CWB Price ' WHAT is a PREMIUM'?

[TOM4CWB]

Charlie;

'It [the CWB] may sell at premium prices but it also
may discount to make sales'

When the CWB 'sells' to Japan... is it actually 'extracting' a 'premium'?

With all the comments about the US wheat prices being 'UNCOMPETITIVE'...

This does not ring true.

I must point out THE US is simply holding the 'premium' price line.

If consumers don't want to buy... from a premium market... they can get less service... delivery when they must store it and incur more costs... and accept lower quality.

Service costs money. If I hold & sell 1tonne of seed... in seeding season for pickup when needed... this costs more than 50t off the cleaner when I cleaned the seed.

Of course... all things being equal... the 1 tonne will need to cost the consumer more.

Isn't this what the CWB does?

Selling to flour mills... letting these mills prebuy when farmers wouldn't sell... all have 'costs' that detract from the CWB 'premium' markets.

In the end... our price shows, we recieve LESS than a grower in Montana.

SO... Charlie... where is the premium price if it does not show up on the bottom line?

[charliep]

Not sure what a price premium is either in a commodity based bulk
handling system?

What do Canadian farmers do to justify someone paying a premium? As a
seed grower, you can meeting farmers agronomic and yield requirements.
Organic farmers can provide value to customers in meeting their
needs/desires. What does a conventional farmer do to justify a higher price
or premium if like?

If a western Canadian farmer does the right things to meet market needs,
will they be rewarded other than commodity based grade and protein
payments? Similar questions on the marketing side. Are their rewards in
trying to time sales during the year?

We can talk premium all we want but at the end of the day, a farmer
receives an average prices based on 15 to 18 months of commodity based
sales. Things like Japanese wheat sales are shared with everyone
regardless of grade - it is called single desk benefit by supporters. Single
desk/price differentiation also has a cost and that is shared with everyone.
The performance measure the CWB board of directors uses to judge
operations is their ability to achieve the best average price based on sales
pace during the whole year. Single desk and premium price is an
oxymoron.

To your other posting, the CWB has become more focused on managing its
own risk. All the changes mentioned were put put into place to do this.
The CWB does not manage farmers individual risk except by providing
opportunity for an average price. All programs and contracts are developed
with this concept in mind - single desk/price pooling first and most
important.

[cityguy]

So the pro-choice group define premium as a Canadian delivered elevator price being higher than a US delivered elevator price. The anti-choice group call a premium as being something better than a "world average" price, which will include high priced US values and cheap Russian/Ukraine/German/French/Argentine values.
Don't know what the US spring wheat carry out will be this year but let's say it's 250-300 milllion bushels out of 500 million production. The US will carry over 50-60% of their spring wheat crop. Given that sort of a carry out it's hard to claim they have "market clearing" values. Imagine if the Canadian canola crop was only 9 or 10 million tonnes and we carried over 4 to 6 million of it? Maybe what the CWB should do is accept X tonnes at a US type price - call it 5 million tonnes, then accept every next 1 million tonnes at $5.00 discount to the pool. Fact is the the US farmer chooses not to clear out his wheat at these prices. (and chances are the same is happening in Australia as thier carry out's are going to be growing, potentially to a record high level this year). Expecting the CWB to market the entire wheat crop, clean out the bins, all at a premium to US values is a pipedream. Of course, the easy answer is "let me do it myself and whether I can or can't is up to me". That's fine, but at the end of the day the CWB gets loaded up with wheat and are measured against an impossible goal. In the mean time the politicians - all of them - sit on the sidelines and don't let people run their own business, and leave rules and regulations in place that at best can be described as equally unfair.

[TOM4CWB]

Charlie,

We have other examples of premium grains... that attach a 'premium' to the price paid.

Nexera... claims to be one... CSCO... specialty oil Canola. DO these crops actually pay a 'premium' when the base yield is lower? Marketing options and flexibility removed?

The CWB is no different.

The CWB has forgot that the risk they place upon my farm... COSTS real $$$.

Since there is no competition allowed... and the monopoly insures they place the maximum risk possible on my family farm, possible; the natural competitive advantage we had in growing wheat is eroded by the day.

The pool in the past spread and shared the risk... not increased uur risk.

The 'premium' service the CWB systems provided 'designated area' grain growers in recent years... has been caught up and extinguished by left wing politics.

[TOM4CWB]

Cityguy,

The real problem is simple.

Personal responsibility is the ONLY option for a rational marketing system. The claim that the 'single desk' extracts a premium is a hoax.

The only reason the CWB keeps chanting the hoax... is to justify the power it commands... which can not be ethically justified given the facts.

If the grain grower wants to hold wheat stocks in the 'designated area' they can. EXACTLY the same as the US grower in Montana.

The longer the CWB keeps spending my money... claiming they will pull a rabbit from their hat... when any sane grain grower can see only the rabbit droppings... come out...

The more offended commercial growers become!

[Choice2U]

Typical socialist/communist attitude "What is yours is ours".

[cityguy]

When all is said and done I don't get it. You have a perfectly rational argument that says you know what's best for your situation. You have an argument that probably recoginizes that the world market can't absord all of the Canadian exports at US equivalent prices, but that if Canadian prices do slip to a point that people aren't prepared to sell, then that should be their choice. The CWB is a politically created institution and there are conservative governements in Alberta,Saskatchewan, and Ottawa, yet no one changes the institution. Guess the question is why aren't there more people / votes forcing the governments to change the institution. Politicians will simply follow where the votes are. No one in eastern Canada cares about the issue so what are the western politicians scared of.

[parsley]

Yes, cityguy, that is the question I asked myself quite some years ago, and went a-hunting.

So you tell me, with all these stars aligned for lighting up the path of marketing choice in the West, what could possibly be the cause of feet dragging?

Yes, well. Pars

[cottonpicken]

In all the confusion i cant remember if i fired five
shots or six,any reverence to ****ry imports being one
of our "guys".

[cityguy]

I'll ask a dumb question. There are directors elections coming up in the fall. Is there going to be the typical one anit-choice person and 5 pro-choice all running off against each other. Why can't the pro-choice side at least agree to run only one person? and don't get into whether or not the election is a farce etc. Even if it is it's probably the quickest route to change if managed properly.

[parsley]

"hunting" in obscure financial records can highlight some very strange and unusual alliances and relationships.

[parsley]

A dumb question for you cityguy:

Let's say the choice candidates win three more seats. Is choice guaranteed? iow, how will the Minister instruct his appointed directors to vote?

[parsley]

Farmers often speculate on who will pocket lots of money when grain prices rise. Rightly so. But maybe the more interesting question is: Who will pocket more money if grain prices are kept low. Pars

[silverback]

The alberta government at some point decided to become a bunch of little joe clarks and try not to ruffle the feathers of the progressive members of society. The only thing they have done is to ensure we progressively get lower prices than we deserve.

Some of us are trying to ensure that some future government might take up the fight and free us of this albatross. Of course the whining babies from Sask and Man. would cry that the big bad grain companies will swoop in and destroy us all.

(Funny, we don't seem to hear much from the supposed pro choice directors anymore either)

[vvalk]

Cityguy. The problem is that the east does care ALOT about the CWB. As long as the CWB exists then so does supply management. Better to have the CWB in the cross hairs then their beloved supply management. Why do you think the Bloc votes in favor of the CWB in all cases. Its their first line of defense.
Second as long as there are 50 60 or 70 thousand voters voting in the CWB elections when maybe 7000 farms do 85% of the production, a vote will never work. Never mind that you shouldnt be voting on a rights issue anyways.