Greg Arason's presentation to the House of Commons Ag. Committee

[Fransisco]

If your talking commodities meaning all commodities then its closer to 19% according to the OECD.

http://www.oecd.org/document/54/0,2340,en_2649_34231_35009718_1_1_1_1,00.html

[chaffmeister]

bsigg:

You said:
In the U.S., 60% of the commodity prices are paid in government subsidizes.

The CWB says:
In 2000, American wheat producers received 49 per cent of their income from subsidies.

http://www.cwb.ca/public/en/about/myths/


Thought you'd like to know.

[chaffmeister]

Agstar77:

To answer your question, if the CWB sold on a basis contract it would force the buyer to cover its flat price exposure in the futures market – if they want flat price coverage – because they wouldn’t be getting it from the CWB. That buying by the CWB customer would then hit (support) the market (which is a good thing). (There’s your “positive message to the markets”.)

If the CWB also had a policy to price these contracts only in an orderly fashion – that is, as the grain gets shipped throughout the shipping period – then it would be providing the pool with true averaging over time. (I’m not suggesting this is what should be done – but it is what the CWB says is done, even though in reality it isn’t.)

Think about it – if the CWB was doing this now, it would be getting current prices even on sales made much earlier in the price rally.

Seems there’s much about the market and marketing that is unfamiliar to the CWB. If you like, I am more than happy to come and give some open-market training to the CWB staff and BOD – could prove useful in a “dual market”.

[rodb]

The thing that Mr. Arason did not elaborate on is that the CWB doesn't send out marketing information that would prevent an over abundance of #1 Red 13.5 from being produced and having to be discounted to move significant volumes and keep all the single deskers happy with a 80% call and just getting to deliver wheat 9 months after you planted it.

It is a good thing that the CWB is not marketing Canola or we would be at half the acreage and storing 1.5 years crop on farm. wouldn't that be fun?

[chaffmeister]

Agstar:

Here's another shot at it:

<i>Perhaps I should have said, how would you suggest the CWB sell into the U.S. market so that prices rally ?</i>
First, if you think you’re a grain company, act like one. When a buyer comes in for large amounts, sell on a basis only. Why would you take on the flat price risk of a large sale – why would you expect farmers to? (This is Tom4CWB’s issue.) The CWB always says it sells throughout the year so as to get a good average. What that means is that it should price only when it’s being shipped. If shipments are made evenly throughout the year, so should the pricing. (You wouldn’t get caught selling too much too early – like this year.)

<i>Don't you think other sellers know when Millers are dealing with CWB? </i>
Nope. When someone wants to take advantage of the CWB system to get coverage quickly and without making a ripple on the market, you can be certain that they don’t advertise it.

<i>They obviously know the amounts that the Mills require. Are they that stupid? </i>
Yes, they probably know what each mill needs. But as I said, the mills don’t advertise their activities nor their coverage.

<i>I have listened to a Cargill rep say they like the consistency of product they get from the CWB and are willing but cautious in paying extra for this consistency. </i>
I have listened to reps say they like buying from the CWB because they can cover large amounts of their demand without lifting the market.</i>

<i>This should raise the price U.S. farmers get if they could get their act together. U.S. farm groups envy our system and wish to destroy it.</i>
US farm groups feel the CWB is selling below the “market”. Don’t think “envy”is the word they use.
If the CWB becomes voluntary, why not get extra market clout by inviting members of the US farm groups to market through the CWB?

[chaffmeister]

This is bazarre. This is the second time a posting of mine has gone in twice - hours apart.

Perhaps the CWB is bugging my computer!

[parsley]

BRING the wine. Don't drink all the wine.

Parsley