CWB on malt barley... dump it and sell as feed...

[TOM4CWB]

bgmb,

"find a way to blame it on the CWB Tom"

What did that mean?

[charliep]

I had forgotten about the maltster/exporter malt
barley production contracts.

All need to read contracts before signing.

1) Was the production contract between the
maltster and the farmer against an actual brewery
sale? If it was, then the price the maltster paid
was high (the CWB would have seen to this). We
don't know how much the CWB has forward sold
maltsters for export business into the pooling
system and how much is sold under the cash plus.

2) If the production contract wasn't offsetting a
sale, did the farmer/maltster use another risk
management tool to cover risk? At the same time
that the minimum price contract was being offered
for malt barley, something close to $5/bu was
available in the feed market. Being creative, a
maltster could have offered a relatively high valued
malt barley price and if it didn't meet specification,
a good feed price as well.

3) Did the maltster put the contract specifications
in the contract? What were the terms around
rejection of a sample/contract?

[chaffmeister]

Tom:

Here’s some numbers that are getting kicked around (by the CWB):

2.5 mmt malt barley production this year (meeting high malt standards)

1.8 mmt malt barley pool expected (not yet sold) (The average over then last 5 years is 1.9 mmt)

1.6 mmt malt barley already selected (not all with a home yet – remember, “selected” does not necessarily mean “sold”)

This means that, according to the CWB, there will be 700,000 tonnes of malt quality barley that won’t make it (2.5 minus 1.8).

But to get to 1.8 mmt, the CWB is going to have to sell. And according to price indications they have in the market, they aren’t going to do it. But, if they’re telling farmers to store til Aug 09 (a dangerous practice with malt) or take feed price, this means they want to reduce the pool size. The only reason for this is to protect the PRO.

If this is right – if the CWB is trying to talk guys out of their malt selections - it sounds like they’re concerned that they won’t be able to sell even the 1.6 mmt of current selections – and keep the PRO from totally collapsing.

The more I read stuff like this the more convinced I am that the CWB is aiming for a smaller malt pool to keep the PRO up. The only reason for this is that they seem to think they get judged on price alone, and not total returns.

Does selling selected barley on an EPO guarantee the CWB will take it? If so, maybe accepting $291.25 (yesterday's 100% EPO instore Vancouver) is better than hoping to get $327 (the PRO), with the very real possibility of only getting feed value.

All in all, it’s a totally dysfunctional mess.

[mcfarms]

The only way to get out of this gracefully for the board would be to open a second pool however without the ability to close the pool and open a second pool to reflect current values and or do only cash plus offerings the board is in a untenable situation here, they've been here before and haven't learned.

[Zaphod]

A big reason for the big malt crop is the weather, but that's always the biggest factor. Cool temps make for plump, low protein barley. Actually, the barley merchant I talked to suggested that there were roughly 5 million tonnes of malt quality barley in western Cda. The points about the CWB needing to make sales are very valid though. In any case, the malt PROs will be heading lower. It's just a matter of when.

[Burbert]

I don't believe one word of this posted drizzel. These are detractors bashing the CWB, in an attempt to free up cow food for poor Albertie ranchers that need the barley. Here is the real solution for the ranchers, go buy excited states corn, better for your beasts to digest!

[TOM4CWB]

Burbert,

Why would you truly care anyway?

DO you have a commrcial volume of malt... or represent those who must make sense of this marketing system?

It is easy to take pot shots at us...

From a logical view... does what we bring forward make a 'common sense' discussion...

Where exactly are we 'out to lunch'?

[hoppsing]

The allegation that Cdn feed barley with a germ spec has been sold to China is totally false. Canada is up against huge competition from the EU which has a nearly 2 MT exportable surplus this year. And then there's Australia! Remember, world malting barley trade totals only 4.4 MT. Cdn malting barley exports could still reach 1.2 MT. To my knowledge, the CWB will not be limiting sales as long as they are a decent premium to feed. Sorry, Tom, you're really not making much sense.

[TOM4CWB]

hoppsing,

We don't make 'much' sense?

The CWB 'pool' system... is a mess once again...

We growers needed a flat pricing sales system... to lock in basis and a decent base price...

Malties globally were searching for contracting opportunities and the pricesin the US clearly show what marketers looking out for their grain growers SHOULD have done!

"Montana (Golden Triangle District) Malt Barley: $301.60 /tonne (Canadian)"

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

"Montana (Great Falls) Dark Northern Spring Wheat #1 (13.5%): $319.60 /tonne (Canadian)"

What does this prove... other than our system of selling/marketing is broken!!!... and needs radical change.

Obviously... doing the same thing over and over... and then expecting a different result... is as expected... once AGAIN! "designated area" grain growers" short... BILLIONS.

OUR system is busted... uncompetitive on both sales and purchases of inputs!