AWB Changes

[bluefargo]

ABC Countryhour - Wheat Board changes - Grower-elected domination of the AWB
Board has come to an end. After a two-week adjournment AWB re-convened its
Extraordinary General Meeting (EGM) in Melbourne late yesterday, where 77
per cent of growers voted in support of constitutional change. The
company's dual A-class and B-class share structure will now cease and AWB
has instructed Computershare Investor Services to redeem all A-class shares.

The AWB Board met immediately after the vote was taken to choose a date for
the next EGM, which must be set and notified within 21 days. At that
meeting a new constitution will be adopted by shareholders and all A-class
grower directors must retire. AWB chairman, Brendan Stewart, re-opened
yesterday's contentious EGM, adjourned on the 21st of August following a
request from the floor of the meeting by the Victorian Farmers' Federation
(VFF). Only 27 per cent of growers had bothered to vote and AWB did not
have the numbers to get past the magical 75 per cent majority of votes cast
that it required. After a fortnight of intensive lobbying, AWB got what
it wanted and Brendan Stewart says the reason constitutional reform is now a
reality is because growers who hadn't voted got involved. "We were very
successful in bringing that participation vote in the last two weeks from 27
per cent to 44 per cent," he says. Former deputy prime minister, John
Anderson, is encouraging growers to throw their support behind AWB after it
got its constitutional reforms through yesterday. 77 per cent of A-class
growers backed plans to scrap the dual A-class and B-class share structure
at an E-G-M in Melbourne, ending grower-elected control of the company. But
long-time Single Desk supporter and architect of the two-tiered system, Mr
Anderson, told Catherine Clifford the time has now come for growers to unite
and look to the new.

[malleefarmer]

whilst not a huge awb supporter they are on a level playing field with everybody else.
Changes to wheat this year are nothing really except we have 6 companies running pools and will have about id say at a guess 15 accredited exporters offering cash prices and fowards for export wheat and probably another 10 in the domestic market.

There is currently about a $35 spread between top and bottom in the cash market and about $50 in the estimated pool returns offered by various companies, i think its actually called "competition".

And for some of the guys who post on here who think dinasours still exist and the earth is flat you can run pools along a cash market in a fully deregulated market.

I presume i will get a howled down by forum users but sorry weve got a system that pleases everyone.

End of rant

[parsley]

mallee,

I presume you must have watched UFC with Chuck Liddell yesterday because you're feistier this afternoon than in this morning's email.

Hopefully, I won't be such a pansy after I watch tonight.

Parsley

[TOM4CWB]

malle;

The CWB 'pool' fearmongering that the 'single desk' is required to have a pool is hogwash.

AWP/Viterra (@ Bow Island)Bean growers in southern Alberta have been pooling for many years in a totally deregulated market... and the bean pool actually has now almost all the Alberta growers only growing pooled beans. THey gained major market share by offering fair prices... and having a stable financial base/decent marketing/grading performance.

The CWB 'can't' pool in a voluntary system...only means they 'won't' because they don't have to... and never will until blokes in the 'designated area' grab a brain!

[bluefargo]

Mallee farmer: Let me get this straight - you have 6 companies offering to pool your grain (Wheat only?). Is the AWB one of these 6 companies?
You also have 15 companies offering cash prices for export. And another 10 companies offering cash prices for domestic use.
That sounds like one hell of a lot of competion.

How are your crops looking?

[malleefarmer]

yes awb is offering pools but they havent been granted accreditation yet to export but would suggest in the next round they will be awarded the right to export wheat.

there is quite a checklist involved before you get an export liscense and some have been knocked back.

3 companies offering pools for barley.

have a good friend who is an avid single desker,foam at the mouth type, which you dont have in canada, but anyway the other day we chatted and "when its all said and done i will deliver my wheat to awb pool and barley to abb pool" and he no wonders what the fuss is was all about.

Really the only change to pools they are "premium" pools which you have to contract into prior to harvest and they offer a $10 better return than those who dont contract, obviously it give pool provider and indication of tonnes likely to be delivered, there will be regional or domestic pools some may be for export some for local use, again could a price differential.

Other offering pools which will be normal ie 18mths before fully paid out and other companiies offering pools which will be finalized in 6 months.

Im sure awb will probably offer as many as 4 pooling options,its up to growers to work out which is best for each individual farmer.

I would suggest once awb get a liscense they will still get the largest share of pooled grain.

I will post more often if your interested in price differences etc in the pools.

Anyway guys how much downside before we hit the bottom of the wheat market.
Rains are forecast again late in the week not huge amounts but top ups to keep us going over here to average production, but if we get dry 3 weeks the world will take notice again i would think.

[agstar77]

Does contracting to the pools lock you into input purchases and financing? It would seem logical that these companies will leverage pool contracts to increase their share of input markets.

[bluefargo]

Malleefarmer

Thanks for the info.

Canadian farmers should be paying close attention to your what's happening in Australia as I think it relates closely to our situation.

Again just to clarify; in addition to the pooling opportunities you outlined you also have many options to sell your grain into a cash market either for export or domestic use - is that right?

I have a friend who who farms in southern NSW who I email from time to time. He says USDA has you pegged at 25 mmt of wheat. He suggests growers feel its more like 13 - 18 mmt.

[bluefargo]

Mallefarmer

Oh and by the way I did pick up on your comment about not having rabid single desk supporters in Canada. No we don,t. We also don't have any rabid CWB haters either. Ha !

[furrowtickler]

mallee, I wish your comments could be printed all over the Western Producer.
Alot of CWB hard cores need their eyes opened up and see how others opperate without handcuffs. Most of them have not taken the training wheels off their marketing bikes.

[malleefarmer]

Interesting comments
Re locking into financing and input purchases no it doesnt lock you into either.
Are alot of your inputs supplied by grain companies?
Over here most financing is done by banks but you can use gain companies and inputs there are a vast array of suppliers.

Re crop size i at this stage will still go for 20 plus but next two weeks are critical,most areas are slightly below to slightly above average so some rain will turn that to average and bumper crops without we will decline.

Temps are very kind at the moment.

PS feel free to cut and paste my comment in your local rural newspaper.
If they print it that is,presume your monoply suppoting media were the same as ours heavily edited when comments went against editors opinion.