Average US Malt Prices beat CWB Pool

[Fransisco]

See the details here.

http://www.siemenssays.com/?p=8938

[Fransisco]

Download the chart here.

http://www.siemenssays.com/wp-content/uploads/2008/02/alberta-vs-montana-malt-barley.pdf

[Fransisco]

Quote, "Many board supporters don’t like spot price comparisons with the pool price, they feel that it is not a fair comparison, while that point is debatable, even when one looks at average prices the board still comes up short year after year. The average of the 8 year average (and if its one thing Canadians love is averages, lets not get to extreme here) is $36.36 per tonne or 79 cents per bushel."

[bucket]

I do not understand this spot price thing with the pro boarders. Don't they know that the spot becomes part of the average price eventually. I hear from the pee ons in Winnipeg "don't compare a spot price its not fair".

So I say "ok, can we use a price from three weeks ago that is still higher than the pooled price"

The conversation goes down hill from there

[bsigg]

Canada produces 3 times as much malt barley as the United States.

Therefore these high spot prices would not exist if it was a free-for-all open-market because we would flood the US with malt barley.

The maltsters only need a certain amount of malt barley, anything more than they need will be at a discount, or possibly they wouldn't need to buy it at all.

Specifically in Montana, there are lots of feedlots and maltsters that consume alot of barley, and there is a huge demand for feed and malt barley.

Without the CWB, Some people would be able to sell into this market and get the high prices, but once alot of people start selling the prices will drop.

It would be pretty arrogant to think that Montana has a infinite quota and they will pay every Canadian Farmer the same price maxed out spot price.

[TOM4CWB]

bsigg,

The CWB 'single minded' logic fails to impress me.

This "having it both ways at once" is like being half pregnant...

SOmehow poolers believe the free market can be predicted beforehand.... and growers will beat the 'high' prices down... and 'low' prices even lower.

Anyone can hold back grain.

Anyone can sell grain.

The larger the player... the larger the volume... the bigger the disruption.

It is the CWB that must be charged as the guilty. The CWB has no cost... and no self-discipline because it gets its grain basically without cost.

Growers giving the CWB grain at initials @ 65% of 'fair market value' is not a cost... it is a gift!

Why are we so stupid?

[Fransisco]

bsigg said

<blockquote>...these high spot prices would not exist if it was a free-for-all open-market because we would flood the US with malt barley.<blockquote>

This data does not show high spot prices, that's the point! It shows the yearly average, highs, lows, and all points in between.

[chaffmeister]

bsigg:

In the interest of clarity and open mindedness, please share with us the actual numbers behind your comments:

"Canada produces 3 times as much malt barley as the United States."

Question: Please share the actual numbers to which you are referring.

"The maltsters only need a certain amount of malt barley, anything more than they need will be at a discount, or possibly they wouldn't need to buy it at all."

Question: how much malt barley do the maltsters need?

"Specifically in Montana, there are lots of feedlots and maltsters that consume alot of barley, and there is a huge demand for feed and malt barley."

Question: What is the barley consumption in the US?

[bucket]

bsigg

Here is what would happen in a open market. The maltsters would pay for barley. If they did not pay enough it would go to feed. If they did not put a premium to later months it would go to feed. They would be out of barley and then they would have to pay. The maltsters are not stupid. Once a producer sells to the feed market he can't resell it to the maltsters when they need the grain.

The maltster can get his grain by putting a premium on malt or bidding for it once he knows supplies. The latter it more of a gamble for him and could disrupt the business of making malt - that is even more costly than just paying a premium.

If you choose to be an average farmer and support the cwb good on you, but do not force that system on me.

Besides all you pro-cwbers here is a question - if you want to average my income why don't we start averaging expenses as well???

I'll bet you want to pay my expenses as much I would pay yours? not likely.
Same goes for this moronic average system that I am confined within.

[Vader]

Yearly average prices are NOT the same as weighted yearly average prices.

US prices today are a case in point. There is very,VERY little grain being sold by US farmers at these prices. (By Comparison the CWB is making significant sales at these prices because of a disciplined approach to marketing)

To fairly compare agains the PRO you need to multiply the volume of grain sold every day by the daily price and then divide the cumulative total by the yearly total sales.

Very high prices with very low sales volume adds little to the annual average.

But don't let facts get in the way of your Anti-CWB rant and delusions.

[FarmRanger]

So, it begs the question, why is our average CWB price so much lower than an average price that is geographically close?

Let’s see, we have a large monopoly buyer with forced sellers below them on the supply chain who cannot legally access higher paying markets elsewhere.

Nope, I can’t figure it out.

[bucket]

Vader you trapped yourself on this one.

You say don't compare the US prices because few sales from the US at these levels doesn't increase the weighted average BUT you said the cwb is making significant sales at these levels THEREFORE our prices should be higher than the US.

Why are we so far behind???

I suspect you to hide now and not answer!!!

Double talk your way out of this one!!!

[LWeber]

"To fairly compare agains (sic) the PRO you need to multiply the volume of grain sold every day by the daily price and then divide the cumulative total by the yearly total sales."



Uh Rod, the USDA does this.

FACT

On no grade no protein wheat (a WEIGHTED average of all HRS wheat sold) the U.S. farmer outperformed the CWB pooling system for 1 CWRS 13.5 by 81 cents.

FACT

Apples to apples they were 81 cents higher than the pooled price.

FACT

For the last 5 years, the data indicated the U.S. outperforming the pooled price.


FACT

The weighted average number is used to determine insurance payments in the U.S.
They don't screw with it.

When was the last time a benchmarking exercise was completed? Or is once enough every 10 years?

Go ahead, hire someone, pay them with farmer's money to tell you how great thou art.

But don't let facts get in the way of your Pro-CWB rant and delusions.

[chaffmeister]

OK Vader, I'll bite. (I see Bucket beat me to it, but I'll add to it anyway.)

I agree. As markets move higher, there is less and less volume traded. The buyers peter-out.

But don't forget. As markets move lower, there is less and less volume traded. The sellers peter-out. (I know, I know. You think farmers have little market power, but let me share with you an old market maxim: "Never sell a market that the farmer won't."

Anyway, the point is most of the volume does indeed happen - on average - in the mid range of prices (of course, every year's different). (I'd send you a chart if I could.)

Don't hang your hat on weighted averages because, as the CWB and you have stated, the CWB is "disciplined" and sells equally throughout the year - something a blind, one-armed monkey could do. The pool results would be roughly the simple average of the year. So then the CWB results SHOULD be pretty darn close to the average of the year. (And the CWB uses the US prices as a benchmark to determine the prices it sells.)

Conclusion - the average price in the US is indeed a relevant comparison.

[Fransisco]

Game set and match going to...Chaffmeister.