New crop barley

[Ron]

AlbertaWheatPool/Agricore/AgricoreUnited/Viterra/ViterraSoonToBeCargill finally has new crop barley.
191.20 less 30.00 basis nets 164.10 (3.51/bu)
Last year I would have jumped all over feed barley at 3.50 (dont want to talk about the stuff I sold at 2.95 and didnt grow).
With the feeding industry on the skids, Canadian dollar rising, and no open market (see, I can blame the CWB for everything, including my receding hairline) is 3.50 a good price for next year?
I am giving it some hard thought, 3.50*90bu=315/ac gross. I it is the worst sale of the year it would look pretty good.
Cotton will tell me it is way to low (and he may be right). If nothing else it will let you guys lock in at 4.50 2 days after I lock at 3.50 (I have a very proven track record for picking lows).
Is the CWB moving any feed barley this year?

SCREW the CWB

[melvill]

Ron, for Charlie's and my info, it would be very helpful it you could tell us roughly where you're located. That would help us with the basis issue now that w. barley is priced at Saskatoon.

The question about pricing at $3.50 comes down to a couple of things:
1. given the possible or likely increase in input costs, does $3.50/bu times your average yield give you a profitable situation - covering all cash and fixed costs and some scheckles for your labour and management, and
2. what is your expectation on barley acreage next year in W. Canada?

Again, for me, though, the basis vs your location are the interesting part.

Finally, i confess i was seriously considering misspelling half the post just for the reaction.

[Ron]

The price is at Lacombe Viterra, I see Berthold, ND has new crop feed at 4.00 and malt at 5.00 if that relates to anything here.
I dont know about acreage, canola prices/input costs/clubroot versus much higher wheat production worldwide/CWB delivery/barley is so easy to grow. I will need a couple beer before the puzzle comes together and its still a bit early for that.

[Ron]

I keep forgetting the most important part

SCREW THE CWB

[melvill]

Ron, you made me laugh, but shouldn't it have been:

SCRU THE See-dubeu-bee

In all seriousness, though, whether $3.50 is a good price depends on one's perspective on new-crop barley acres - I think it's going to increase significantly (cheap and easly to grow) - and U.S. corn acreage.

[charliep]

The $30 under basis is what I would question most. I suspect a back to back sale on the grain company part with the $4/bu or whatever the delivered feedlot price fall 2008 being the major factor - not the relationship with futures. Would suspect it is a year to hedge using futures but need to have the margin worked out if prices head higher this summer.

Will note significant changes are being proposed by the CWB which will relate contracts more to western barley futures (assuming status quo). An open market (assuming legislation or some other solution) will drive more hedging/pricing to western barley futures. What this highlights to me is the importance of everyone using the current contract more in their hedging and pricing activities perhaps starting the liverstock industry.

For those of you who are not following/aware of proposed CWB barley changes, ignorance is not bliss.

[just_wondering]

Charlie are the grain co's getting info before the farmers?
I follow the CWB issue more closely than most, and the CWB directors just say we'll be happy.
Strahl-Ritz- Harper have all said that and I end up madder than before.

[charliep]

My understanding is 4 questions were examined at the focus groups.

1. How to amend the delivery contract to address concerns over delivery periods.

2. Direct selection by the CWB.

3 CWB Production Contracts.

4. Guaranteed minimum price contract - Indications are this was the major topic of discussion of the focus group. Some type of producer pricing option that would offer something close to cash pricing but not quite - still a producer pricing option. The contract can be done directly with a maltster and include an element of pricing in addition to a production contract. When a farmer signs the deal, the price the farmer gets paid will not likely be the same price the malster pays/gets deposited in the pool.

Will stop here as I wasn't at the focus group meeting and am dealing with second hand information.

[charliep]

Note your question on what the grain companies know. No answer to your direct question. Would appear they are getting squeezed out in this process with maltsters better able to deal with farmers directly and the CWB taking a more active role in the export market (i.e. China/COFCO). Given the CWB has no facilities and will rely on grain companies for blending/logistics capabilities. The issue will be who takes the risk on these issues and at what cost. Would suspect that some grain companies (read the big guys) will have a different attitude to this process than others (perhaps farmer owned terminals).

[charliep]

As Charlie has mentioned some significant changes to how we as malt producers could be dealing with a more cash pricing environment starting Aug 1/08.
the issue still does not address the high percentage of producers in some areas that grow exceptional malt yet don't have a permit book. A need for direct pricing an contracting with all producers is still there.
My thoughts are that the Maltsters have done a 180 on this matter, they are the drivers now and want a fully deregulated business. Perhaps in June and July when some of them were pushing for no changes and compensation they did get enough farmer flack, and realized that with out the producer willing to sell to them then they'd be out of business whether the CWB was an issue or not.
As to relations the CWB has with the line companies, I have got the feeling that the majors (Viagra, Louise, Carwuss) relations with the CWB are worse than ever. Why not? they are the big bad multinationals. Now with Adrean Measner in as CEO of Great Lakes (Mission terminals?) this farce of a board of directors will push what ever grain they can to their friends, and not the ones that have built a system that is efficient and can move our grain.

[just_wondering]

re: Direct selection by the CWB
How would this work?
Would it mean on farm buying?
How would the CWB manage storage losses?
I will reserve judgement on their new program but this is a lot of maneuvering to duplicate open market buying.

[ProFarmer]

Big meeting Nov 30 Ritz coming to manitoba. Maybe he will give us some direction. oh yeh. Screw the CWB