CWB CONSIDERS ON- FARM PAYMENTS

[boone]

In the late '70s we travelled to cwb meetings to bury a concept called MAP it was going to pay farmers for grain unmarketed. The only problem was they were going to take the costs out of general pool. So the guy at Frontier, and Walsh, with a totally marketed 25bu. crop were carrying the cost of ownership of Tisdales, Wadenas, and Valleyviews 60bu. crop and carryover. If the money came directly from another source it would be bad enough, as we build surplus against price discovery. Let's not get ourselves into any pickles here.

[danm]

The CWB will do anything stupid because no one there is financially responsible. The risk and the mistakes transfer back to the farmer. Grain will go missing on a frequent bases making for a huge cost to DA farmers.

Under the marketing choice system every farmer is not paying for the mistakes I make in marketing my grain.

[TOM4CWB]

Boone;

This sounds like shades of the early 1930's... speculation...

If a farmer wants to speculate with grain in the bin, fine... but let it be with his own grain in his own bin, that I am not forced to own on anyone's behalf.

The On Farm Payments are meant to cut out the elevators and grain handlers... and to create the CWB ability to offer credit and broker feed barley to domestic livestock producers...

AS long as this grain has a specified cash purchase price... fine. But if the CWB can buy barley at 50% of Fair Market Value, then the CWB will colapse our feed grain prices...

Cash Pricing along with pooling by the CWB throughout the crop year, could work... if done with accountable commercial contracts.

[boone]

Tom4cwb; Yes I agree with your last statement. As long as it is forward priced good or bad and the cost of carry is extracted as part of the exposed basis, I may be able to live with it. However if it is a hodge podge of tonnage and values that is lumped in with the pooled grain I know where the carry will come from, and I know whose grain will be carried. It is great to have inventory, but the customer should carry the cost upfront. Has the skihills of grain in Europe taught us nothing about being beat over the head with your own carryover.

[henbent]

boone, Wouldn't the CWB just administer it like an advance? What would be the harm, you got the grain, you get your money, if you want/need it!

[boone]

Henbent; I believe the commisioner of cwb at the time was Charlie Gibbons (great ag person) I may be wrong, the
suggestion at the time was based on MAP which was money from general revenues. What will be prescribed this time I have no idea. I'm just saying I believe for the most part in pooled selling. When they shuffled money from pool to pool years ago I could have kicked them square in the pants. In 1986 they encouraged us to dry grain, and encouraged our friends and neighbours to have us dry grain. Then they came along and gave no benefit to the people that made it possible to pencil dry alot of other grain. I was steamed but I weigh every situation accordingly. The CWB is not without stupidity in the past and maybe today and tommorrow. I'm just saying I will be relieved of it when it is a zero sum game. Not when the Excited States, Western Canadian Wheat Growers, or any other knee jerk (no offense here Kernel) action plans to do so. I will fight for the right to have them prove themselves to me of their total redundance.

[henbent]

boone, At one time the CWB, was a pretty closed outfit and arrogant, however recent unrest, audits, farm directors, have made it somewhat more tranparent. On the other hand grain companies have always amazed me the way they have treated farmers in the past. On many occassions they required farmers to do things prior to delivery and blamed it on the CWB. Drying cleaning etc. I recall once attempting to fill out a GPO on some barley and was told naw you are asking too much, they would even get off their duffs to punch a computer button (Manager & 2nd man) another farmer at the counter agreed with them, said I was asking to much. 2 Months later I sold the barley for more than my asking price on the open market. My point is that they toy with people, playing God in a sense. Now there are guys saying we should trust these companies since we are all in this together, they depend on us. Well I have never seen it in their attitude to date. We've had to suck up to them cap in hand for years!! I feel like I'm going to the bank rather than to sell grain. I bet now with fewer elevators it'll get worse. The big rail guys are the worst scum of all in my opinion. Load 100 cars in 8 hours, then watch a train roar right by the siding and not pick the cars up for 3 - 4 days. Now that's the way to run an efficient business. Go figure

[henbent]

