US imposes Tariff on Canadian Wheat

[TOM4CWB]

Charlie and Rain;

I know that #1CWRS was shipped to the USA as #2CWRS... or the grain companies did not get US shipping orders from the CWB... take a look at the huge increase in shipping of #2CWRS last crop year to the USA!

THIS WAS NOT AN AcCIDENT... there was a VERY high percentage of #1CWRS grown last year... but "just by accident" the CWB ships a majority of CWRS to the US... supposedly one of our best markets... as #2CWRS! I have some more ocean front property in Alberta I can sell you!

In general we have had a reasonable relationship with the USA on grain trade... EXCEPT with CWB grains!

Shouldn't this tell us something?

[rain]

Tom grade means nothing when it comes down to it. We sold wheat that had to meet a minumum requirement. It is like selling barley that has to be min 48 lbs. You ship 52 lbs. In most instances you only get the minimum requirement price.

This is not a CWB problem, the CWB is just part of the reason the US is using to justify there action.

If the CWB was gone tomorrow the tarrif would stay.

You need to get around this idea it is a CWB thing. This is an American thing.

Pure and simple

[TOM4CWB]

RAIN;

GRADE means evaluation of the grain itself... and is the basis of CWB existance...

GRADE is the physical properties of our grain, for the purpose of CDN Trade and Commerce LAW ... and according to CDN trade and commerce BNA Act 91 obligations... it must be graded, and graded officially and properly... to even come into and under the authority of the CGC and CGC.

THE CWB forced Canadian grain companies to break the Canada Grain Act... in order to get shipping tenders into the USA... and for that alone... the CWB should have a tariff applied against anything it handles!

[TOM4CWB]

I said "it must be graded, and graded officially and properly... to even come into and under the authority of the CGC and CGC." should have been CGC and CWB.

THE Canada Grain Act requires by law, that a proper grade be applied to all grain.... no matter what the spec is...

If a customer wants #1CWRS quality... they must receive a #1... otherwise the producer protection purposes... and whole integrety of both the CG Act and CWB Act are compromised.

[TOM4CWB]

Tom - I disagree with your statement
"... there was a VERY high percentage of #1CWRS grown last year... "

Dr. Tierney from KSU graphed the SK. wheat grades - it is available at the link below:

http://webercommodities.com/index.cfm?show=10&mid=53

On September 21, 13% was estimated to b #1CWRS in Saskatchewan and it got worse in October, Novemeber and December.

[TOM4CWB]

Rain: I will try to explain my thoughts of the problems with the CWB. Its hard to put into words how I think the process interferes with trade but here goes.

There is no doubt in my mind that the CWB gets a premium for #1 & #2 hrs wheat and durum but the premium is lost before it gets to the farm gate. Lower qualities have one good market and that is a domestic processors. The rest of the lower qualities of wheat are dumped into the international market for what ever the traffic will bare. Now we have lower grades being subsidize by high grades in the pool account causing over production of a product that has no real valuie in the international market place, to much competition. Without a transparent open market pricing system the hidden subsidity continues to encourage farmers to keep producing a product at worst than average prices.

Now on an open market, the price discripences on qualities of grain show up right away. This forces the producer a great oppertunity to risk manage his options into a different crop. If you farm in an area where your chances are limited in producing #1 & #2 wheat you should beable to recognize that an diversify into something that pays more. This would make risk management in the market easier and more profitable.

The CWB is export prone. The open market would definetly encourage more valued added here in Canada particularly in high quality wheat and barley. As our industry has trouble sourcing these products from the CWB.

Rain if I'am away out in left field here please comment to clarify my thoughts.

[rain]

Tom the CWB is not the boogie man hiding behind every tree.

This is a US policy problem. Not a CWB problem.

But for the sake of arguement Tom. What if I am right. In your mind what are the ramifications for all of Western Canada if this is a major change in US trade policy. Pretend there is no CWB. Just this time.

[TOM4CWB]

Rain;

Here are the numbers for the last 4 crop years;

Crop year #1CWRS #2CWRS and lower mil bu.

2001-2002… 18.7mil.bu …30.1mil bu.

2000-2001… 9.4mil bu….37.1mil. bu.

1999-2000…14.2mil.bu….37.1mil. bu.

1998-1999…23.2mil.bu… 19.3mil.bu


The trend is clear… especially on an extremely high quality CWRS year like last year…
From over 54% #1 in 98-99… to about 20% in 2000-01

Kind of strange why we would be sending all this low quality wheat… to our principal premium market, isn’t it?


LarryWebber... the last crop in my mind was 2001... the present crop is the one we are selling now, the 2002 harvest.

[TOM4CWB]

Rain;

I suppose if a major policy shift was occuring... to prevent grain, cattle, hogs, and all other feeds into the US... Alberta needs to become the 51st state... cause we sure can't win in the political system we are in now!

Some "value added" food products are possible... however this is another industry altogether... at least as cutthroat as the one we are in now...

The final alternative is to make biofuel or electric power from our plants... the US won't turn secure energy supplies away!

[eatmorewheat]

Perhaps we should seriously look at processing more wheat at home and exporting more processed products south. First thing to do however is to make the CWB VOLUNTARY!

Why?

- we don't need mother gov't to peddle our wheat for us
- we have a modern milling industry
- we have a modern baking industry
- we have a modern petfood industry

There are no tariffs on flour, breakfast cereal and baked goods.

I realize the US could apply tariffs on all of the above, but if they do then we are all in the dumper.

Free wheat in the west.