Bakers Lobby Against High Wheat Prices....

[Vader]

Francisco,

No the midseason PRO is not a hard number. It is also not a guess. At this point in the marketing year the PRO's on durum could almost be said to be cast in stone due to the accelerated efforts of the CWB to lock in sales at these high values. You will no doubt have noted the effort the CWB is putting into encouraging farmers to deliver their crop early. The ability of the CWB to lock in these values is in direct correlation to producer deliveries. When new crop begins to look like an option to buyers they will no longer be interested paying these high values.

Producers are making vigorous attempts to deliver their grain into the system and help the CWB to lock in these attractive values.

The CWB is probably not sold to the same extent on spring wheat as it is on durum and it will be a challenge to sell the balance of the crop at these values. I am sure the CWB is taking this challenge seriously and have factored their anticipated success into the PRO calculation.

So, the PRO values are not cast in stone but they are very legitimate and the CWB is making every effort to enhance farmers cash flow by putting forward frequent requests to the Federal Government for adjustment payments.

[Fransisco]

Okay Rod lets have a look at what you got here. You want us to compare the PRO with the weighted average prices in North Dakota.

1. Can you provide us with a link to this USDA data that you are referring too?

2. And a link to an explanation of how the weighted average calculation is done?

I found the national numbers but have yet to find the North Dakota data set. As far as I can tell from the national data set it is based for sales on all classes and grades of wheat combined. It doesn't look like they separate out 1's, 2's, 3's and the various protein levels.

If that is indeed the case which CWB class and grade do you propose we compare too? I would suggest it would have to be all of them to be a fair comparison.

[TOM4CWB]

Vader,

How about apples to apples for a change...


CWB Fixed Price Contract prices during the exact same time period as North Dakota growers NUMBERS you choose to compare.

Lets just see how much the CWB basis sucked out of 'designated area' wheat growers!

Try to be fair for a second... and respect the grower that must put up with the insults you hurl... try to be honest...!

[liberty]

On the issue of what Vader calls "average weighted wheat prices" I can only speculate as to what he exactly means by this as he seems unwilling to be precise.

I suspect that the CWB has some stock formula whereby they estimate the volume of wheat ND growers sell at any given time and at what price. They assume that the largest volume of grain is sold at the midpoint of a price upswing, and that the smallest volumes are sold at the beginning and the end of the upswing. This in itself is not such an unusual assumption, but what role does "weighting" play here?

I suspect that the CWB uses an estimate of these volume and pricing patterns because, as Fransisco points out, the data which might confirm this doesn't seem readily available. If the CWB has access to data that most growers don't, then I would assume Vader would have unequivocally pointed to it, instead of ignoring the question.

I can only speculate that the CWB likely uses a formula which skews the data in such a way as to make it appear that ND growers are always at a disadvantage vis a vis the single desk.

Dairy Farmers of Canada use a similar technique when they compare dairy prices in Canada with those in the United States. However, DFC will only release the results of their surveys, and not the core data. It's quite likely that the core data is "weighted" to result in a price advantage for Canadian consumers, when anecdotal evidence clearly points to the opposite.

The "weighting" part wouldn't be hard to do. If you're collecting data for an average price, just assume that consumers would buy a whole lot more of the few Canadian dairy products that are actually cheaper at the retail level (i.e. milk, which is often used as a loss leader) and much less of more expensive products like cheese. It doesn't matter whether consumer buying patterns actually reflect this "weighting", because presto! you've suddenly got cheaper dairy products in Canada which suits the agenda of the Supply Mismanagement crowd.

The CWB might be doing something similar with wheat. They might make some assumptions about the selling patterns of ND growers that exaggerate sales volumes at lower prices, and bingo! the single desk has an advantage. It doesn't matter whether actual selling patterns of ND growers reflect this "weighting"; what matters is that the published conclusion supports the single desk argument. Any valid questions concerning the core data of these surveys are then met with nothing but stony silence.

[TOM4CWB]

Liberty,

The CWB as the exact data for FPC sales they themselves do. In fact in a years time... it will be published by the CWB in the next Financials.

If the bakers had any common sense... they would stop supporting the CWB... and instead should have asked for access to the way over 3.5mmt of CWB 'reserve' grain... that we ('designated area' slaves) were forced to hold during the highest prices in history.

[TOM4CWB]

The CRIME OF THE CENTURY... just occured... and Vader is grinning all the way to the bank/pool/contingency fund... depending which pocket he uses!

[tower]

The crime of the century!!!! I guess it has been a pretty mild first decade in your part of the world Tom4cwb.

getting back to the original post about US bakers begging for relief from the highest prices of the century!!! and to our Honourable Agriculture Minister Ritz trying to figure out how to get the same kind of relief to feeders, I was wondering how our cwb directors feel about the mandate within the Board Act recognizing the importance to secondary processors et al and the boards need to accomodate them.

How far should that go to the expense of farmers? Is there a process by which the permit book holders can have a vote to determine our willingness to put grain farmers needs as the only priority of our board? Have there been arguments made concerning those same grain users as are complaining in the states having the same right to approach the Canadian government for relief?

[TOM4CWB]

Tower,

How likely do you think it would have been... for MGE March 08 wheat... to have been squeezed to $25/bu... if individual CDN 'designated area' growers had been allowed access to that market?

No WAY it would have happened.

5mmt of Canadian supply of high quality milling wheat would have cut what $8/bu off the top?

And what would have been so bad about that?

New Crop would not likely have changed much in Dec... just major grief and pain would have been avoided... in many grain futures... if the CWB distortion had been cut.

Now if we have anywhere near normal weather... the allure of $25/bu wheat... is in every growers mind... right around the globe.

And who will pay... Tower... when the CWB complains again... that their is too much wheat... and that is why they (the CWB) can't get a decent price.

The 'designated area' grower will pay... as our wheat sits in the bin... and consumers switch to other edible products... Demand drops... and we on our farm loose 100's of thousands... to keep the CWB and big millers happy!