Viterra To Prosper

[chuckChuck]

Mr. Weber, Tom and others,
With a little research on the internet it is possible to compare 2007/08 grain prices net to farmers. Lets take a look at durum. The USDA numbers show the weighted average durum price farmers received from June to May 2007/08 was $9.75/bu.USD net to farmers.
The # 2 CWAD 11.5 % protein PRO as of October based on 2007/08 August 1 - July 31 crop year was $12.38/bu. CAD (average net to SK. farmers). In order to fairly compare prices you would have to adjust for the 2 month diference in the timing of sales, currency, slight grade differences and the market advantage that US farmers have in higher domestic usage (say 50%)which translates into higher net returns because of proximity to US mills in contrast to our more distant markets which net us less.

That said, it is almost a certainity that the CWB has outperformed the US open marketing system by a significant margin on behalf of Canadian farmers. Any comparison of spot market prices during this time period to a CWB pooled price is not a fair comparison. It was widely reported that many (more than 1/2 of US farmers) sold at $7.00 or less. Of course there were a few who sold at higher prices with the peak of average monthly prices coming in the month of March at $15.40 USD. The total benefit of all Canadian durum farmers receiving $12.00 per bushel or better far outperforms the US system that delivered relatively dismal prices to many. Not to mention that there is every reason to believe that carefull marketing by the CWB in the durum market increased prices overall because they controled the biggest majority of exportable supplies. Therefore I find it difficult to believe that CWB is doing such a bad job.

[chuckChuck]

Tom,
I am curious Tom how it is ok for the Conservatives to support socialism for dairy and poultry farmers and free market capitalism for grain farmers? Are there two classes of farmers in this country? One that is protected by trade barriers and one that is not? Either you are for free markets or you are not. Which is it? Beacuse all the BS arguments about freedom and property ownership that many Cons. espouse don't ring true or fair since they also support supply mangement apparently.

"n case you missed it... Supply Management and CWB policy were put in place by the members of the Conservative Party of Canada... and PM Harper is RESPONSIBLE to implement these policies. Democracy at work... Your side lost your CWB phony monopoly... you needed to get Flaman in as a Liberal to win... if you were to have ANY credible argument!"

[Hopperbin]

Chuckchuck you should adjust for the lower than going rate prices that we were forced to take on the fixed price contracts? How about we open the books for all to see? Before you brag about a 12.38 return lets take a look at the return to all producers including the Fixed price contracts because they are producers also.

[LWeber]

QUOTE:

With a little research on the internet it is possible to compare 2007/08 grain prices net to farmers.

UNQUOTE

If that is the methodology you would like to choose, you cannot cherry pick one year. One year could be an anomally. Go back and do the excercise again the past five years - and then tell this forum your findings.

And while you are at it - do it for CWRS. And then tell us how you "find it difficult to believe that CWB is doing such a bad job."

Does that fall into the fiduciary responsibility category?

[TOM4CWB]

Chuckchuck,

You are bang on right about there being two kinds of farmers in Canada... those inside the 'designated area'... and those outside.

If you live inside the 'designated area'... your wheat price is $3/bu lower... than if you live in the interior of B.C.... Creston Valley gets to export to the US... or anywhere on the globe for that matter... without restriction... and keep the 'US Premium' without prejudice.


AGAIN I ask...How about 'designated area' grain growers being allowed the freedom to choose who they sell their grain to... like the rest of Canada outside the 'designated area" has the right to do?

OR would that cost 'designated area'SM5 too much for their feed grains... because they would have to compete with the rest of the world for our grain... How about a level playing field for feed costs?

At least SM5 has a franchise fee(quota).. and a benefit for the quota purchased... (profitable prices) what is so unbusinesslike about this...

CHuckchuck?
SINCE Conservative members voted in favour of this... what was so bad about that decision?

[chuckChuck]

Mr. Weber,
One year does not tell the whole story, I admit that. But 07/08 was a dramatic example of how the single desk can outperform the open market for most farmers (not all). Indeed what is needed is multi year analysis and comparison. However when that happens and the results favour the single desk often the authors are deemed to be biased, selective, and the recipients of a smeer campaign.

You obviously know about many of the multi-year studies. The KFT study showed an average benefit from the CWB for spring wheat over many years of around $13 per tonne with some years much higher. Informa recently did a study that showed the opposite. Read the CWB response on Informa and make your conclusion.

When you look at a business plan, whose numbers do you believe? Are you inclined to believe anecdotal evidence presented with a political bias or would you put more weight on independent academic studies using correct methodolgy? The reality is most farmers don't have all the information or expertise to make an informed choice. How would it be possible for farmers to know what is happening in 70 different markets for wheat? How is it possible for farmers to know what impact the large domestic usage has on US prices relative our lower domestic usage?

When I look at the arguments some farmers still can't understand why you can't fairly compare the difference between a spot price and a pooled price.

In conclusion there are numerous credible studies showing a benefit from the single desk. There are other studies primarily coming out of Alberta that show the opposite. I am willing to bet that if you asked 10 economists to riview the literature on this issue that the majority would find the single desk provides a significant benefit.

[Hopperbin]

Chuchchuck how would you explain the low price 3.48 net to producer on CWSWS wheat fixed price contracts? Obviously the CWB is not doing any sort of job here.

[LWeber]

QUOTE
With a little research on the internet it is possible to compare 2007/08 grain prices net to farmers.
UNQUOTE

Stop spewing from your speaking notes.

Do your own due diligence as cotton says and if you do not have the capacity - how do you know when there is a premium or not?

It has nothing to do with Kraft or 10 other economists. The evidence is there for you to discern.

Advise this forum the results.

[chuckChuck]

Mr Weber,
I have presented numbers wich are publicly available. I have referenced academic sudies which are part of the public record which you discount for no apparent reason. Along with the sales data presented to actual board members there is s strong case for the benefits of the single desk. Where is your evidence to the contrary? Sorry but you have to make a better case. I have done little work here, now it is your turn. Show me your numbers and make an argument.

[LWeber]

You lead this forum to believe that you did the work to compare last year's durum price using publicly available numbers.

QUOTE

With a little research on the internet it is possible to compare 2007/08 grain prices net to farmers. Lets take a look at durum. The USDA numbers show the weighted average durum price farmers received from June to May 2007/08 was $9.75/bu.USD net to farmers.
The # 2 CWAD 11.5 % protein PRO as of October based on 2007/08 August 1 - July 31 crop year was $12.38/bu. CAD (average net to SK. farmers). In order to fairly compare prices you would have to adjust for the 2 month diference in the timing of sales, currency, slight grade differences and the market advantage that US farmers have in higher domestic usage (say 50%)which translates into higher net returns because of proximity to US mills in contrast to our more distant markets which net us less.

UNQUOTE

If you did this work yourself, you have the capacity to go back and look at 5-year results using the data that you referenced above. Publicly available data

What are the results from a 5 year comparison - or are you reading speaking notes?

[charliep]

chuckChuck

In doing your work, did you adjust for differences in crop years between the US weighted average price and the CWB pool returns (average prices)? Did you include the 3.4 mln tonnes of wheat that was priced under the fixed price/daily price contract for under $7/bu? If the same analysis for the previous 5 years want would the results be or would you bring out the logic on page 8 of the Sept. 8 CWB response to the Informa Economics study.

Every time I see reference to the magic numbers the operations side of the CWB shows the board of directors, I have to ask what due diligence the b of d does to check these numbers?

[parsley]

I, too,would like the 5 year results... to post on my blog.

I'm waiting. Pars