In this debate about the CWB, do we really care about US and EU govt support programs, different bushel sizes, large US carry outs, new exporters such as Russia, etc, etc?
None of this matters with respect to the CWB. The CWB will not be your salvation against any of these evils.
The thing about comparing Western Canada to the US is that it is the best comparison we’ve got. Don’t be mistaken that we want to sell into the US – we just see a very attractive system, one that shows what we might have here given the opportunity.
For example – so the US carry out will be huge this year. Big deal. Why is that important in the CWB debate? The point to remember here is US farmers are reacting to market signals. THEY are reacting. THEY are doing what makes the most sense for themselves, individually. If the US govt provides some support (misguided as it is), so what? Yes, it may distort markets, but there’s F-all that the CWB can do about it for you.
If the US farmer wanted to clean out his bins and keep selling until that happens, he can do that. And if he chooses to hold onto his wheat, he can do that too. In the arguments presented about this huge carry out, I don’t see any comment about whether the farmer or the trade is carrying it. Remember, the US has huge amounts of commercial storage and a nifty little marketing tool called futures that provide carrying charges so hedgers can carry/store grain and the market pays for it. If the market signal is to carry wheat, they do it.
Here in Canada, the market provides incentives to carry canola (carrying charges) and give absolutely no incentive to carry wheat. Yet too much canola gets sold in the fall for cash flow (because we can’t sell wheat) and we carry wheat even though there is no incentive, because we’re told when to ship by the CWB.
If I’m going to pay someone to market my grain for me, he damned well better do a good job. I will look for ways to measure that performance and if he doesn’t measure up, I will fire him and find someone who will. At least I would if I could – but I don’t have that choice.
None of this matters with respect to the CWB. The CWB will not be your salvation against any of these evils.
The thing about comparing Western Canada to the US is that it is the best comparison we’ve got. Don’t be mistaken that we want to sell into the US – we just see a very attractive system, one that shows what we might have here given the opportunity.
For example – so the US carry out will be huge this year. Big deal. Why is that important in the CWB debate? The point to remember here is US farmers are reacting to market signals. THEY are reacting. THEY are doing what makes the most sense for themselves, individually. If the US govt provides some support (misguided as it is), so what? Yes, it may distort markets, but there’s F-all that the CWB can do about it for you.
If the US farmer wanted to clean out his bins and keep selling until that happens, he can do that. And if he chooses to hold onto his wheat, he can do that too. In the arguments presented about this huge carry out, I don’t see any comment about whether the farmer or the trade is carrying it. Remember, the US has huge amounts of commercial storage and a nifty little marketing tool called futures that provide carrying charges so hedgers can carry/store grain and the market pays for it. If the market signal is to carry wheat, they do it.
Here in Canada, the market provides incentives to carry canola (carrying charges) and give absolutely no incentive to carry wheat. Yet too much canola gets sold in the fall for cash flow (because we can’t sell wheat) and we carry wheat even though there is no incentive, because we’re told when to ship by the CWB.
If I’m going to pay someone to market my grain for me, he damned well better do a good job. I will look for ways to measure that performance and if he doesn’t measure up, I will fire him and find someone who will. At least I would if I could – but I don’t have that choice.
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