I am seeing the new slant the CWB and it's supporters are using. Free enterprisers were stupid and sold their grain too early. The CWB on the other hand held off and is now reaping great returns for it's producers. Another example of where the board has the opportunity of hiding under secrecy about it's grain sales program. By the time we all find out it's easily dismissed as history. The sad situation is there are so many farmers who are prepared to believe this load of garbage.
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Good point.
The CWB needs to put up or shut up. If it wants to talk about the timing of sales that others did and compare itself to them, that's fine. But it also has to show us how much they sold and when if they want to be taken seriously.
Any one can say they have a Lamborghini in the garage if they never open the garage door.
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Letter to the Editor
I am writing in response to Mr. Beingessner’s recent column in which he mocks me for wanting to sell my own wheat and barley outside the Canadian Wheat Board monopoly.
I’ve never met Mr. Beingessner and I have no idea what makes him think he knows what’s best for my farm. If he wants to accept a pooled return through the CWB, I have no problem with that.
However, if I want to make my own grain marketing decisions, why does he want to prevent me from doing so? What sort of arrogance allows him to think he knows how to run my farm operation better than me? Can I now expect him to visit my farm next spring and ridicule my production decisions too?
He says (in hindsight) that I sold my barley too early and that I would have been better off holding on to it and selling through the CWB. What he doesn’t know is that I’ve been selling barley into the off-board market for the past several months for prices that have ranged from $4.50 to over $5.00 per bushel.
In my short farming career (10 years), I’ve made good marketing decisions and I’ve made bad ones. That’s not the point. The point is I simply want to accept responsibility for my own decisions and not rely on the decisions of those who work for the CWB.
Mr. Beingessner may be a well-established farmer who is quite comfortable relying on the decisions of CWB employees. I can respect that. But what I can’t respect is him telling me what is best for my farm.
Mr. Beingessner suggests I should use producer cars to sell my feed barley. This illustrates just how clueless he is about farming in the Lethbridge area. No one here uses producer cars to ship feed barley to the CWB and haven’t for years because the returns the CWB provides don’t come anywhere close to what the off-board feed market provides.
Mr. Beingessner, I believe you should be free to make the production and marketing decisions that you think are best for your farm. All I ask for is the same consideration in return.
Stephen Vandervalk
Alberta Vice-President
Western Canadian Wheat Growers Association
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craig
When I hear, I always ask the question why the CWB has to apply the adjustment factors to fixed price contract. If no existing sales at lower prices were on the books, there would be no adjustment factor.
Similarly, I also would quiz on the unpriced carryover from 2006/07. The CWB was quiet open on the impact on last years pool returns (negative). My guess is the carried over old crop inventory is a net drag on the 2007/08. If they really believed their own words, the CWB would have processes like multiple pooling periods within the crop year, cash pricing at the end of the crop year, etc to ensure old crop inventory is priced and does not impact new crop.
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Dear Craig,
I find this "Priced too early" argument particularly galling...
IF I were paid with a competitive Basis to a Montana wheat grower has been paid the last couple of weeks... I would be within $20/t of the CWB Sept/07 PRO. Instead our farm is $70/t short... for one purpose only... TO MAKE THE CWB POOL AND MANAGEMENT LOOK GOOD.
Because the CWB can... not because the CWB is being fair; or the CWB earned this honestly by creating value for those it has an obligation to serve....
ALL "designated area" wheat and barley growers... not just those who feel entitled to confiscate their neighbours grain by Pooling... at every one else's expense... and to their own benefit!
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Just so everyone can read the drivel, here is the article from SMCWB.
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Farmers Guess Badly on Wheat Sales
Paul Beingessner
Western Canadian Wheat Grower vice-president Stephen Vandervalk is no quitter. Despite showing the world how wrong he was he isn't giving up on his diatribe against the Canadian Wheat Board.
In August, the feisty Albertan ranted against the CWB's Pool Return Outlook (PRO) for barley. He trumpeted his own cleverness at selling much of his yet-unharvested crop before the CWB announced it would challenge the federal government's attempt to remove the single desk from malt barley and exports of feed barley. That challenge, according to Vandervalk, caused the price of feed barley to plummet and cost him big bucks on his remaining unsold stocks. As to malt barley, Vandervalk said a maltster offered him $4.75 a bushel for his. The court case put a stop to that and he claimed the lower price the CWB was projecting would cost him dearly.
A short month later, Vandervalk should have been gnashing his teeth. The September PRO was projecting $5.43 for malt barley at his Alberta home and the feed barley he pre-sold for $4 was projected to be worth $4.64 delivered to the CWB. Vandervalk lost big all right, not because of the CWB, but because of his own feed barley marketing folly. The CWB court case saved his from making the same mistake with his malt barley.
