It's all about listening and responding

[jdepape]

This is fascinating to me.

See if I get this right.

Those that want to protect the status quo (the single desk) are the "true guardians" of the wheat board and all its virtues. Like Allen Oberg, Kyle Korneychuk and Stewart Wells. These guys are like heroes to you.

And those that want to change the wheat board to make it better for farmers - which might mean changing or removing the single desk - are "anti-CWB, "detractors", "nay-sayers", or just plain selfish. Like me, Rolf Penner, Brian Otto, and Jeff Neilson. To you, we're the guys in the black hats.

stubblejumper - here's the thing. right now, the CWB is failing miserably at providing marketing value to farmers. You've gone to my blog - read about feed barley, read about durum. The CWB and its single desk has been a total failure. There's no other word for it. I don't even have to exaggerate any facts to make the point. It's obscene how the single desk has interfered with wealth creation in Western Canada - actually, forget about "wealth". We should be talking about how it has interfered with peoples "livelihood".

So to me, if you, Korneychuk, Oberg or Wells want to stand there and say how great the single desk is for farmers and that it must be preserved, all I can say is, with all sincerity - you're all idiots.

If I've messed up and misinterpreted something and you're not saying that at all, then please accept my apology. But then please help me understand what it is you are saying, because for the life of me, that's what I thought you were saying.

Being anti single desk does not mean you're against the CWB.

It means you're for farmers and the communities in which they live.

[stubblejumper]

I see your friends at the wheat growers cry to their lacky Ritz if anyone calls BS on your BS

[charliep]

Note the discussion seems to focus on single desk selling.

On the listening and responding side, farmers are asking for more pricing alternatives. In responding to farmer requests, should the new board of directors look at moving away from pooling for some of their producer payment options.

Example today on durum. Move to a cash plus program for durum where farmers are paid up to 90 % of a price based on an actual nearby sale or group of sales - not based on the average pooled price over a 15 to 18 month period.

[gustgd]

Stubble

I am one of those friends on the Wheat Growers Who went to Ritz. I asked him to talk to the CWB about making comments during this election period. Candidates especially incumbents should be the ones commenting on the direction that the CWB has taken.
Candidates that would throw their neighbours in jail for selling wheat. ESP. after the dismal job that the monopoly has done for WESTERN farmers, have much to answer for.

All we ask for is a fair fight.
The monopoly uses our multi million dollar propaganda department to only show one side during the election period even though it goes against the directors code of conduct.

These elections should be about direction and accountability.

[craig]

Charlie I have seen little to indicate that the board
can offer proper pricing alternatives. Anyone who
hedges knows that the party on the opposite side
of your transaction needs to accept some form of
risk. The board by it's very nature does not accept
any risk. The other side of the pricing issue is that
producers want a clear set price not this washed
down present alternative where the board always
has an out. Your price might be this but in the end
there are no guarantees that is what you will
receive. For that privilege we can pay for a
bureaucracy that offers nothing to the transaction.
We have seen numerous examples of how this so
call risk holdback often ends up in someone else's
pocket at the end of the day. Ultimately the CWB
has spent a huge amount of money to build a dysfunctional system.

[stubblejumper]

gust let me get this straight. the wheat growers can hire depape but the wheat board is not allowed to call BS to his BS

[jdepape]

Wheat Growers pay me?
I'll have to check the mail!

Stubble - please identify the BS.

[tipsy]

dmlfarmer, you were starting to get some admiration from me for your intellectual defence of the cwb and the single desk. That was until you made the moronic statement " in fact democratically farmers have told the cwb and the government in every director election that they want the cwb and the single desk by voting in directors supporting of the single desk".
You made the statement so I'll take it as your serious, but, you really can't be? They may be some what democratic,as any farmer who wishes may toss his hat into the election ring. But,honestly, you believe the cwb election's are or have any creditable?
Let's see, his heinous Ralphie says farmers are going to vote and have control of the cwb fine. He gives the cwb the task of conducting the election. The cwb gives an accounting firm the task of running the election. Accounting firm answers to and reports back to cwb. Cwb sets loose guidelines for voting. Votes are sent back to accounting firm. Cwb and accounting firm sort Thur and count. Cwb and accounting firm pronounce the winners. Cwb determines which candidates have violated the cwb election act and then determines how the penalties or fines well be assigned, if any.
If you want a democratically,accountable cwb election, let election Canada run the election, clean up the voters list, stop the cwb from campaigning before and during an election and lets see who gets elected for directors.
Presently these cwb election are conducted and have about has creditability as a corrupt Indian reserve election or a banana republic election where the military rules the day.

