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.
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.
Comment