeks ago when ABB released their Select Pool with pool indicators of $437 and $427/t for malt and feed respectively. That pool was closed last night, and a new No. 2 pool opened. This new pool has indicators of $390 and $370/t for Malt and
Feed respectively."[Oct 2 Callum Downs]


It is VERY interesting to watch and see how well a "Dual Market" actually does work... when the marketer WANTS to extract value and pay it to their grain growers!

The CWB directors who spout their "myths" about the "single desk" should hang their collective heads in shame!

[TOM4CWB]

The last quote was from the Oct 9 issue of Callum Downs.

[Kodiak]

Tom, I'm not interested in emulating the Australian system of pooling or anything like that with the CWB. Over the last 12 months, the CWB has proven they are incapable of understanding farmers or the marketplace, and are incapable of change. We just need them gone.

This barley scheme of their has just cost farmers a hundreds of millions of dollars. They are depressing non-board values by $2 per bushel, not to mention their own prices are under value by the same amount. On 10 million tonnes marketed, it could even amount to $1Billion - just on barley.

We need them out of barley. They are not capable of becoming an organization that delivers value to farmers, either individually or collectively. Time to shut them down.

[TOM4CWB]

Kodiak,

I apologise, I thought your Scheme thread was looking for constructive answers of where CWB systems are weak... and where the money is going.

The CWB lost money... selling at bad times... is recovering some of the value they dropped... and putting it in the pool. If the CWB were still cash pricing barley... it could go in the contingency fund... but they are using the pool for all sales... which means all revenue flows to the pool account. My best guess.

I look at the CWB/us... like 2 people getting along in a partnership.

It is a choice.

You may have chosen to avoid the CWB at all costs... fine. Your choice is simple.

I would like to know WHO you think... TRUTHFULLY... is going to dismantle the CWB. It is not going to be the Conservatives... IMO... It is not going to be the COurts...

Who is left with the legal authority to take it apart?

The Provinces? Not likely!

SO who is going to take the CWB apart?

[Kodiak]

So Tom, is it OK with you that farmers who sell barley to a grain company are having $100/MT extracted from the value of their product by the CWB, who then hand to farmers who sell to the CWB? Is the CWB in the business of transferring wealth from one farmer to another? Or more to the point, are they in the business to artificially depress the value of ALL the barley in Canada with PRO's way under the market or refusing to run shorter pool periods and refusing to offer cash prices? Is it their role to intervene to prevent domestic users from having to compete with export customers?

Tom, the CWB is beyond repair. At one time I was willing to give them the benefit of the doubt, thinking the problems were structural. Their actions prove that even when structural improvements are availabe to them, they deliberately cause even more distortions to protect their marketing blunders or to buy political support from millers and maltsters. They need to be shut down.

[TOM4CWB]

Kodiak,

I agree the CWB is distorting the barley/feed market in Canada... that was never the question.

Corn is available @ $200/mt... local southern AB... so that has put a top into the feed grain market... in the domestic sense.

CGC grades are as distorting as the CWB at this time... how they grade 63lb beautiful wheat a feed for a light bran distortion... is beyond belief.

The question, I was asking, is... how do we actually get these folks at the CWB to change...

IF no one else is willing to shut them down or make them pull up their socks?

I was at a town hall meeting today... and a 75 year old fella gave me the lecture about how evil the Conservatives were for trying to take barley away from the CWB!

I quoted ABB barley pool prices... and the same type of concerns you raise about the lack of fair market signals and transfer of wealth...

If a person can politely nudge them in the direction of logical respect for those who grew the grain... the younger generation that is being broken by this bondage... I was then able to get out alive with my skin in tact...; and an agreement that the CWB SHOULD N O T sell grain unless a farmer first has committed to them under contract!

This is not over... is not an easy sell (change at the CWB)... it is a religious matter of "faith" and a convincing argument that there is a need for "respect" for others opinions... and for them to be fairly to be honoured!

If you told this fella... what you just told me... he would call you a mortal enemy.

He pulled out the whole 9 yards about how in 1918 his father was ripped off and forced to sell his grian at 18 cents a bushel... etc.

I really don't see how we will fix the CWB... with all this religious conviction backing the "single desk" by threatening to kill the CWB! DO You?

[Burbert]

The distortion going on in the barley trade, is here on Angriville. There are guys/gals here, who are legends in their own minds, marketeers and chiselers, grubbing around for pennies, to get a leg up on other framers. Who cares where the demand is coming from, sell the f'un stuff and take a decent return. Don't bite the hand that feeds you, you mutts are over analizing this market way toooooooo mmmuch. Enjoy it, it will correct itself soon enough.