DO you think a province or the feds could be allowed to elect themselves in this mannner?
I guess as long as you get the result you like its fine and dandy...

[dmlfarmer]

wow, I missed a lot of discussion being gone for a couple of days. But those those who asked me questions, I am listening and here is my reponses

Tipsy, I told bj in an earlier post and I will repeat for you, I too disagree with election process. You are right it is very poorly run. The voter's list sucks. I think there are many infractions to the democratic process that are ignored or overlooked. I never thought of elections canada running it, you have a good idea if it is possible. I hope you push for it. But tipsy, the election is the a mandated process and by ignoring it and not voting, or worse yet by refusing to acknowledge the winners whoever they are and what ever they stand for, as an individual or group, a person loses any legitimacy for change. Democray is flawed and in some cases, like the voters list absolutely stinks, but I believe it is a hell of a lot better than the alternatives.
I also agree the CWB is responsible for some of this mess. The government is also guilty of dirty tricks. Candidates on both sides have done unethical campaigning. As a result, I do not think we are getting, or will ever get the best people to run as candidates to be directors. I am worried ideology is more important for both sides than running the CWB!

Craig: To you also, I repeat I do not agree with voter's list.
But two wrongs do not make a right. A bad voter's list does not justify 3rd party abuses. Both are wrong and both need to be addressed and changed.

In any transaction there is more than price, as jdepape also points out. In a time with abundant stocks of grain, having the ability to seek out new markets is market power. Having a recognized brand gives market power. I am sure you will agree, both Walmart and McDonalds have market power, yet neither of them have premium pricing of their product and both have the power to minimize what they pay their suppliers.

Farm Ranger:
I need to pause and take a deep breath so I don't say something rude.

It is comments like yours that make it impossible for there ever to be real discussion and maybe even a solution some day to the CWB. The CWB does not conviscate grain! Right or wrong, the law in this country says if you grow wheat for food or export or barley for export or malt in the DA, you must sell through the CWB. That is not a secret. So by choosing to plant those crops you are in fact agreeing to market through the CWB. So don't try to blame the CWB and say they are convescating your property. Hell, you can't sell milk unless you buy quota - thank God grain farmers don't have to buy quota. You can't drive a car unless you have a licence, and the car is registered. Or they will conviscate your property! And there are a host of really stupid laws that should have never been made or that are still on the books.

Farm Ranger, maltsters are not building new plants in the US either - which does not have a single desk! Yet they are building in China, which has a single desk purchasing system, and they are building in Russia and eastern Europe which has questionable trading of grains so I will respond there are many reasons why a company choses to build where they do and not just supply, demand, or price as jdpape also says.

Finally jdepape:
I disagree, the the import tariffs do play a role, even if the end product is exported rather than used domestically. And even if the malt was not for export, I submit it is very likely the plants still would be built on the cost due to shipping, labor, and other considerations.

Just as you say there are reasons other than price for maltsters not building in Canada, IMHO, there the CWB does have other market power than priceing. Unfortunately I cannot give you empirical data to back that up as you asked for just as I doubt you could tell me exactly how much money the CWB is costing maltsters, or how much more they would pay farmers for barley if there was no CWB. That is why there is so much difficulty in finding a workable solution. Very few farmers have answers, nobody is seeking the answers; they are only arguing their case.

And no I did not misinterpert your statement about Nobody needs Canadian wheat. Countries do not need to buy Canadian wheat, I agree. I simply added grain companies do not need to buy canadian wheat either.Cargill and Viterra can both access grain anywhere in the world. They do not need to buy Canadian wheat to make a sale. The only organization in the world that is mandated to buy Canadian wheat and barley and must buy Canadian wheat and barley to meet sales committments is the CWB.

[Fransisco]

dml said, "Democracy is flawed and in some cases, like the voters list absolutely stinks, but I believe it is a hell of a lot better than the alternatives."

The alternatives in your view then are what?

Here's my alternative. Everyone gets to sell their grain to whomever they want just like they already do with every other non-board grain. I fail to see what is so terrible about that.


dml said, "IMHO, there the CWB does have other market power than pricing. Unfortunately I cannot give you empirical data to back that up as you asked for just as I doubt you could tell me exactly how much money the CWB is costing maltsters, or how much more they would pay farmers for barley if there was no CWB."

