Free wheat area of Canada

[TOM4CWB]

Boone: I don't think the CWB would need a vote from us dumb farmers to allow them to sell canola to the world in a marketing choice environment. I challenge them to do it now. I want the choice to pool my canola sales with the CWB or go to the open market. There's nothing in law that says they can't market canola.

Boone with all of your hard to read rambling, you have finally come up with a test market of sorts. Lets go for it.

[charliep]

Tom4cwb

You indicate the CWB can/does lower basis. Just looking for further explanation.

Basis is the relationship between two prices (normally futures and a cash price). It can only be done on an individual sales basis by knowing actual values for each CWB sales. This information is not available to anyone outside the CWB.

There are lots of other factors that are included in CWB pooled prices that are never asked about.

1) Spreads between classes, grades and proteins as assigned by the CWB.

2) Freight adjustment factor.

3) Timing of sales.

4) CWB decisions to hold back on sales to protect prices. Case in point this year is durum in southern Alberta.

[TOM4CWB]

Charlie;

With CWB pooling, it is VERY hard to track the basis... as the deemed spreads between the grades fog up all transparent market signals from getting back to my farm.

The pool basis I wrote about was on the non-CWB pools we have participated in.

The CWB explanation of setting the spreads and averaging the prices does not reflect true market conditions... IMHO and from what I have seen by disecting CWB prices through PPO indicators.

THe CWB has argued strongly that at no point... for instance, that a 3CWRS should ever be worth more than a 2CWRS because of a sales timing issue... I disagree.

There are many different factors besides timing like protein premium spread changes... narrowing of the basis, strong demand with willing "designated area" suppliers who fill that demand in one grade but not another..., which should determine a transparent price that is based on market reality rather than formula pricing as is the case with the CWB today.

Feed wheat and feed barley are perfect examples of CWB inability to respond to true market signals... for the CWB to maintain not only the formula pricing... but also the CWB monopoly itself... through the pool system.

I need the opportunity to contract with, and supply a end user, without the CWB pool getting in the middle of our contract.

Obviously the CWB pooling system is a means to an end... yet the CWB has made the pool so important that it has become a hinderance to our value added industries and farms equally.

THe CWB is working internally on pool pricing systems... because we have proven that timing on when grain is priced... can be as important... or many times more important... than selling when the "basis" is "narrow".

THe CWB pooling operations that were carried out 10 years ago are so different (from what I have been told) from what happened in pool sales for the last 2 years for instance... that we are really not dealing with a year long pooled sales program any more.

I brought this up at the CWB accountability meeting in Stettler last year... and was told in essence that the CWB were superstar marketers... and to just trust their decisions.


What is so sick... is that if the CWB were getting such a good basis... which may well have been possible...

The CWB has failed to pass this good basis on through the PPO options... and simply extort money (a $40 added basis) from those who were concerned about CWB skill on the timing issue... so that the Pool remains the only viable tool to sell through the CWB!

I hope this will change soon Charlie... and "Marketing Choice" in Alberta is bringing real pressure on the CWB to become accountable in these areas... my hat is off to your hard work in bringing these issues forward and exposing CWB marketing weaknesses!

[Everest]

It seems to me that strong CWB monopoly supporters are usually very fond of vilifying grain companies, railways, suppliers, and anyone else that farmers do business with, for being hard nosed, without the benefit of farmers upper most in their minds. The CWB, in its defense of itself and the single desk system, is fond of saying that the benefits they allegedly bring to farmers would transfer to the multinational grain companie if we had an open market for wheat and barley.

Can one of you tell me then, why the majority of millers and maltsters so love the CWB system, and don't want an open market? Most of them are multinationals. All of them are driven by shareholder greed. Shouldn't they be held to the same account as railways, elevator companies, and seed companies, etc.?

Could the fact the US wheat producers in North Dakota and Montana consistently net on an annual basis 50 cents to a Dollar per bushel Cdn more than Canadian farmers (USDA and CWB data…..not mine) color the position of these buyers? If the CWB, as it says “extracts a premium” from the marketplace as a result of the single desk, of what interest would it be for the shareholders and management of milling and malting companies to want to preserve the CWB’s single desk system?

Isn’t the answer to ‘follow the money’?

[Everest]

Henbent, Boone and Wilgro: I hope you are still around and have read the last three post on this thread by Charliep. Tom4cwb and Everest. There is a lot of answers and truths in what they say about marketing with the CWB.

I think it is time that the CWB was given the truth test(marketing choice).

[henbent]

kernel, Hooray, you now have one vote that can be counted on to support a rebel position! We will all be saved, now that you've convinced yourself that you were right. Now if you can only remember how/where/when to vote next time, you may cause a landslide in you own mind.

[boone]

Everest, if you knew the total actual price the millers in Canada are paying farmers you may take a different position. Don't use the posted CWB prices,find out the maximum milldoor premiums, then calculate between U.S. and here, you might be surprised.

[TOM4CWB]

Boone;

What good does this "Extraction" from our value add industry do anyway?

All the CWB does is turn around and "Price Discriminate" into US, and other offshore markets... and we see no real benefit from these sales anyway.

So instead of "value adding" and creating more further processed products...

because the CWB is extracting a ransom from our domestic industry, (Except from the multi-nationals who are powerful enough that they can easily manipulate the CWB)

we loose out on building a stronger domestic processing industry of competitive consumer products.


FREE WHEAT IN THE WEST,

Then we can build a stronger local community... by efficiently using our lower grade wheat products, which the CWB steals from farmers, and gives away to offshore countries at give away prices every day.

My Canada Feed wheat... is top quality milling wheat in many countries today, and yet the CWB asks over $70/t extra buy-back over my #1CWRS... which the CWB will subsidise if I choose to sell through the buy-back system.

FREE WHEAT IN THE WEST, WW2 ended in 1945... it is time it is finally ended in the "designated area" of Canada!

[boone]

Tom4cwb, from what my research shows, Canadian millers are expanding big time. No Kidding, what ever the cwb is doing must be right for someone, check out total increases in last five years at Robin Hood in Saskatoon, ADM in Calgary, Rogers in Armstong B.C. it may not let any small players in with these rules, but in total tonnes our flour growth is on a tear. So look for yourself. Milling/Baking News. I do agree about the loss of potential for visually inferior wheat. That is an issue with CGC as much as CWB.

[TOM4CWB]

Boone;

The CWRS that I have, that graded Canada Feed, I have no doubt would grade a DNS #1 US wheat.

This is not the first time this has happened either!

The grade is not the issue however... the price paid by the CWB, is...

When I must pay the CWB $90/t to get this wheat free... and on my CWRS 15.5 the CWB charges nothing... there is a huge problem.

Many millers that can get our high quality CPS are making good high performance flour now... but we farmers are not being paid for the higher quality!

The point on the expansions was exactly what I said, multi-national companies can create the illusion of pricing... to the point where they can call the bluff on the CWB... and ship in at a cost that the CWB cannot dispute... yet causes the CWB to lower the price paid by these folks...

This is the exact reason why the CWB is so appreciated by these multi-national millers... and is the reason they defend the CWB to the bitter end... as well as the added incentive to be put on the CWB's "good books" for PR... which means good deals... another reason for the big expansions.

CWB Market share in the North American HRS percentage penetration increases because of value the "designated area" farmer created... not because the CWB has a monopoly and is extracting a premium price!