Is any CWB cash pricing Fair?

[TOM4CWB]

Charlie,

Just going through this PPO Fixed Price Contract/CashPlus etc.

The difference between the Fixed Price Contract price... and what it would cost to buy my grain back... it the CWB benefit

For the CWB to maintain the "single desk" the system has take from cash prices... and give the money back to the CWB... of the "single desk" is gone.

CashPLUS can not function differently... or the same result will occur.

Long and short of this... whether it be "Cash PLus" or any other CWB PPO program... they will all take world arbitrage from growers and fail to allow a transparent market...

Indeed arbitrage to attain world market value... on any cash price... is the principal the CWB 'single desk' MUST prevent to survive.

As long as the focus of the CWB is the 'single desk'... we will not get fair market value for our produce.

The CWB is a slave to the "single desk"... itself... which prevents it from being the facility that maximises our value as "designated area" grain growers. Industry interests easily beat a growers interest... simply by the CWB's own process of Sales and Handle.

[agstar77]

But who will guarantee you a "fair" price under an open market? Have you received a "fair " price for your canola? Fair is an abstract term. What is more relevant is what the market will pay. If you are arguing that you would receive closer to what the market will pay ,that is an entirely different argument. And who sets the market price, according to recent statements by ADM, they no longer control prices, Hedge funds do. So do you want the price set by Hedge Funds?

[Raven]

So Agstar, tell us what happens if prairie farmers get export and inter-provincial licences?

[agstar77]

Let's see , I predict not much other than costs will go up and the net income of grainfarmers will be less. Oh yeah, the large grain companies will pay you more for your grain because you are such a nice person.

[Raven]

Sounds like monopoly broken with licences granted. Thank you.

[Lifer]

agstar please pass the kool-aid

[agstar77]

I might also add that even if you are allowed these so-called export permits you would be foolish to think that the Viterras and Cargills will sit still for it, not mention the market that you propose to dump into. Sounds good until you try it. We will also lose any branding of Canadian Grains we have now. It will be a short term gain for long term pain. Of course most on this board can't look out that far.

[Hopperbin]

Agstar the CWB never in their history guaranteed a farmer a fair price. So why would you demand that from an open market?

[agstar77]

Like I said fair is subjective, I would expect a so-called fair price only what the market is willing to pay. The CWB price is no different ,on aggregate it is the market demand that sets price. If you want fair go to a marketing board approach as in milk and eggs. That is not to say there are no advantages to group marketing and controlling the quality and rate at which exports are made.

[AdamSmith]

Let's see , I predict not much other than costs will go up (Agstar please explain why you think costs would go up?)

and the net income of grainfarmers will be less. Oh yeah, the large grain companies will pay you more for your grain because you are such a nice person.

No the large grain companies would have to pay the going market price (it's that arbitrage thing again) or else they wouldn't get the grain.

I might also add that even if you are allowed these so-called export permits you would be foolish to think that the Viterras and Cargills will sit still for it,(Your right here, they would lose their captive grain, now they would have to compete to get it plus they will never make as much handling wheat in an open market as they do with cwb tariff rates)

not mention the market that you propose to dump into. (Uhm Agstar that market is moving limit up everyday trying to pry wheat out of the hands of farmers, they are short product and we individual farmers would not "dump" grain into that market, we would sell at current market values. Also the Americans buy our Canola, our Oats, our flax our Rye, our Sunflowers they buy Ontario wheat, their opposition to wheat and durum has been 100% because of the cwb, because in the past the cwb did "dump" wheat into their market and crashed local basis levels.)

...So do you want the price set by Hedge Funds?

Yeah I do, they add liquidity and they aren't afraid to take the price of wheat up to the stratosphere, unlike ADM and the CWB. Hedge funds have no political axe to grind, they have no biases towards friends or enemies alike, there are no special deals or favours, it is just pure price discovery. Granted it can be a bit of a rollercoaster ride at times but hedge funds have added more value to the grains sector than all a hundred marketing boards ever could.

[Raven]

We need VADER to wade in. Vader, what will happen if prairie farmers get licences?

[agstar77]

They may want your grain now, but not if prices drop and they have a good crop. Viterra and Cargill have cozy deals with the railways, good luck moving more than a B-train. There is also a shortage of grain haulers so be prepared to get your own B-train and spend your time on the road. Better get all your paperwork done so you have no trade problems at the border and you receive proper payment at your destination. These are only minor short term issues. There are longer term problems that would have to be addressed. There is a growing linlage between grain companies and production contracts. This will limit your so-called arbitrage.