Henbent: There is hope for you and me to agree on somethings here. The big rail road is our #1 problem in Western Canada. The government develops a lot of regulations freight rates, CWB policy and the theory of all bulk raw commodites must be exported so the railways will profit from the traffic. If the market was freed up more valued add would happen on raw bulk and it would be moved by truck. The whole system is controlled by gov. and CWB to keep the railroad profitable without due thought to transfering of wealth from west to east and to other parts of the world. This is the biggest reason I think marketing choice should be allow to happen. More competition must be allow to happen on the rails. Freight rates have to be discovered in a more open way. Wouldn't it be different if the railways were bidding to haul our grain. Tendering is a every bad policy that has been developed by the CWB. It will cause less competition in the end because it will break some of our present grain handling systems.

Everyone laughs at my GPO's too Henbent but I cash 75% of them. Grain buyers believe they have a monopoly on wisdom when it comes to marketing. Let them laugh henbent, marketing is a job that requires alot of information and a fly by the ass of your pants attitude.

GPO'S in my estimation is best way to market for a producer. You are asking for a price not taking one. You can take a price any old time. If enought producers marketed this way it could also help the markets up. Anyone can give their grain away it takes alittle more thought to profit from it.

[henbent]

kernel, Either you are mellowing or I am becoming more militant by the hour. Something strange is at work here in cyber space!

[boone]

henbent,kernel; it scares me and also does my heart good to see this working consensus building. Kernel I want to clarify one issue here, the tendering was forced upon the CWB by a industry focus group, set up by stakeholders. They were obligated to enacted it in stages. Please check the record and I'll stand to be corrected. Thanks

[ianben]

This thread might be getting us all somewhere
Pricing must be the answer no matter who we market our grain through.
Knowing our own and each others cost of production must be our priority.
Then selling when we all can make a reasonable profit and supply the quality and quantities our customers desire.
There are lots of farmer myths and misunderstanding floating around about the folk we deal with.
However marketing choice does allow the customer to choose.
When we are the customer we demand this right!
We expect delivery on time of exactly what we order at the agreed price whch is usually at least suggested by the seller.
Instead of moaning and blaming others why dont farmers think our customers deserve this right.
Crop insurance, risk management futures options can be replaced by guarrenteed supply at a premium price.

High yeilds and empty bins by informed pricing and stock replacment. Droughts and poor quality riden with the stock in hand which we now give away in the good years.

Our problem is not CWB, grain merchants,
railways, hauliers, chem suppliers not even governments and subsidies but our refusal to at least suggest a retail price.

This is my main worry with CWB they act like an great big farmer trading unpriced grain with no reference to cost of production that I can see.

Is this not true?

[ianben]

Boone: Tendering seemed to be forced on to grainco by the CWB in the final days. But I also stand to be corrected on where the idea arose from. But for sure it is bad for the grain industry. I would like to see more competition for transportation. This way maybe rail would have to tender for the frieght. Then with marketing choice alot more raw commodity could be turned into value added products.I know most value added hates dealing with the CWB but they won't admit it in public for fear of being cut off of raw product.

[TOM4CWB]

Kernel and Boone;

You both are sort of right, but mostly wrong about tendering.

Minister Goodale told the CWB what is had to do on tendering... and a wackey CWB application of Goodale reading the riot act to the CWB... created what we have today.

[TOM4CWB]

It came from the biggest stakeholder on grain movement the Canadian Gov..
The railroad is railroading the whole country.

[poorboy]

Carefull what you wish for on giving the railways open rights to bid on moving your grain. There are only 2 companies involved an no one says that the tenders would involve price reductions go get your business. Look at gas stations, they offer convenience stores, give away items, free car washes, etc. to get you to choose them, but they seldom fight on gas price. Heck, most of them hope the other guys raise there price so they can raise the price too.

You might see the railways telling the grain companies that they will offer prompter service, etc and actually raise the freight rates.

Most US states pay more for rail freight than we do. The only reason they can sell it cheaply at the coast is that the US government built a lot of cheap terminals at the ports and the costs are extremely low, which helps to offset there higher rail freight. Did you know that it cost more to freight grain from Montana to Seattle than it does from North Dakota to Seattle!