Canadian wheat 'too expensive'

[Fransisco]

BTW- Our canola, oats, soybeans, peas, sunflowers, etc,etc get sold everywhere around the world without any problem. Wheat would be no different.

[cityguy]

The US has a base customer list where they will always sell wheat to for various reasons - quality/geography/credit. The fact is that this year their export program is about 850 million bushels which is basically the lowest it's been in close to 40 years. It will be interesting to see what the USDA thinks next years number is when they come out with a balance sheet on Tuesday. Chances are it won't be much higher. In addition, there's a good chance that the carry out will be over 1 billion bushels- essentially half the crop.The US has completely lost the Egytian market to the point the US doesn't even bother. On the last Iraq business done over the past week or so there's been Australian, Russian, Canadian all been sold. No need to rehash the cheap Saudi sales from last fall, but there have been three to four tenders since of which Canada hasn't been the only seller - but no US in the mix at all. There is absolutley no question from anyone in the trade that the US is a high priced island. That all being said, the US farmer has the choice of whether he wants to sell or not, and it's pretty clear that they are choosing to basically sell half the crop (and remember that they'll use more at home then they export) and keep half the crop. You guys are stuck with the CWB choosing for you whether to sell a portion at US prices and make you carry the rest or if they'll basically get it mostly sold with a mix of high US prices and lousy world prices.

[Fransisco]

Sorry but I just don't buy into the notion that US domestic customers pay more for their wheat than they have to. There's no Berlin wall around the US, wheat can come in from anywhere just like it can be exported to anywhere.

[gapper18]

Fran, your confusing me here because you truly have your head in the graound. At the top of the thread your mad at the CWB for trying to sell wheat for a high price, then your mad at them since you think they'll sell low, make up your mind! As for the prices in the states, check around, american wheat is selling for over a dollar a bushel less than it is up here. If you think that your going to be able to sell into the US and get that government payout for $6 durum, or any other grain, your dreaming. The US subsidizes American farmers, and they won't give you, a Canadian, the same payout. American elevators do not reflect world prices, the government pays them for their products despite prices being below their costs of production. It's obvious your against the CWB, but I'll put it to you this way, if the CWB is so bad for Canadian growers, why does every main grain exporting country in the world want it abolished, stating that it is an unfair advantage for Canadian growers?

[Fransisco]

It's not that the board is trying to sell wheat at higher prices it is that it constantly and consistently fails to sell wheat at higher prices. The proof is in our farmgate returns which year after year are below average.

And when I talk about US elevator prices I talk about them before any subsidies are factored in, and guess what they are almost always higher.

The cash bid right now today in Bottineau ND for 14% spring wheat is $5.31 USD In Berthold its $5.54USD in Fortuna it's $5.30 USD all of these prices are before any subsidies kick in.

The 09-10 PRO(which keep dropping) says it might get me $5.03 CAN. I'm sure it will be even less by the time we get to the final payment.

You don't need US style subsidies to beat the Board all you need is to be able to sell your wheat on the open market.

[Fransisco]

"if the CWB is so bad for Canadian growers, why does every main grain exporting country in the world want it abolished,"

Because it lowers the world price of wheat by giving it away at rock bottom prices. Do you really think they'd want to do away with the board if it actually increased the world price of wheat?

[gapper18]

Well your $5.30 - $5.54 sounds good, but since Minneapolis wheat is currently sitting at $5.29, I think your forgetting to deduct trucking and elevation charges off of your prices, and you can tell me, what does that leave yu with? If we looked at it like that, the current PRO for 14.5% wheat is sitting at $6.10 - $6.29, how is the US price better?

And as for the CWB getting rid of wheat for rock bottom prices, the US is notoriously guilty of dumping commodities at prices below their costs of production, and that is what lowers world prices. This is clearly evident with the guaratnees for US durum and the acres of it that are being planted this year, despite extremely low global durum prices. In parts of Europe, their governments buy stock piles of EU grain and sotre it for years at a time in hopes that prices will eventually rise, while at the same time, growers their continue to plant more and more of the abundant grain knowing that if they can't sell it, the government will buy it anyways. Now tell me what that does to the global price of grain? The CWB uses their size and quality of our grain to procure more lucrative contracts that fetch higher prices. Don't forget about the current global financial market right now, a lot of countries that we sell into do not have the money to buy our product so of courase their not going to buy what they want, their going to buy what they can afford.

Go back in history a few decades, when farmers were calling for the abolishment of a CWB'ish system, the government gave in, created an open market wheat and barley system, in only a couple of years, farmers were begging the government to step in with the single desk system. Pull out the history books, we're suppose to learn from our mistakes.

[Fransisco]

gapper I'm sorry to say this but you really don't know your numbers. You're quoting the new crop Pro without any deductions taken off and you're using a half a % protein point more than I am.

The US prices I quoted was the farmer in the pocket price price today compared to the estimated PRO in the farmer pocket price for old crop wheat. I didn't bother to do a dollar conversion, but that would have made the comparison look even worse.

It's not rocket science to do a fair comparison but you've once again shown that monopolists can't do basic homework when it comes to this topic.

[Fransisco]

Gapper here's a little asignment for you go the CWB webpage, download the latest annual report and look up market share.

Then please explain to us what the CWB market share is and how exactly they can use the market share they have to get higher prices.

[gapper18]

Fair enough, current PRO, in pocket 14% $5.45, are you really going to pay to truck into the states for your extra $0.05/bu? And if you did, what would it cost you? As for yuor market share, you seem to be side stepping the fact of your US and EU friends are flooding the market, which is what really brings down the global price. Do your own homework, it's clear to see that the CWB has market share, and relationships with customers that other countries and companies do not have. Typical un-productive farmer living to close to the boarder who needs an easy target to bitch about.