Global Warming

[charliep]

A long ways from global warming

Will note that barley is already a dual market. 80 % plus of the barley produced is open market/sold to the domestic feed industry.

Barley acres (something the livestock industry has to note) has been declining because barley (both feed and malt) are less profitable than other cropping alternatives (even today). To put the numbers into perspective, I note this years 9.9 MMT barley crop forecast from the CWB. Put some weather problems into the summer and Alberta will again be an importer of US corn (assuming $7/bu stays and a $1/bu basis) puts track Alberta corn/barley at $320/tonne.

As a livestock producer, would you favor having to purchase all your barley from a single desk. Your neighbors will deliver to the CWB, get an initial payment (or perhaps a CWB pricing that has no relationship to the price you pay as a feeder). As a buyer of an input feed, you are forced to buy from them at whatever price they choose to charge (likely based off corn). You have no recourse if you feel you are being treated unfairly other than the courts. Would the livestock industry be prepared to do this? What is the cost of doing this to both buyer and seller? Would this increase or decrease barley acres?

To answer your questions, Alberta government sees improved returns to farmers in an open market for barley based on better price signals/increased competition from the export market and from there an improved reason to grow barley/invest to improve productivity. Yes barley prices would go up. From the CWB survey, farmers in Alberta (and SK/MB) agree with this view of the world.

[charliep]

The livestock benefit by the way will be consistent supplies of feed. In the current market, you have inconsistent feed supplies and your pricing has been US midwest corn plus freight. I don't think the livestock industry can afford to import all your feed or pay local grain producers a US imported corn competitive price.

[charliep]

grassfarmer

Question to how you see the CWB providing farmers value?

Then I am going to put you in the shoes of a maltster. You go to the CWB in the spring and they offer you a malt barley contract for say $8/bu. Based on your margin need, you see profit and are willing to do business here. At the same time, you book the malt product with a brewer (profit margin locked in). The summer proceeds and there are crop problems/prices increase. You sleep well at night knowing you have a CWB contract. You have forgot that the contract says you are responsible for finding the barley in the fall. Come fall, the initial payment for malt barley is $5.25/bu and a PRO of $7/bu (by the way, you don't know where this number came from because you paid more than this 6 months earlier and prices have gone up since). You want farmers to deliver but they tell you the local feeder is paying $7/bu cash/at delivery so why would they be stupid enough to deliver to you? You go to the CWB to have them help you find the malt barley but they remind about the clause that says sourcing is the maltster responsibility/problem. To summarize the contract with the CWB isn't worth the paper its written on let alone the match to burn it. The CWB does provide the advice that the maltster can pay premiums to attract the deliveries. What looked like a profit on the operation is now a major loss.

Could the livestock industry live with this? Even better, could they live with a equivalent to the cash plus program (CWB holds back top 10 % of the price you pay and gives the grain farmer some unknown amount down the road in a final payment)?

[grassfarmer]

What's wrong Parsley - can't understand simple English? I asked exactly what I meant to ask "is it an admission that they know removing the CWB monopoly will in fact lower grain prices rather than raise them?" Why else would this be listed as an objective in a program designed to revive the fortunes of an ailing livestock industry.

Charlie perpetuates the contradiction when he states that they (Alberta government)see improved returns to farmers in an open market for barley based on better price signals/increased competition..."
but at the same time:
"The livestock benefit by the way will be consistent supplies of feed. In the current market, you have inconsistent feed supplies and your pricing has been US midwest corn plus freight. I don't think the livestock industry can afford to import all your feed or pay local grain producers a US imported corn competitive price."
Lets keep it real - if the barley price in western Canada goes up as a result of freer marketing the feedlots will need to pay more for their feed. Consistancy of supply will not land the feed in their lots any cheaper.
You can't have it both ways - if removing the CWB raises grain prices that will hurt the livestock sector. The fact that the Alberta Government has now come out and stated that removing the CWB will prove adventageous to the livestock sector can only mean that they expect grain prices to fall not rise if the CWB is removed.

[perfecho]

"To answer your questions, Alberta government sees improved returns to farmers in an open market for barley based on better price signals/increased competition from the export market and from there an improved reason to grow barley/invest to improve productivity. Yes barley prices would go up."
or.......did major corps. lobby goverments so they could have a piece of this pie.....kind of like the open market with cattle and all the competition that bolsters that commodity? ;-)

[vvalk]

grassfarmer. how ys that the CWB has never sold barley for more then Lethnridge cash barley. Feedlot alley was created by on open barley market. Where is the value? Wheat would be no different.

[vvalk]

grassfarmer. Explain, how is it, that the CWB has never sold barley for more then Lethnridge cash barley. Feedlot alley was created by on open barley market. Where is the value? Wheat would be no different.

[grassfarmer]

Yes, Perfecho your theory sounds plausible to me.

vvalk, You say feedlot alley was created by an open barley market. I think it is also generally accepted that feedlot alley's expansion has been based on low cost grain since the removal of the CROW. Since grain prices have risen considerably in the past year or so the economics of feeding grain in feedlot alley have taken a catastrophic turn financially. If, as some on here suggest, removing the CWB monopoly would
increase ex farm grain prices how can that do anything other than continue the turmoil in the livestock sector? Why then is the removal of the CWB monopoly stated as an aim of the new livestock strategy devised by the Alberta Government? It can only be because they know it will lead to more cheap feed grains in western Canada.

I should add I would be happy to see grain farmers net returns increase - it is long overdue. Grain price increases do not worry me greatly as I am a grass/ forage based producer who only uses around 2.5 tons of feed pellets per 100 animals per year.

[TOM4CWB]

Grassfarmer,

I note feeders as STILL getting cheap feed barley... long after the CROW was washed down the river of life.

Take one look at the 06-07 "B' Barley pool... with $110/t PORT PRICE @ Vancouver that was dumped into a market that was paying 50% more...

Wheat that the CWB grades feed ... worth $22/bu in Sweetgrass MT. in Feb 08... and the buyback at the time being over $200/t and #1 $500/t to keep our domestic prices DOWN...

Please explain how the Ontario Wheat Board/AWB... and cooperatives around the globe... keep on buying and selling grain... without a CWB 'single desk'... yet manage to provide value for their members and remain valued members in the supply chain!

This adds up to one conclusion... the CWB basis offered wheat and barley growers... proves one thing alone...

The CWB IS VERBAL 'Global Warming'... so VERY much hot air...

That is backed up by intimidation... fear... deceit... and greed.

I get something for nothing by stealing my fellow farmers grain and stopping them from earning a fair return for their labours!

HOW on earth can you defend the CWB 'single desk'... when you yourself KNOW it is HOT AIR?

[charliep]

grassfarmer

Will note you by passed most of questions including whether the current dual market should be gotten rid of and all barley sold through single including the domestic livestock industry. I note your grain pricing would be easier - just one phone to Winnipeg to speak to a cooperative CWB merchant. There would be no relationship between the price you pay the CWB for feed and the price the farmer/grain company gets paid that delivers grain to your feedlot. In fact, the farmer really doesn't get paid the full amount but only an initial payment and waits for the rest.

This should be an easy question for you to answer.