CWB Webcast

[charliep]

Just curious if anyone listened to the CWB yearend webcast?

Found the comments on timing of sales/pricing both sides of the border interesting.

The one comment was that western Canadian farmers sold most of their fpc contracts for less than $7/bu. Will note that the pricing schedule for fpc contracts ended Oct. 31 (use of which was up/highlighted in the presentation) and only farmers who used basis contracts (uncomfortable for some). Perhaps no surprise on results -if farmers had 365 day pricing periods, the results might have been different.

Also note the comparison of published US prices (actually vague in the presentation and anecdotal) which is based June to May to CWB pooled prices (pooling year September to August). If adjustments were made to reflect delivery periods, would the conclusions be the same? Also note US farmer deliver most wheat off the combine (June to September) compared to Canadian farmers who deliver in the last quarter of the crop year (see Informa Economics study).

A final note is the reference to the quote lower valued trade sales during the open market period. If I compared the feed grain market spring/early summer (open market sales) to CWB sales late summer/fall (ie. nothing to do with Canadian barley policy), what conclusions might be reached (see link):

http://futures.tradingcharts.com/chart/CN/W

I note the trade did 800,000 plus. What volume did the CWB do on the "A" series not done open market. Perhaps (as email spam tells me everyday) size does matter.

[Fransisco]

Who is it again who sold too early?

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[kryger]

A lot of U.S. farmers double crop winter wheat acres with soyabeans. Have to deliver wheat early to make room for beans in their bins.

[Zaphod]

I loved the way they talked about the value of their "strategic selling approach" when really it was just selling a little every month. One of the more astute reporters asked whether the CWB just got lucky this year because prices rose during the year. If they had fallen, the "strategic selling approach" would have been a disaster. In fact, is that the way it's lining up for 2008/09?

[Fransisco]

Look at the chart guys, the board did no better than you would have selling everything off the combine.

[Kodiak]

I was laughing so hard I almost fell off my chair when Allan Dawson asked about the barley price comparison between what the trade priced feed barley at during the open market period, and what the feed pool returned. What a set-up! When Ian White didn't answer, Maureen Fitzhenry couldn't intervene fast enough with the answer Allan wanted to hear!

It was so obviously a planted question - so obvious that Dawson wanted to promote his ideology with a phony price comparison and so obvious Fitzhenry wanted to help him out. However as is usually the case when the CWB is defending its performance, it was an irrelevant price comparison and out of context self-serving comment.

The CWB and their ideological supporters like Dawson are getting more and more desperate in their defense of the CWB. This desperation is so obvious and their actions so transparent it's really funny to watch.

[Kodiak]

One additional observation - although many more could be made.

Ian White did a masterful job of skating around the issue of the losses to the contingency fund. It's obvious that he doesn't feel its his job to be accountable to farmers for the kind of management - or mismanagment - that goes on under his watch as CEO. It is his job to ensure risk management procedures are in place and to account for the results of operations. He should have been much more forthcoming.

While some questions and answers were downright funny, this one was downright frustrating and disappointing. I had hoped and expected the new CEO would be a straightup guy. This particular response left me cold.

[parsley]

Cold, you bet.You caught on fast, Kodiak.

Meantime he gets farmers' cold cash... $800,000, give or take, and could care squat about farmers.

Parsley

[parsley]

GLOBE AND MAIL
First of August, 2008

by PAUL HAAVARDSRUD

AGRICULTURE: WHEAT BOARD Farmers reap record sales



Prairie farmers will get a record haul for grain sales this year as surging prices for wheat and barley drive up Canadian Wheat Board revenue.

Spurred by rising food demand, sales by the non-profit marketing agency for the 2007-2008 crop year, which ended yesterday, are projected to rise 57 per cent from last year to $7-billion.

The strong sales figures could play into the wrangling between the Wheat Board and the federal government. Since coming to power in 2006, the Conservative Party has argued that individual farmers should have the option to sell their own grain.

