CWB Price ' WHAT is a PREMIUM'?

[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.

[parsley]

An exceptionally well-expressed view, vvalk, as well as accurate. Pars

[cityguy]

Not going to argue on the vote. Would say that the "Shareholders" with a share being a tonne of delivery should determine the direction of the board. That being said, the voting system for this coming fall is what it is. So I ask the question again, are the pro-choice people going to yet again watch their "votes" get split 5 ways and watch the anti-choice walk right up the middle?

[TOM4CWB]

Cityguy,

Goodale/NDP/Bloc still control the CWB's destiny... as long as a minority Parliament in Ottawa.

Lawyers/Courts stop Minister Ritz from doing more... backed by Supply Management / CFA.

Provinces can do nothing to stop CWB as the is a 'Trade and Commerce' constitutional issue that CDN Courts ruled many times is federal jurisdiction. Alberta has challenged Ottawa powers many times... and lost every time. Take GST. Direct taxation is the exclusive jurisdiction of the Provinces. Yet the courts give the power to the feds without constitutional authority.

I would be surprised if you didn't already know this.

AS long as Ottawa is Minority Parliament... Goodale prevents any real change.

Honesty and transparency would be a nice change... and a logical expectation.

In the 'designated area' we are free;


Free to do what we are told to do by eastern Canada.

But we are true Canadians... wouldn't hurt a fly... torch a police car... or even demonstrate any more.

We made our point in 1996... 14 years later the CWB still is a monopoly in the soul of Canada... thanks to Goodale/the Liberals. THe lasting legacy he is proud of!

[TOM4CWB]

Cityguy;

Preferential Ballots do not split votes.

Goad us on.

Oberg wouldn't have been elected the first time in district 5 if you knew what you were talking about. Oberg does not even live in District 5.

[charliep]

I highlight the 2010 CWB survey results and differences in attitudes
between age groups. Things will change over time.

Whatever party is in office in Ottawa, the most important issue is
governance and the establishment of some form of contingency fund.
Regardless of your view on single desk versus open market, this is a key
issue to CWB survival.

The original posting was about premiums but I note that the
$240/tonne CIF sale to the Saudi was likely at a discount to current
domestic feed market when backed off to the prairies. We don't the
actual price and maybe the above is German wheat/CWB sold for a
higher but work the price to prairie position. The issue is the CWB can
make sales as a single desk without the discipline of having to go the
market to source supplies from prairie farmers. US industry couldn't
make this sale because they couldn't source the grain via contracts or
hedge it. They had the discipline of the market.

[cityguy]

I'm going to leave the politics to the experts. That stuff is well beyond me. What I don't get is if the answers are so obvious then why hasn't change happened. The political "tactics" in play from the pro-choice crowd don't seem to be working, so what different tactics are you going to take? Or are you just going to be doing the same thing over and over again.

And sure it's fair to say the Goodale tied this thing up in knots, but at some point the Conservatives and have to step up and take responsibility. Put the changes they want in front of the house and date the opposition to strike it down. For a group that's supposed to be famous for playing hard ball, they're not. That's all i'm going to say on the politics of this.

As for premiums, no one entity could be expected to sell the entire wheat program at a premium to US values. No doubt some individuals could always sell at a premium to US and would presure that some would never sell at a premium to US values. All you guys are asking for is that individuals have that opportunity/responsiblity.

[charliep]

So what are the solutions given the results of the 2010 CWB survey?
I assume the CWB is not meeting the business needs of younger who
growing their businesses and have higher debt loads - including
cash rental and crop share payments to older permit book holders.

On the business side, what would the Saudi sale at USD $240/tonne
CIF (landed Saudi Arabia port) mean for a price based at a local
Saskatchewan elevator. My math is under $4/bu and would
demonstrate the logic as to why the US trade passed - too low a
price.

The logic for the sale could be (don't know) end Sept. and early Oct.
shipping - perhaps even out of Churchill. Would fit this shipping
period and CWB priority on Churchill). The price seems low in a year
of western Canadian wheat exports of well under 10 MMT.

[cityguy]

Think you're right at sub $4.00 and we don't know when they'll be shipping, but doubt if it's Churchill as that's usually reserved for old crop grain. Could very well be that the CWB is simply looking at doing bits and pieces of non-high protein "price business" just to have it on the books. sell a couple of 12.5 protein cargo's at the "market", in this case the market was defined by German wheat as they did 16 of 18 cargo's. Right now they have virtually nothing sold (think the PRO said 5% of their expected program and chances are you're correct that their export program is less than 10 million). Problem of course is that whatever "premium" markets the CWB claim to have developed over the years don't take protein as low as the Saudi's. Have to figure the CWB is scrambling around trying to figure out who they're going to sell 12.5's or lower to again this year. They may be figuring better to do saudi rather than bangladesh or iraq or iran. So they do 100,000 tonnes, it may be cheap, but it's the market. Just don't go blow your brains out on the volume side. trouble is think that consensus on this site was that they should have just given it a pass, knowning that the US wasn't in play.

[charliep]

Perhaps comes down to the execution of a sales plan based on single desk
having access to all supplies and the discipline of the open where every sale
has to hedged and the ability to attract supplies via offering farmers a fair
price/allowing them the choice to deliver. No open market participant could
afford to short the market in the environment but the single can because
they have exclusive access to all western Canadian farmers wheat.

At some point, you will have to share the logic of the CWB board of director
driven sales pace model and use as a performance measure. What does it
tell farmers? How does it measure performance? For that matter, how does
the CWB develop the prices uses in the annual report performance measures?
When the CWB wins tender like the Saudi one (I assume because it is the
lowest price), is this a plus or minus in the price based performance measure
used in the annual report.

I note I was reprimanded for moving the debate to numbers and not as an
issue of individual freedom for farmers to sell their crop as they choose
including multiple buyers/competition.