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CWB single desk status safe for now says FAS

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    CWB single desk status safe for now says FAS

    Hmmm...

    http://www.world-grain.com/news/daily_enews.asp?ArticleID=97690&e=tom4cwb@hotmail. com

    "(World-Grain.com, November 03, 2008)
    by World Grain Staff

    --------------------------------------------------------------------------------




    OTTAWA, ONTARIO, CANADA — The U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said recently that the Canadian Wheat Board (CWB) should be able to hold onto its monopoly powers over Western wheat and barley for a while longer. The global financial crisis, another minority government, and over supply and declining grain prices are all factors that will likely affect the Canadian wheat situation, the FAS said.

    In the national election held Oct. 14, Canada’s conservative government failed for the third time to win a majority and therefore still needs the support of at least one opposition party to pass legislation on the issue. To date, all three opposition parties have expressed their support for the Canadian Wheat Board and have opposed the conservative plan, the FAS noted.

    The popularity of the CWB and its single desk seller status tends to increase in times of global economic slowdowns, FAS said. However, the CWB director elections at the end of November have the potential of seeing the number of pro-monopoly directors on the board shift from a slim majority to a minority. If the shift were to occur, the board would likely take the Canadian Wheat Board in a more open-market direction.

    Industry analysts speculate that this is less likely to occur now than if elections had taken place in the spring when grains prices peaked. With the world economy slowing, and with big crop harvests facing difficult marketing problems due to a credit crisis, a majority of producers may feel more secure selling through the CWB, thereby limiting the likelihood of pro-free market directors being elected in the November director elections, the FAS said."

    #2
    And you see a problem with this analysis? When grain prices are high farmers generally want the free market to prosper and do not want upside limited , GRIP was a case in point. When prices are low farmers generally want protection against downside risk.

    Comment


      #3
      Ken Ritter:

      The results of the barley plebiscite announced today are not overly surprising. The CWB has been surveying farmers every year for the past 10 years and these results appear to be consistent with our annual findings.

      http://www.cwb.ca/public/en/newsroom/releases/2007/032807.jsp

      Comment


        #4
        Agstar- What you say is totally incorrect. I could have made much more money without a CWB in place this crop year. I would have been able to lock prices in that where obviously going down over the last 2 months. I did this with my off board crops. In fact I did this with all my crops because I can not run a business growing CWB crops, therefore my farm is "Certified CWB Free"

        Comment


          #5
          4441 and you are totally correct. If for what ever reason you don't like the way the CWB works for your operation don't grow board grains. I'm with you.

          Comment


            #6
            You just proved my point, when markets are good farmers are happy with off board markets.

            Comment


              #7
              When markets are poor, I can't afford the CWB marketing at any price policy.

              Comment


                #8
                agstar77,

                There is no way a western Canadian grain farm should have to drop the most profitable and best suited cereal crops from our rotations... it is not sustainable... and strains every other part of the farm community.

                Insanity is doing the same thing over and over... and expecting a different result each time!

                Cutting edge production becomes a commodity... and is just as vulnerable to mismanagement moves of the CWB... as board crops... because they all must compete against board crops.

                The result is massive misapplication of resources... and a non-sustainable agricultural industry!

                Just ask the livestock folks... what decades of distorted CWB cereal pricing schemes have done their industry!

                IT IS NON_COMPETITIVE... when they must pay competitive world price for their feed.

                Comment


                  #9
                  You could be delivering 11.00 wheat right now to the cwb if you priced in Feb.There were opportunities just like non bd. crops.But I suppose the basis was to high

                  Comment


                    #10
                    Katoe,

                    We could have sold our wheat for $22/bu in Feb of 08...to the US in Sweetgrass MT... or for $11/bu to the CWB and waited till after Aug 1/08... plus messed up our fall delivery of the 08 harvested crop.

                    What kind of a choice was that?

                    Sell to the CWB for half price... and hold the grain for 6 months.

                    This had a massive depressing effect on our cash market... and forced 'designated area' wheat growers to hold stocks back till after August 1/08... when the market did not need our wheat any more.

                    WHAT a SMART marketing move! (NOT)

                    This provides value for my farm... and caused every last kernel to be swept out of our bins... like what happened in Montana at premium prices? (I have some ocean front property I can sell you in S.E. AB!)

                    Comment


                      #11
                      During the 06/07 crop year, I grew 125 acres of CPS Red. This was the first time I bothered to take the time to understand just one CWB program. Using the FPC, I locked 20 MT.($0.69/bu discount) up in April 2006 before I seeded, 40 Mt in July ($0.59/bu discount). On a homebuilt spreadsheet, every day I followed the Kansas price/CWB discounts and PRO's from April 3 throughout the summer. Every time I entered the CWB discount, I got mad. My decision in July to book 40 Mt. rather than my plan to do 20 Mt. contracts was based on the fact that the US price went up and the CWB discount went down. Usually, the higher the US price the larger the discount grew. I MADE THE MISTAKE OF TRYING TO FIGURE OUT WHAT THE HELL THE CWB WAS UP TO. If I hadn't done that I would have kept to my plan and been better off as the price increased after I did the 40 Mt. In September/November, I delivered on my contracts and held the rest of my production (45%)and sold it as FEED WHEAT the following June. 16 months after booking my first FPC, the Final payment came out at $3.55 versus my weighted return of $3.63. Where was the CWB benefit? I made more than the pool even though I sold 45% of my milling wheat as feed, second guessed my plan because I tried to figure out what the CWB was up to, lost $0.69/$0.59 in discounts, got my money 14/12 & 6 months earlier. I can only imagine how PO'd larger growers must be when they see the $ lost. I haven't grown another board grain until this year and am now trying my hand at a basis contract for the first time. Watching the US market is one thing but trying to figure out what the CWB is up to unnecessarily adds another variable into the mix.

                      Comment


                        #12
                        T4 I guess you should have done abuy back then.

                        Comment


                          #13
                          Katoe,

                          So I should have sent the pool account of the CWB over $400/t?

                          How stupid do you think I am?

                          Wait... I know the answer to that!

                          Comment


                            #14
                            There were excellent prices available on dpc contracts that you missed out on also because of your cwb paranoia tom

                            Comment


                              #15
                              Excellent by what measure? Historical or compared to what other farmers in the world were getting?

                              Historically yes we saw some all time highs this past year. The problem is that it was still less than the world price.

                              It's not just about beating your own best prices we have to do as good or better than the other guys.

                              You can try to pretend the rest of the world doesn't exist but that doesn't make it go away.

                              Comment

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