Rather than be chastened by his marketing failure, Vandervalk continued on his quest to damn the CWB. In late September, he was showering farm newspapers with information comparing U.S. elevator prices to the CWB PRO. According to these figures, Vandervalk was losing a small fortune because he could not sell his durum across the line. Comparing the elevator price in Montana, which hit $13.10 a bushel that week to the CWB PRO of $10.70, Vandervalk's estimated deficit would be $151,000.
You have to give Vandervalk some credit here. Despite being prevented from ever marketing his own durum by the CWB monopoly, he apparently would be far better at it than most American farmers who do it all the time. According to the marketing director of the North Dakota Wheat Commission, most durum farmers in his state missed out on the high durum prices because they sold earlier, at much lower prices. Those prices looked good at the time and no one was projecting the heights to which durum would soar. Nor were North Dakota farmers the only poor marketers. Wheat farmers in Washington state also blew it, selling some 70% of their crop before prices reached their highs. As much as 50% was sold at values roughly half those available today.
If Vandervalk were selling his own durum, it seems safe to assume he would have done what he did with his feed barley - sell much of it early for what appeared to be good prices. It is unlikely he would have had enough foresight to wait until the day it hit $13 at a Montana elevator. It is also unlikely any Montana elevator would have been able to absorb his reported 63,000 bushels in one fell swoop.
Luckily, and despite his efforts to the contrary, Vandervalk has the CWB to protect him from his misadventures. No, the CWB will likely not sell all of western Canada's 4 or 5 million tonnes of durum at $13.00 a bushel. The U.S. can absorb only a small amount of our durum. The rest will be sold over the course of the crop year for various prices to various countries. And it will incur some large rail and ocean freight bills. But this year, the CWB will likely return far more to durum farmers in western Canada than their American brothers will receive, since much of their durum has already been sold for a relatively low price. Stephen Vandervalk is one of those lucky Canadian farmers, and if he were honest with himself, he would admit it.
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Off topic but this year has the feel of 2002/03. Note the Russians are leaving their export duty at 10 % (not increasing to 50 %). US wheat futures have drop over $/bu. All that needs to happen now is the loonie continues its climb to the $1.25 US bucks tom4cwb has noted. Dejav vu.
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Don't you just love the condesending attitude of Beingessner? Same attitude as the cwb by the way.
By Beingessners logic we are just aren't bright enough to look after our own affairs. Why not carry this logic all the way through. Lets set up a board to choose our spouses, this way there won't be any marriage's end in divorce because the "board" will be so much smarter than you and will never make a bad decision.
Isn't it time PM Harper allows us all a divorce from the cwb? It's inhumane to continue to have us forced into this dysfunctional marriage.
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Perhaps also says something about the CWB supporter attitute towards producer pricing options.
Someone who used a fixed price contract because it had a fit with their risk management strategy/marketing plan is delivering for a price below the current market. They have paid the cost of managing the CWB risk relative to the pricing pools. They recognize that any excess money from the producer pricing options is either deposited in the contingency or worst redistributed to their neighbors in overall pricing pools.
Farmers using the fixed price contracts today face all the above costs plus they get wacked with the adjustment factor for existing sales.
If you choose to stay in the overall pools, you face the risk of another 2002/03.
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A strange argument when a managers objective is to sell for good price on a given day and get paid. This is different from accepting the average price and then having that price discounted.
What seems to be lacking from the discussion is the cost of the program for managing CWB risk (not farmer risk). This is money that the farmer (not the CWB) pays which will never be seen again. If a farmer grow one tonne per acre and uses an EPO on 25 % at a premium of $26.75/tonne, their cost/acre has gone up by $6.70/acre. They also face the dilemma of making the decision today or Friday with big changes possible on the PRO Thursday.
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Not that this seems to a big issue for many, but I grew an American un-rgistered (in Canada) variety of wheat, still un-contracted and un- priced. On Monday this wheat was quoted in Bottineau ND at $8.25/bu.
So by Beingessner's logic am I not "smarter" than the cwb? because that price is better than the PRO which I'm not eligable to participate in anyway.
Too bad I'm one of those un-lucky farmers stuck with the single desk for single desk varieties only.
If you prescribe to Beingessner's logic, that is.
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Agstar, in case you haven't done any business in your life, this is how its done. You enter into a contract with the buyer, deliver the product, and receive a cheque. It's simple and straight forward, and is a very commonly accepted practise in the business world. If you guys at the CWB could get ever past the ideological obstacles you place in front of yourselves and everyone else, maybe you'd understand. Of course you'd also need to replace your condescending arrogance with a bit of respect for individual farmers.
The CWB (and that of their ideological sould mates) arrogance is really something else. The CWB now predicts that the market highs are behind us for barley and wheat. Its a good thing they are so smart. I sure hope (only for their sake) they've priced the whole 2007 crop....and probably the 2008 one too. The rest of us who aren't nearly as smart probably still have some inventory. So unfortunately for us according to the CWB, prices are only going to go down from here on and if we aren't in the pool, we're going to lose. I hope the arrogance can make way for at least a bit of pity for the unwashed.
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