2008-09 PRO/FPC where are you CWB CEO WHITE?

[TOM4CWB]

Dear Charlie,

AS I was talking with folks picking up supplies today...at the local elevator...the subject came up about CWRS 08-09 CWB prices...

$340/t PRO... $292/t FPC.

It occurs to us... that this (extra $50/t) is just about exactly the EXTRA basis the CWB is taking from growers doing Fixed Price Contracts right now! $50/t... right off the top... being transferred directly to the pool account!

If there were some way to lock the PRO in...this CWB policy wouldn't be quite so market distorting... but as it is applied right now... the CWB masters are using the 'monopoly' gun to extort 100's of millions... from commercial growers... who need decent risk management tools!

What do we do...to object to this new tax on our farms?

To CEO Mr. White... why are you allowing this non-commercial pricing signal... to distort and devalue the CWB as a valid marketer for grain growers?

How can anyone claim these CWB pricing policies 'extract a premium" for grain growers... when instead they 'extract a premium" FROM designated area growers instead!

How can the CWB hope to survive in the long term... with this type of distorted price management?

[charliep]

Perhaps this is an early warning sign as to how deep into the red the CWB PPO contingency fund in 2007/08. You will not know the actual results until the 2007/08 final report is done.

The federal government really has to do a forensic audit to determine the CWB risk management strategy and the actual processes/how executed.

[charliep]

Have to apologize for taking off topic in the above thread but also have to ask why no one seems to follow CWB basis levels and asks questions. Had pointed out that new crop canola basis levels are also wide - an indication that all buyers (including the CWB) are taking extra protection on basis.

What sets me off however is the whole goofy CWB system of relating all producer pricing options/risk management strategy to the pool return outlooks. If the CWB pool return outlook is an accurate forecast/estimate of the future, why are they not offering this price? Where does a farmers $50/tonne go? 100 % to managing risk/feeding the speculators that some like to complain about?

If the CWB related to one (not mulitple) futures months or a cash sale, this basis would be substantially less. I would only have to have SK3 or someone else compare the new CWB FPC to a new crop deferred delivery contract in the US to highlight the cost of the system.

[charliep]

See if I can't poke the bear some more.

Found an interesting website that posts North Dakota grain prices.

http://www.bottineaufarmers.com/index.cfm?show=11&mid=6&theLocation=&layout=2&t=%7 Bts%20%272008%2D05%2D26%2015%3A59%3A13%27%7D&cmid=

The web site shows new crop DNS 14 Pro basis at 90 cents/bu (Bottineau).

The 2008/09 fpc basis (or bpc if you just do this part) is 48 cents/bu - this is a Vancouver price so you have to knock off at least another $1.50/bu CWB deductions. Real basis $2/bu.

If you believe the 2008/09 PRO is an accurate forecast of the future (no reason at this point to question), the new crop payment forecast (using $1.50 deductions) is $7.75/bu, very close to the new crop deferred delivery at Bottineau of $7.67/bu.

Based on this analysis, should the basis today be $17.56 under (reality) or should basis be a plus number? Do farmers have a clear understanding of how the CWB manages risk and the costs associated with these programs?

[charliep]

Bottineau new crop 90 cents/bu under by the way. Sorry about that.