Viterra To Prosper

[bucket]

chuckchuck/ chuckles

We can't change the past. But since you are so good with numbers maybe you would like to do the weighted average on durum for the 08-09 year. Considering that american farmers had the ability to to price durum for 14usd for this past sept delivery. Hows those premium prices looking now?
A monkey could of sold wheat and durum in 07-08 and did a better job. I wouldn't say, even with the 12 dollars per bushel and the fact that durum hit 28, the cwb did a great job.

[chaffmeister]

chuckChuck:

You talk about studies. Yes, lets.

With all due respect to Ed Tyrchniewicz and the late Daryl Kraft, their KFT study is fatally flawed (and if Daryl Kraft was here, he’d admit to it – as he did to me).

1. The KFT study did not take timing of sales into consideration. The most you can with this study is that it showed that “on the days it sold, the CWB got a better price”. But, even that would be a misguided conclusion.

2. When they compared CWB costs to canola, they didn’t consider cash discounts in Vancouver. Simply put (and I won’t even try to paraphrase) they thought the country basis was the total cost of handling. So when they saw a canola basis of $45, they assumed that was the cost. They forgot to consider the cash basis in Vancouver of $25 under (which makes the cost estimate only $20/tonne). If they had done the comparison correctly, non-CWB costs would have been lower than CWB costs.


And how about the Schmitz, Schmitz & Gray barley study from a couple of years ago. The one where they say the CWB makes $59 million more for farmers than the open market would have.

This one is an utter joke.

1. Richard Gray will tell you that the $59 million is on malt barley only – the CWB brings no value to feed barley. Well let’s do a little math to test that. The malt barley pool averages about 1.8 million tonnes a year. That means these poor misguided academics believe that the CWB makes an extra $32.77/tonne on malt barley. The funny part of this is that that’s more than the typical malt premium over feed barley. In other words, to believe these guys, you have to believe that in an open market (no CWB), feed barley would command a higher price than malt barley.

2. Take a close look at this study and then read the Sparks Barley Study released a couple of years before. Read them both. Closely. See anything funny? There is at a minimum, one full section of the SSG study that is practically word-for-word the same as a section in the Sparks study from 2 years before. What a weird coincidence! What a sorry, sorry joke!! SSG first copies the Sparks study then criticizes it. (Go ahead – ask Gray about this.)

3. And before you try to suggest that these are “peer reviewed” – forget it. Ask Richard Gray first if his barley study has been peer reviewed, and then tell us all what he says. (I already know the answer.)


chuckChuck, you ask:

“Are you inclined to believe anecdotal evidence presented with a political bias or would you put more weight on independent academic studies using correct methodology?”

Do you still believe the KFT and SSG studies fall into the category as “independent academic studies using correct methodology”?

They are not independent. Both groups of academics were hired by the CWB to come to a particular conclusion. Both used “confidential” data from the CWB. Data that nobody can check. For that reason, not peer reviewed.

If you think these are independent studies, then, with all due respect, you’re an idiot.

Correct methodology? Are you kidding!?

Leaving out a very important aspect of non-CWB pricing - is that good methodology?

Plagiarizing another study - is that appropriate?

Not verifying that the results make sense in the real world - is that OK with you?



chuckChuck – you say you’re “willing to bet that if you asked 10 economists to review the literature on this issue that the majority would find the single desk provides a significant benefit.”

I’ll take that bet.

[bucket]

One step furthur on the study side of things to prove their theory. If andy schmitz's analysis is correct why does his brother and nephews who farm his land grow very little board grain. And if they do, it will go off board when the its time to haul grain. Schmitz as most of my neighbors know was paid to come to the cwb conclusions.

[TOM4CWB]

Chuckchuck,

Risk management MUST be transaction based... through the whole cycle... which the CWB fails to carry out.

It is just plain suicide to run the CWB the way it is done now... with the pool accounts taking the main share of the risk... especially with the huge hedge pressure PPO's place upon risk management.

The whole collapse in the US IS because of the lack of self discipline... to properly manage risk... subprime... the financial melt down...

This on DTN;

"High-dollar commodities and market speculation during the spring and summer now result in speculation about survival of companies that include VeraSun, Paul Reinhart Inc. and Pilgrim's Pride Inc."

..."STRATEGIES WERE ABANDONED

While analysts can state each company's situation is a reflection of their overall industry, the connection between the ethanol producer, cotton merchant and the chicken company is a repeated theme of being unable to cope with the margin calls on the futures market, leading each company to abandon its hedges and risk-management strategies, so when the futures prices came down, none of the companies was able to reduce the costs of its high-priced commodities.

DTN Senior Analyst Darin Newsom points out that with VeraSun and Paul Reinhart Inc., each company would have been better protected remaining in the futures market. Each company could have sold futures at the higher price for which they bought their commodities and bought back as the futures price dropped. If the futures price went up, the value of the actual assets they bought, either cotton or corn, would have offset the losses in futures, which is the actual value of the hedge."


The CWB placed massive risk on the pool accounts... and the returns clearly show the result.

Every grain grower in the 'designated area' needs to understand why the CWB fails the grade.

The pools can't take the risk... the losses are massive when the market goes against the sales dept of the CWB... which is just about always!

Market direction CANNOT BE PREDICTED... Marketing 101.

We simply cannot afford the massive losses the CWB collects... and covering your eyes (with your head in the sand) Chuckchuck and timm... won't make the massive losses any less.

The CWB marketing system is broken... get it?
BROKEN.