No Discrimination in "Buy Back" System

[charliep]

Maybe all farmers should have the opportunity of no cost export licenses for marketing their own grain on either on individual truck basis or containers (similar Australia).

I reread page 43 of the annual report again to note the targeted benefit and the actual results in the CWB performance - not any of the dollars that vader is talking about and still subject to question about process. Malt barley benefit of $13.45/tonne when payments were under both CWB and domestic feed markets is still a mystery.

I then looked specifically at the asterick/footnote and what is specifically referred to. The CWB had planned on making $65 mln from what is called "Contribution from other revenue sources" and they actually lost $48.7 mln. I assume this is over and above the losses on the producer pricing options. Is in the annual report so I assume is important. How does this relate to the single desk benefit that is discussed and the CWB risk management strategy?

[FarmRanger]

Pulse plant A, B, and C have to compete with each other, anyone consistently offering a lower price won't get supply. The CWB has no such restrictions.

Thanks for that response Charlie, (glad to have you back). Unfortunately for most of us who couldn't get the DPC, we are stuck in the pool which can't even get the simple average price.

If we all had free access to a daily price contract through the CWB, it would be very easy to compare that price to the free market just to the south of us. Any price premium/discount would become instantly apparant if it couldn't be hidden in a year long pooled price.

[charliep]

Will note the US average price process. Farmers can compare this to what the CWB has done in the past using average returns from the annual report.

See table 18, 19 and 20.
http://www.cwb.ca/public/en/farmers/producer/historical/pdf/2007-08/0708dpccharts.pdf

A couple of footnotes to these tables/making the comparison.

The US crop year is June to May and weighted average/simple average prices (you have to read the footnotes) are based on this. The Canadian crop year is August to July and the CWB is October to September in most years. You would have to take out the June to September period begginning of the US crop year and bring in the June to Sept period of the next crop year to be comparable.

You also have to adjust for the US greenback/loonie - the loonie hasn't always been on par with the US.

[Vader]

Ahhh yes. The "simple" average price.

So on 15 million tonnes of wheat, to get the "simple" average price the CWB would have to market just 1,510,027 bushels per day, including weekends and holidays. Slightly more if people take time off for Christmas and Easter etc. Now no matter what the price over the last year whether it was $5.00 or $25.00 per bushel you have to find those buyers willing to buy your "simple" average daily amount of grain.

No problem in a "simple" world that some people live in............

[charliep]

Should be CWB pooling year is October to September. Sorry.

[charliep]

Interesting. As a simple guy (who does read footnotes and observes that table 18 is a weighted average based on marketings), you can perhaps help me understand both the CWB risk management strategy and how they measure performance of sales activities.

My understanding is the CWB has an assumed marketing pace based on their sales plan. If the actual pace of sales falls behind or gets ahead of the actual pace, the CWB uses futures to manage this risk. Is this accurate?

On the pricing side, the CWB benefit is based a sales department comparison of their actual prices to outside competitior ones. The BofD does not have an outside source to verify these numbers.

Do I have a correct understanding?

[TOM4CWB]

Charlie,

The CWB has told us that they are not going to do the DPC, in the 08-09 crop year; as it was too risky for them to deal with.

[SASKFARMER3]

Mustard sauce you really don't no much about marketing.
If you grow 12 Non CWB crops and points A B C are all the same you must be in a Bubble some where in Saskatchewan. Because in our area A B and C are always different then their is the Crushers in ND Loyd and Harrowby plus Clavet. All different. HM must be the same Cone of silence all CWB supporters live in.
Peas as a example we have three different locations within a 70 km area all have different prices and when I give my tons the price also changes if they want it they pay.

[grassfarmer]

Excellent comments mustardman "If you think you are Marketing Yourself when you sell your lentils to Pulse plant A, B or C , You are sadly mistaken.
By the way A, B or C are all the same price,funny how that happens."

Farmranger, your reply indicates you are under a false understanding of how the free market system works. " Pulse plant A, B, and C have to compete with each other, anyone consistently offering a lower price won't get supply..." They do not have to compete with each other if there are only three companies (or two as in the case of beef) price collusion is alive and well.

Vader's original post also contained a point very relevant to the beef sector - "..If those people actually think that as individuals that they are part of "the industry", they have a serious identity crisis." How well this applies to the leadership of beef commodity groups like ABP/CCA who continually preach that what is good for the foreign owned packing plants is good for the "industry" - unfortunately as you say producers are not part of that industry.

[Fransisco]

The prices used for the simple average calculation (as anyone can verify from the link I provided above but which Vader obviously did not)did not include weekends and holidays.

The prices were real, you could find in the range of 300 elevators on each and every one of those working days who would give farmers that price.

One wouldn't have to sell every day, but using regular intervals should net you an "average" price if that's what sets your heart aflutter. You can also use the futures markets to sell every day but that probably crosses the line from being too simple to being too sophisticated for the board crowd.

A basic working definition of premium is above average. It has been demonstrated time and again Rod that you deliver below average returns to farmers. You seem to think you are in some noble way helping them by doing so. Here's a newsflash, you're not.

And someone who doesn't seem to be able to comprehend that competition works the same on <b>both</b> buyers and sellers shouldn't be going around talking about how 'simple' other folks are.