CWB premiums

[liberty]

Something that constantly amazes me about proponents of the CWB is how they go on about the premiums that the CWB supposedly gets for western Canadian wheat (Rod Flaman being the latest convert to this mantra). What they don't bother to clarify, however, is whether these premiums ever actually make it to the farm gate. I don't believe they do, and you don't need a 500 page study to prove it.

If the CWB was delivering the premiums it claims to be to the farm gate, then why aren't growers outside the designated area clamouring to get on board? In the case of Ontario wheat growers in particular, this wouldn't be all that difficult (just enlarge the designated area).

If the CWB is actually able to deliver premiums for high quality wheat grown in western Canada to the farm gate, then why would anyone from outside the designated area pass up this golden opportunity to essentially get a free lunch. The decision should be a no-brainer.

The very fact that Ontario wheat producers are moving to the exact opposite type of marketing system is a clear indication that they believe that either single-desk premiums don't exist, or if they do, the farmer never sees them.

[s24]

I agree with you. If the wheat board is doing such a good job why are they worried about competion. Look for example brown mustard this year: it was 18 cent a pound last spring now it is 45 cents per pound. Also what would have happened if thier was a good crop this year, the wheat board cannot move our wheat now and thier is less than 50% of the crop this year. It is time for a change. The wheat board was probablygood when we had horse and wagon but everything changes and they should to.

[winston]

In the case of mustard - if it was on the CWB they would not sell it at the highest price - instead they would hold back supplies for their best customers - like they did with milling wheat this year ( and in 1996 and 1988) - resulting in lower prices for us!

[almoy]

Winston, I was talking to an alfalfa producer the other day. I was kidding him about making a fortune on his hay this year. He replied that he did NOT sell for the highest price he could get as he has customers that buy from him every year. He sold to them at a reasonable price as he wants to keep them as the valued customer that they are.

The top price is not always the only consideration unless you want to look for new customers every year. Unlike some posters on this board I believe the CWB should be looking after our loyal customers.

[TOM4CWB]

Almoy;

The point you make is a very good one... if those selling are allowed to make the decision themselves... and a personal relationship can be built that actually enhances future business development.

However... this theology goes directly against CWB stated principal of the single desk monopoly... TO MAXIMISE MY RETURNS BY EXTRACTING THE MAXIMUM PREMIUM that a monopoly has power to extract.

It does not take a CWB to do business on the above stated principal, as in fact the "pooling" part of this unwritten contract is inherent over multiple years of doing business...

It works something like:

I will respect you when I sell to you (Not charge more than you can afford), and You will respect me and pay a reasonable price every year(SO I can afford to be in business next year).



I sure do not hear this from our CWB wheat and barley customers... infact I believe the opposite is the case.

In fact the CWB spends millions of dollars on P.R. that insults our customers every chance they get... Telling these people that the CWB is "extracting a premium" over what they could buy this grain for if the CWB Monopoly did not exist, every year.

Is it any wonder we get such poor prices sooner and longer than the US... simply because of our insulting and disgusting prairie war over the CWB Monopoly? Our customers don't even know if we will grow what they want next year... let alone in 5 years... as the CWB is publically stating that they are anticipating less and less production... out into the future!

Now, if I were a grain buyer looking for a stable long term supplier, is the CWB the type of entity I would really want to do business with?

1. It puts farmers in jail for giving a sack of wheat to a 4-H club.

2. It is always telling everyone it sells for the highest price.

3. It is continiously being hauled into both local and international courts by; farmers, other countries, and even Provincial governments... for unfair trading practices!

Not exactly the picture of a stable marketer with a long term future... is it?

[winston]

Almoy

Are you that naive to think that those customers give a hoot about your loyalty? High prices only come around once a decade and we must sell at the highest price possible! If you go bankrupt or are forced to quit farming do you think those customers are going to pass the hat for you because you were such a nice guy? I doubt it!

When prices go down again we will have lots of customers looking for cheap high quality wheat.

[Lifer]

In almoy's example the alfalfa producer sold to his own customer. I'm assuming this is one person to another. In this case what ever values each person holds comes into the deal.

The customers the CWB sees as needing to be loyal to may be different then those I as an individual wish to be loyal to.

I'd like to see more options to grow quality wheat for a specific market.

[ianben]

While you guys argue about your CWB look what has happened to production in Ukraine


Ukraine: Estimated Grain Production (1,000 Tonnes)
Wheat
98/99 14,937
99/00 13,585
00/01 10,197
01/02 21,300
02/03 21,000

Is this is a sustainable increase in yield due to better farming practices?Can you as individuals compete in world markets?
Does the CWB at least guarentee a sale if not a premium?

UK wheat prices are today dictated by Black sea wheat We may be free to sell as some of you may wish but is not a lot of help against competion who can produce at 15$US/tonne.

[Lifer]

Ianben,

I'm not clear on how the CWB can guarantee a sale?

They can not force a buyer to buy.

The increased low cost production of Ukraine and others in the future is a big concern of mine. I think we need to look at more ways to produce for markets closer to home. New uses for our grains with consumer focus and profitability for all.

[ianben]

Hi lifer

From the outside looking in the CWB would appear to give the buyer a guarentee on quality.
Canadian wheat is nearly a brand like Coke or Pepsi.
I am not saying the CWB is perfect but this fact must be a marketing advantage.

There is also a lot of complaints about cwb discounting to obtain sales or pre-selling when there is a shortage.

Can they ever win if one year you produce 8million tonnes and the next 22million.

The only way to market sensibly is to try to regulate supply with demand.

We all seem to have very irratic production a round the world could we not with a little international consultation and co-operation smooth out the peaks and troughs.

A better deal for farmers and a better sevice for our customers should be our aim dont you think?