So if you have no empirical data what are you basing your conclusion on? Theory and just what "feels" right?

As to how much more farmers would get paid for their barley if there was no single desk? That ones pretty easy, they would get paid the world price. The same world price that gets paid to farmers in the nearest open market. Which just happens to be the U.S. You've seen lots of easily verifiable price comparisons here already on agriville that show you what it would be.

[jdepape]

Dmlfarmer:

1. Assume you are a Chinese malting company and you assess the malt market in South East Asia and determine that countries like Vietnam and the Philippines are experiencing rapid growth in beer consumption and therefore malt demand. You crunch your numbers and you can make a good ROI if you build a malt house in China (on the coast) and make malt for SE Asia with either Canadian or Australian barley. So you build it and import barley, make it into malt and export it. QUESTION: how does an import tariff on malt IMPORTED into China affect you or your business when you are not importing malt?

2. How much would Canadian maltsters pay for malt barley without the single desk, you ask? Fransisco already said “the world price” and I agree. Here’s a real “empirical” example.

Back in the spring of 2008 when CashPlus was born, the first bid to farmers was equivalent to $5.50/bu delivered to a local elevator. Remember? At the time, the maltsters would have paid $8.00/bu. Because that’s what they were paying. We had just gone through 07-08 and the world was pretty low on just about everything and the price of malt barley was high along with everything else.

Before you go say, “oh yeah, the maltsters wouldn’t pay that much without the single desk there! They’d pay only a small premium over feed barley to get the malt barley.”

The problem with that idea is timing. Maltsters buy barley when the brewers are buying malt. They go back-to-back. So when brewers are buying in the spring, the maltsters have to come up with a price – and ironically that price has little to do with feed barley. In the spring the maltsters are “buying acres” – they compete with the highest return crops. In 2008, that was spring wheat and canola. In order to buy acres, they needed to show a decent return for malt barley as compared to those two crops. BUT – with the added complexity that they may not make malt, so they have to figure in the chance it might go feed.

In 2008, the maltsters were furious and frustrated with the CWB. In their view, the $5.50 price wasn’t buying them acres. Since they were paying $8.00, they wanted the price to farmers to reflect that. Through strong language negotiations, the maltsters finally got the CashPlus price up to $7.00 later that spring.

If you have a problem with this idea, go talk to Anheuser-Busch in the US and ask them why they have malt barley basis contracts that are based off Minneapolis spring wheat futures. (When wheat futures rally, so does the price of malt, staying competitive.)

You want solutions? Without the single desk in Canada, I see a malt barley sector that contracts for barley by variety early in the year just as they do in the US. The prices are based on competitive returns per acre when compared to other crops (not feed barley). You just might sign malt barley basis contracts based off canola futures. Feed barley prices will have more to do with domestic and offshore feed barley prices and corn prices than malt barley prices.

3. Cargill and Viterra in Canada need your wheat. Remember the argument that the private trade works on a margin? Well, they do. And the grain handling business is largely a fixed cost business – it can be as much as 95% fixed costs. That means the more grain they can pump through the elevator, the better. If an elevator (or an elevator division) does not handle enough grain to cover those fixed costs and make a contribution to variable costs and make a profit, the people involved have some explainin’ to do. And if head office doesn’t like your explanation, they will find someone else to fill your shoes. So yes, they certainly do need your grain.

[jdepape]

One more thing, dmlfarmer. You were answering farmranger on this but I want to weigh in:

You say maltsters are not building new plants in the US. Correct – since the global economic meltdown of 2008, malt demand has dropped off. Over 20 projects around the world were either canceled or put on hold.

The last big investments in malting in the US are:
• Cargill in Spiritwood, ND (120,000 tonne upgrade in 2008)
• Busch Ag in Idaho Falls, ID (350,000 tonne upgrade in 2002)
• IMC in Great Falls, MT (700,000 tonne facility built in 2003)
• Modelo, Idaho Falls, MF (140,000 tonne facility built in early 2000s)

China’s additional capacity (some of which I talked about earlier) was built in 2008-09 and totaled about 1.5 million tonnes.

China does not have a single desk buyer of malt barley. COFCO is a government buying agency but many malt operations are owned by multinational companies and they buy direct.

Just helpin' you get your facts right.