Parsley, Parsley, Parsley. The buy back as it is referred to, is not discriminatory, although the CWB does engage in what is referred to as price discrimination to its customers.
The objective of the CWB is to prevent you and me from competing with each other and driving down the price. Licenses are granted when that criterion is met and there is no charge for that license.
The buyback is in fact two distinct transactions. The first transaction is simple. The farmer sells his grain to the CWB through the various options provided. All producers who sell through the CWB are treated similarly. Many producers have been encouraged by the numerous producer pricing options being offered and these offerings continue to expand and evolve.
The second transaction is where the individual buys grain from the CWB. This appears complicated but is in fact the same process any customer of the CWB would be exposed to. Anyone can purchase grain from the CWB, including producers of that grain. However, it is rare for a customer of the CWB to buy grain on spec in order to compete for sales with the CWB as is typically the case for individual producers contemplating a buyback. This is quite apparent to anyone purchasing grain from the CWB since those transactions typically represent premium values. For this reason the majority of sales by the CWB are to end users.
These two simple transactions which happen thousands of times per day, and when they are matched up through a single individual can be deemed to be the "buyback".
I will say again, there is no discrimination in the buyback. All producers have the same options available to them to sell through the CWB. Any customer can buy grain from the CWB. Having said that, there is a system in place which prices grain based on the country where the grain will be delivered. Here there is discrimination and perhaps that is what Parsley is alluding to!
Different markets are priced differently on any given day reflecting the value of the grain in that market. This is a situation that would not exist to the same degree in an open market. Japan would buy their grain at the same values as Korea in a market where producers were competing against producers for that sale.
Whether you call it "the monopoly" (a misnomer), "single desk selling", or "orderly marketing" the concept is the same. Wheat and Barley from Western Canada commands a premium. Grain grown in Western Canada and marketed collectively through the CWB does not compete with itself to drive prices down.
Never has that been so powerfully demonstrated as in the current marketing year. While farmers in the US were competing for sales after harvest prices remained low. When that grain was largely sold and the predominant marketer of wheat and durum with remaining stocks was the CWB,... prices rose dramatically! The CWB was able to sell a significant percentage of our grain at those higher values. This is reflected in the two dollar per bushel (or more) premium that the CWB earned on the total years sales, compared to our US neighbors. The CWB has thereby generated, through collective marketing, additional profits of about 1.5 Billion dollars for Western Canadian producers.
Examples of the success of collective action abound. Even Mayo Schmidt sees the advantage of collective action, now managing what used to be four separate grain companies. There have been statements made that in the absence of the CWB Viterra will make more money. My guess is that "extra" money will come out of farmers pockets.
A representative from a crop input supplier said that this is a good time for the agriculture industry. When you consider that every single dollar that comes into this industry comes through the farmers’ hands, the farmer becomes a major impediment for “the industry”. After all the only way they can get their share of the pie is to take it from the farmers. If you were "the industry" how would you remove this farmer impediment? Perhaps the first step would be to remove the farmers’ ability to act collectively.
All of those who post on this website whose objective is to eliminate the CWB and the farmers’ ability to act collectively are playing into the hands of "the industry". If those people actually think that as individuals that they are part of "the industry", they have a serious identity crisis.
The objective of the CWB is to prevent you and me from competing with each other and driving down the price. Licenses are granted when that criterion is met and there is no charge for that license.
The buyback is in fact two distinct transactions. The first transaction is simple. The farmer sells his grain to the CWB through the various options provided. All producers who sell through the CWB are treated similarly. Many producers have been encouraged by the numerous producer pricing options being offered and these offerings continue to expand and evolve.
The second transaction is where the individual buys grain from the CWB. This appears complicated but is in fact the same process any customer of the CWB would be exposed to. Anyone can purchase grain from the CWB, including producers of that grain. However, it is rare for a customer of the CWB to buy grain on spec in order to compete for sales with the CWB as is typically the case for individual producers contemplating a buyback. This is quite apparent to anyone purchasing grain from the CWB since those transactions typically represent premium values. For this reason the majority of sales by the CWB are to end users.
These two simple transactions which happen thousands of times per day, and when they are matched up through a single individual can be deemed to be the "buyback".
I will say again, there is no discrimination in the buyback. All producers have the same options available to them to sell through the CWB. Any customer can buy grain from the CWB. Having said that, there is a system in place which prices grain based on the country where the grain will be delivered. Here there is discrimination and perhaps that is what Parsley is alluding to!
Different markets are priced differently on any given day reflecting the value of the grain in that market. This is a situation that would not exist to the same degree in an open market. Japan would buy their grain at the same values as Korea in a market where producers were competing against producers for that sale.
Whether you call it "the monopoly" (a misnomer), "single desk selling", or "orderly marketing" the concept is the same. Wheat and Barley from Western Canada commands a premium. Grain grown in Western Canada and marketed collectively through the CWB does not compete with itself to drive prices down.
Never has that been so powerfully demonstrated as in the current marketing year. While farmers in the US were competing for sales after harvest prices remained low. When that grain was largely sold and the predominant marketer of wheat and durum with remaining stocks was the CWB,... prices rose dramatically! The CWB was able to sell a significant percentage of our grain at those higher values. This is reflected in the two dollar per bushel (or more) premium that the CWB earned on the total years sales, compared to our US neighbors. The CWB has thereby generated, through collective marketing, additional profits of about 1.5 Billion dollars for Western Canadian producers.
Examples of the success of collective action abound. Even Mayo Schmidt sees the advantage of collective action, now managing what used to be four separate grain companies. There have been statements made that in the absence of the CWB Viterra will make more money. My guess is that "extra" money will come out of farmers pockets.
A representative from a crop input supplier said that this is a good time for the agriculture industry. When you consider that every single dollar that comes into this industry comes through the farmers’ hands, the farmer becomes a major impediment for “the industry”. After all the only way they can get their share of the pie is to take it from the farmers. If you were "the industry" how would you remove this farmer impediment? Perhaps the first step would be to remove the farmers’ ability to act collectively.
All of those who post on this website whose objective is to eliminate the CWB and the farmers’ ability to act collectively are playing into the hands of "the industry". If those people actually think that as individuals that they are part of "the industry", they have a serious identity crisis.
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