The NFU mantra "If you don't like reality, create your own version of reality"

[AdamSmith]

Wrong conclusions about the Canadian Wheat Board
Editorial - Saturday, September 01, 2007 @ 07:00

Editor:

David Anderson's recent letter gives us new insight as to how he consistently comes to the wrong conclusions concerning the Canadian Wheat Board (CWB).

Anderson starts out by comparing spot barley prices from "early last year"(2006) to current prices today, with the unspoken theme being that the farmers/CWB should not have sold any barley "early last year" as prices were lower than today's prices.

Of course this is an easy statement to make now that we can look backwards on the price data and see that there were going to be price increases through 2006 and 2007.


In the real world though, farmers were selling barley, canola, peas, lentils, wheat, and corn over the past three years for the best prices they could get at any given time-even though those prices look low by today's standards.

And as barley prices had been flat right through 2004 and 2005, selling into a rising market in 2006 would look like a wise move at the time.

Anderson is now arguing that farmers/CWB should have known months or perhaps years in advance that barley prices would reach a five year high in June of 2007.

The Harper government's direct interference in CWB operations has quite likely made it impossible for the CWB to sell barley into the highest priced barley market (June/July 2007) that farmers have seen in the past five years.

This government move has cost farmers many millions of dollars and could have been averted if the Conservatives had been working with farmers instead of against them.

Anderson was wrong to support the illegal Cabinet Order recently struck down by the federal court judge.

And now Anderson is wrong to pretend that he can predict the markets 18 months in advance.

Why won't Anderson just represent his farmer constituents on the CWB issue?

Yours truly,

Stewart Wells

President, National Farmers Union

[chaffmeister]

Some relevant questions regarding the CWB sales early in the year:

1......When exactly were these "early" sales made?
2......How much does the CWB usually sell that early? Was this amount (reportedly 700,000 t) unusually large? (I'm told it was unprecedented.)
3......Who did they sell to? (Reportedly to the domestic maltsters. If so, this represents over half their annual needs. Also, its appearing that these sales were not just for the domestic brewers as many had thought earlier, but for offshore sales of malt as well.)
4......If - as it seems to be - these were unusually large volumes to sell that early and to offshore interests (which are usually left till later when the crop is "known") the big question is <b>WHY?</b>

Why did the CWB act so unusually different (in a marketing sense) last fall?

You'll note that not one question is about price. Price is not the issue. From where I sit, the questions would still need to be asked even if the prices It seems to me that if the CWB acted "normally" - as it has every other year before this one, they would not have sold this much this early and wouldn't be snookered like they are right now.

So, WHY? Why did the CWB step out of its routine selling pattern? Was it political? Was it strategic relative to the government's actions? What was it?

Stewart Wells says that Anderson had an "unspoken theme" in his letter that "farmers/CWB should not have sold any barley "early last year"". From where I sit, Anderson's view is terribly valid - especially when you consider the unusual approach of the CWB.

If it was based on anything but sound marketing, heads should roll. And I don't mean Bob Cuthbert (the barley salesman, who I figure was just doing what he was told to do) - I'm thinking more like senior management and the BOD.