CWB trapped?

[parsley]

From a farmer's perspective, it is a prudent to endure a marketing-colonoscopy so that you have a clear view for the rumours circulating around your head:

1. No government guarantee on this transaction.

2.There is no obligation for delivery.

3. No obligation by the CWB to take possession.

4. No obligation for the maltster to take possession.

I should add, that I made an error. The price rumoured was $6.25, and not $6.50.


And finally, if you sign the CWB contract, you might want to stroke out a few things and pen in a few of your own requirements.

What a novel inspiration.

Parsley

[charliep]

MY UNDERSTANDING

1. No government guarantee on this transaction. YES

2.There is no obligation for delivery. FROM A FARMER STANDPOINT, THERE IS AN ACT OF GOD CLAUSE BUT MY UNDERSTANDING (HAVE TO READ THE FINE PRINT) IS GRADE/YIELD LOSS WILL HAVE TO BE VERIFIED BY THINGS LIKE CROP INSURANCE REPORTS, BIN INSPECTIONS, ETC. THE COMPANY WHO SIGNED THE CONTRACT HAS FIRST RIGHT OF REFUSAL SO AGAIN THE FARMER WILL HAVE TO PRESENT SAMPLES.

3. No obligation by the CWB to take possession.
PERHAPS WITH THE EXCEPTION OF BUSINESS THE CWB EXECUTES THEMSELVES (IE CHINA BUT EVEN THEN TENDERS AT PORT/DOES GET INVOLVED IN THE COUNTRY), THE CWB ISN'T INVOLVED WITH THE SELECTION OR DELIVERY OF MALT BARLEY. THIS DOESN'T CHANGE.

4. No obligation for the maltster to take possession. THERE ARE MORE TEETH IN THE NEW CONTRACT (AGAIN NEED TO READ THE FINE PRINT) TO ENSURE THE MALSTER TAKES DELIVERY WITHIN THE COMMITTED WINDOW IF THE MALT BARLEY MEANS THE MINIMUM SPECIFICATIONS WITHIN THE CONTRACT. THE CONTRACT (WITHOUT FINE PRINT) IS IN THE CWB PRESENTATION ON CASHPLUS AT THE SASKATOON CROP DAYS.

THE QUESTION IS REALLY WHO IS GOING TO ENFORCE THE CONTRACTS. THE CWB HAS NEVER TAKEN ON THIS ROLE IN THE PAST.

And finally, if you sign the CWB contract, you might want to stroke out a few things and pen in a few of your own requirements.

YOU WILL HAVE LOTS OF OPPORTUNITY TO NEGOTIATE WITH THE SELECTOR ON OTHER TERMS OUTSIDE THE CWB CONTRACT. THESE TERMS WILL LIKELY MEAN PRICE PREMIUMS. HAPPENS TODAY WITH THINGS LIKE THE SAPPORO CONTRACTS. THE FRUSTRATION FROM THE SELECTOR IS THE CWB PAYS FARMERS A DISCOUNTED PRICE, COLLECTS A PREMIUM PRICE FROM THE MALTSTER BASED ON WHERE THE SALE IS GOING AND THEN EXPECTS THE SELECTOR TO ANTE UP AGAIN WITH PREMIUMS FOR THE FARMER. LOTS OF PAPER/COMPLEXITY IN THIS SYSTEM.

[Maltster]

Parsley/Charliep,

Some interesting items that I haven't seen explained by the CWB yet:

1) Farmer can only contract with a selector/maltster who has completed negotiations with the CWB on a barley purchase contract meaning that the farmer does not get to pick the time that he will sell nor neccessarily who he will sell to. No Marketing Freedom there.
2) Since the selector decides the timing to book his barley from the CWB and presumibly he will be looking for a time when prices are at their lowest, has the CWB permanently discounted the market by not being an active marketer?

Is it just a coincindence that the CWB's indications of what a Cash Plus value to the farmer would be has risen from $5/bushel in early Janaury to $6.50 today while most in the industry have rejected the program as not being Transparent? Market prices would be well over $7 net to the grower and really haven't changed much in this same time period.

It would take a true cynic to think that this would have been an attempt by the CWB to capture a larger spread from the farmer in order to cover the losses in last year's contingency fund.

By the way Vader, a shill is defined in Wikipedia as "a critic who appears all-too-eager to heap glowing praise upon mediocre offerings".