The relationship between the government and the Wheat Board was further strained when legislation was introduced earlier this year that would give farmers the freedom to decide whether to use the board to sell their grain.

In releasing the numbers, Wheat Board chairman Larry Hill said the record sales confirm that the agency's collective approach makes sense.

"If you're looking for evidence that the [Wheat Board] adds value for farmers, you need look no further than this year's numbers," Mr. Hill said in a news release. "The combination of pooling and pricing options gives modern farmers the tools they need to succeed in the international marketplace." A Wheat Board calculation comparing this year's Canadian sales to U.S. farm receipts shows the board earned farmers an extra $560-million.

Individual American farmers sold their wheat at lower prices earlier this year, while the board was able to hold off until prices jumped, it said.

Supporters of the Wheat Board, which was established more than 70 years ago to sell most of Western Canada's wheat and barley harvest, have argued that a so-called single-desk seller puts them in a better bargaining position with buyers abroad.

[charliep]

Would encourage all farmers with high speed internet access to listen/watch the year presentation.

Highlighted above already but found the comments on barley extremely interesting. I look forward to the CWB explanation of the $1.50/bu discount on open market barley sales. I highlight the AGC elevator bids and note the lower priced sales occurred in August after the announcement. Would suspect that the majority of the open market business was transacted (and know from pricing programs in the country) in the late spring/early summer at higher values not too different from the CWB "A" pool results. The "A" pool feed barley (CWB numbers) was 36,400 tonnes and sold in the mid to late fall when world feedgrain prices were higher.

I also have the question the CWB on the logistics issue. My experience would say the trade was quite able to put together the logistics on getting the open market feed barley to port (not rocket science for a 1 grade commodity and ability to ship unit to 75,000 tonne vessels) and it was only when the CWB got involved that things got complicated.

I could also rant on about the relatively low valued "B" early in early 2009 that magically went higher over the late spring/ summer (412,500 tonnes in this case) and the impact on domestic feed markets but will leave alone.

Also note Kevin Hursh's question on the wide spread between old crop and new crop malt. Interesting the whole issue was blamed on the open market scenario and sales that got transferred forward. Would also note the declines in both European and US malt barley prices with a pretty good probability (depending a lot on the Aussie barley crop) that malt barley PRO values will come down over the winter.

[charliep]

Will post the Alberta Grain Commission elevator survey prices. Note you can get a 2 year graph/choice of $/tonne or $/bu.

http://www.agric.gov.ab.ca/app21/grainprices

[charliep]

Should read before I hit send.

Should be unit trains to 75,000 tonne vessels.

Also the reference should be to open market pricing early 2008 (not 2009).

[AdamSmith]

I'm reminded of a true story here.

In April of 1912 my great great aunt, her adult children and her husband Mark Fortune from Winnipeg were coming home from overseas on this unsinkable ship called the Titanic.

After the ship hit the iceberg, the women and children were ordered into the lifeboats. So Mary and her two daughters reluctantly did so. But because the ship was unsinkable, the daughters took off all their jewelry and along with all their other valuables, gave them to the father and brother because even as they were being ordered into the lifeboats they still believed the ship was unsinkable.

Well today those valuables are at the bottom of the Atlantic. Reality won out over the hype and advertising.

Same with the cwb debate, reality will win out over the hype and advertising. If the cwb and their supporters want to believe their own lies, fine, let them. If individual farmers choose to not do their own due diligence, fine. It's their wealth being lost.

Me, I do everything in my power not to deal with cwb, I just wish more farmers knew that if they too chose the same the cwb ship would sink much faster.

[cottonpicken]

Good story Adam.

That is one hell of a damning chart Fran,good post.

I hate to calculate my losses.

20 dollars was my magic number.(undeniable fact)

130% old crop and 50% new,would have been where i landed.

[GrainBeetle]

Fransisco, what are you hiding?

<a href="http://www.winnipegfreepress.com/subscriber/columnists/b_kives/story/4207544p-4799844c.html">Factory Farms</a>


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