$.5B per year... lost to CWB single desk...

[charliep]

As someone involved in review of the study, Food and Agriculture Organization data is real and collected for other purposes than this analysis. This regularly and consistently collected data at actual delivered importer port position and shows Canada sells for lower values than other exporters. It is history and is a measure of performance. I also note the comments that Canada is a relatively minor provider of wheat and barley to most customers and these customers can easily switch their purchases to other exporters if prices fall out of line.

Will note there are also a review of Canadian prices relative to the US. The study also looks at Quorum data (highlighted previously in these threads) and the interest costs of the pooling system to individual managers.

[chaffmeister]

OK – here’s another for all you who defend the CWB (by attacking any logical anti-CWB argument) at any expense, even if that includes your own rationality.

The CWB has a pricing model it follows for sales in the wheat pool. It’s called the Wheat Pool Pricing Model. It goes something like this:

The Wheat Pool Pricing Model establishes the pace for pricing the wheat pool. This pace is denoted as the target pricing pace. Pricing within the model is a combination of actual cash sales activity and derivative trades. Pricing more or less than the daily “target” amount is regarded as discretionary trading activity. Daily sales and derivative transactions are benchmarked to the current futures market prices at the end of each day. In a rising market, as was the case in the summer and fall of 2007, results will be negative if the actual amount of wheat priced exceeded the amount to be priced established by the target pricing pace. Tonnage priced at the earlier lower price levels will produce negative results when those positions are closed out at market prices above the level at which they were initiated.

This is word-for-word from page 43 of the 06-07 CWB Annual Report under the heading “Measuring Success”.

The way I read it, it means the model sets the amount to sell <b>each day</b>. If they don’t sell the daily allotment of wheat to customers, they sell futures to meet the daily pricing obligation.

The model also allows “discretionary trading”.

In my posting above I note that the average CWB selling price during the crop year was $100 ABOVE the pool final. It was $27 above the final if you use the 18 month average ending at the end of the crop year.

Wilagro – this is all CWB price data and the CWB’s own words describing how they sell. I’m not making any of this up; no judgments, no estimates.

Can you explain why your Final Pool Return (actually the latest PRO) is between $27 and $100 LOWER than the average selling price?

<b>Why did the CWB make you between $362 million and $1.33 billion LESS than the description of the CWB Wheat Pool Pricing Model would suggest? (I’m assuming the 07-08 pool size will be 13.3 mmt – the size of exports and domestic sales) </b>



Oh yeah – one more thing. What ever happened to the idea that the CWB supports prices by unilaterally holding grain off the market (not selling)? The Wheat Pool Pricing Model blows that idea all to hell. Either they’re selling wheat or they’re selling futures. Every day.

[Fransisco]

Here is what Chaff was talking about earlier. Now who was it again who sold to early?

<IMG SRC=" http://www.siemenssays.com/wp-content/uploads/2008/07/card-price-vs-pro.PNG " width="500" height="400"

[Fransisco]

Both lines are the CWB's own numbers, their asking prices throughout the year and the PRO.

Looks an awful lot like they just sold everything off the combine now doesn't it?

[wilagro]

So would you have the CWB sell only when the price was highest? What would they be doing for the other 11 months?...sitting around twiddling their thumbs and risk losing sales?

Looks like the pool price evened out the highs and lows like it was supposed to do.

Do Cargill or ADM sell only for one month of the year and only at the top price?

[chaffmeister]

You don’t get it. No one said anything about picking the top.

The CWB’s model says it sells evenly throughout the year, selling the same amount every day. The CWB’s own price data shows that if it actually did that, your final would have been much higher.

In other words, if it had evened out the highs and the lows like it was supposed to do (as you put it), why is your final so much lower than the average selling price?

[Fransisco]

You can't be that blind Wilagro, look at the chart, the highs are much higher than the lows. The board got you a below average price. AGAIN!

[TOM4CWB]

Wilagro,

Fran and Chaff are being way to nice to the CWB.

The CWB scammed over $70/t off my PPO contracted wheat... which all went to BRING UP the value of the 07-08 pool.

So the CWB steals this money from my farm... as again they are doing on PPO's for 2008-09.

AND I am to be pleased and happy with the services?

You totally miss the purpose of risk management Burbert.

The use of these economic tools is supposed to BENEFIT 'designated area' growers... if private industry did; what the CWB has done... for their CWB 'shareholders'... NOT ONE PERSON would be left employed with CWB management.

The probono public interest... to keep CDN/Global consumers with below market value board grains flowing... and multi-national food companies with massive profit margins... is obviously your only LOGICAL purpose in defending the CWB.

I object.

I don't care what the CWB sales dept. does... but our farm needs the opportunity to obtain a FAIR price the day/week/month the board grain becomes available to market. The rest of the time... I don't see why I should pay someone down at the CWB to lose my farm significant financial resources.

You can pay them Wilagro and Burbert... that is your privilege... if they fulfill some higher 'purpose' in your mind and for your farm.

Again...How much board grain each year do they sell for you folks?

[chaffmeister]

The CWB's target is the average price. The Pricing Model assures that.

After administration and other costs only found in the CWB system (like higher handling costs), the "net target" to the farmer becomes less than average.

The CWB allows discretionary trading. This could go either way - either they make money or lose it. Seems the way the CWB is set up, this is the only way to net better than average prices.

There's nothing that even remotely suggests that the CWB needs the whole book (the single desk) to pull this off.

They could do this as a voluntary CWB in an open market.

In fact, I could see guys booking a portion of their crop with the CWB - to lock in a "somewhat average" price for the year. The rest of their crop they would market/price on their own.

This is sound risk management - reduce your market exposure with the voluntary CWB pool, and diversify your wheat marketing portfolio with other strategies.

[Burbert]

Stats are for lazy people. Lets see, one, two, three, four, more and more, thats good. The big picture is a bit more complicated, to say the least. A fat bank account, is just part of being a good person, eh. Greed is good, greed is what makes the world go round!

[bucket]

Burbert

You seem to be a generous person. How would you like to start paying some of my expenses? You like income splitting via the cwb for your income, how about expense splitting for farmers.

It isn't greed - its about working damn hard and wanting what my crop is really worth. Its about getting the premium for my farm. I held on to peas until they were $12 - that's not greed that's getting the premium.

Wage earners like nurses and Viterra workers are looking at a 35% increase - don't you think your farm deserves an income increase for the risk you take?

[TOM4CWB]

Burbert;

What world do you live in?

Are you telling us... that you believe we have healthy bank accounts... when the reality is clear to every 'designated area' grower that we have never had larger bank loans/advances... in the history of our grain farms?

Where do you get this 'greed' judgement from...

We are charged with the moral obligation to provide food to a hungry world...

Then

YOU approve of short change CWB methods that detract and depreciate our assets at seemingly every opportunity possible.

WHO DO YOU WORK FOR?

WHY would you say these things?

Do you have the slightest clue on what is involved in operations of a modern 'designated area' grain farm of more that 2000ac?