AAFC Investigation into Farm Income Crisis

[TOM4CWB]

Vader;

There are none so blind as those who will not see.

The CWB has every marketing tool I have, yet the PRO keeps dropping for CWRS #1 13.5, on a year of VERY short supply of high quality wheat world wide.

In real terms the CWB PRO dropped AGAIN in January 05. A CDN$ drop of 4 cents is equal to an increase in value of 5%, plus a big drop in ocean freight on top since December 04, leads to well over a $15/t drop since the last PRO.

We are only a few months into the marketing 2004-05 year.

So did the CWB hedge the CDN$ and already encounter a large speculative loss?

The CWB directors need to come clean and be honest Vader.

You are offended?

PLEASE.

STOP the carnage in our local "designated area" communities caused by the single desk.

The single desk is sucking the faith, hope, and love out of our industry.

The truth is comming out in Ontario now about wheat. Allowing farmers to work together co-operatively will ALWAYS be better than what the "single desk" can provide.

Dispair, Intimidation, and Alienation are the trade marks of the new CWB since 2002.

I would like to know; did Ralph Goodale officially sanction the increased use these tactics, or did CWB Directors and management create this concentrated deceptive/fear force of their own choosing and on their own authority?

[Vader]

Tom, with a world record crop of 615 MILLION tonnes and with Argentina setting the bottom end of the market at $107.50 per tonne what kind of a premium would you pay over Argentinian wheat if you were in the market for milling wheat today? I want to be HONEST and take off your farmers hat and pretend that you were actually a miller with sharehoders to be accountable to.

[Vader]

Hedging the Canadian Dollar? That is what a lot of people kept saying the CWB should have done. Over and over people took issue with the CWB not taking some action to manage the risk of the dollar. They said "the dollar is going higher.... it's going to 85 cents, .... it's going to 90 cents, .... it's going to par".

The CWB has always said that would be pure speculation and refused to do that. The risk of dollar movement is hedged as soon as a sale is made to eliminate the potential erosion of value between the time of the contract negotiation and the payment. The CWB does manage risk in that fashion. But no Tom the CWB did not speculate on the dollar and any change in PRO that you see today is not a result of taking the wrong position on the dollar.

[Vader]

Tom you said "STOP the carnage in our local "designated area" communities caused by the single desk.
The single desk is sucking the faith, hope, and love out of our industry. "

The carnage in the designated area is the same as the carnage in farming communities around the world. It is the same in Kansas. It is the same in the Ukraine. I think that ianben would say it is the same in the UK, and I believe it is the same in Australia.

The problem of low commodity prices has nothing to do with the single desk. In fact the single desk is the only power that farmers have in the face of corporate consolidation.

I read an article about the beef industry that compared it to an hourglass laying on its side. On one side you have this vast number of producers. On the other side you have the consumers. In the middle you have this restriction which is the multinationals. The only way to get your product from the producer to the consumer is through the meat packers. Throughout the BSE crisis consumers have seen virtually unchanged prices in the supermarkets. The restriction in the middle steals all the profits away and chokes the life out of the producer.

It is the same with the grain industry. It is virtually impossible for the average producer to move his product directly off farm to the consumer. Certainly there are some exceptions but for the most part it would be impossible for farmers to move 615 MILLION tonnes of wheat directly to consumers and bypass the multinationals completely. The CWB empowers farmers by providing that conduit between farmers and their customers. The CWB covers its costs and then returns everything else to the farmer. The CWB has no obligation to return a 20% margin to anonymous shareholders such as mutual funds and the stock market.

Shareholders can be as ficle as anybody. Tell them that their stock will not perform as well as predicted and they become very vindictive. They will drive the company into the hands of its creditors. Look at the prairie pools. I am not saying that they were the best managed companies out there but slowly and surely they are being driven into the hands of the multinations. They will march to the tune of the multinationals come rain or shine.

Tom, this is the world you would have us live in. The beef industry has lost billions of dollars in Canada in the last year and a half. You would have us think that this is a workable model. To hear a farmer preach about a free market brings to mind the phrase "divide and conquer". The grain companies should be paying you for all the work you do in supporting their agenda.

[Vader]

Tom, you said "Dispair, Intimidation, and Alienation are the trade marks of the new CWB since 2002."

You must be speaking of all the facts and figures that are brought forth at meetings and in publications. You want the truth? You can't handle the truth. The CWB represents the power of the farmer. In stead of dispair there is hope that we can brand our product as being uniquely Canadian with descerible quality. This is not the corporate agenda. Look at the US system. Farmers in the US do not belive they can ever distinguish their product they way we do and would rather drag us down to their level.

Instead of intimidation there is encouragement. We can be encouraged that there is another agenda. The whole world is not on side with the corporate agenda. It is not every man for himself. There is in fact some safety in numbers. If the numbers are together and not being scattered by the wolves.

Instead of alienation there is cooperation. We agree not to go head to head in the international arena with each other in a race to the bottom.

Perhaps some day farmers in the Ukraine and Argentina will rise out of that rut and begin to erase the inequites they suffer relative to their urban cousins.

Perhaps one day the European and American farmers will have to also join in when their governments find their taxpayers unwilling or unable to continue the subsidization of 80 percent of their net farm income.

Stating facts is not fearmongering. Namecalling is!

[Incognito]

Vader:

I dont want to get in the middle of this private scrap...but....this has been occupying too much of my time this weekend.


I've yet to see a grain company move wheat from Churchill or Baie Comeau to fill a ship in Vancouver.Is this accurate?


Why are the directors not coming down on someone for the demurrage paid in the last two months? 4 million in one month? A sales or transportation Director in any other company would be punted in a nano-second.

or...

Where are the saving in tendering going when the bids for high grade wheat are 4.00 to 6.00 over?

Who screwed up and who is accountable?

Or are the mistakes averaged out over the life of the pool and everyone lives on.

Its like OBLIVIOUS - the game show you don't know you are on.

Transparency, accountability and fiduciary responsibility to farmers...or is that asking too much?

[Incognito]

Geez. I am getting as bad as u two posting to my own post:

Hedging the CAD dollar:

1 million tonnes of wheat sold to the Chinese. The value of the "deal" was said to be 250 million in an MOU.

Is the MOU hedged? is the sale hedged? and since no delivery dates were set, how is the risk managed?

Real companies manage risk to protect a margin. Since there is no margin to protect at the CWB, I can see why some view (outside directors) it as a spec move.

[freenorth]

Yo Everest did you catch all that.

Man oh man these guys need something more relaxing to do on Sunday afternoons.

This has been most interesting but I thought the topic was CAISP and
the message I get is don't rely on the government espescially if you live
in Saskatchewan, and that applies to the wheat board too.... who
really believes that there's more upside then downside to #4 HRS and
feed wheat in the latest PROs.

[TOM4CWB]

Vader;

A fellow I once new, truthfully, in good faith, said this:

"The CWB "Single Desk" is a FRAUD.

This was a statement made on principal, based on fact, and rings true on this very day.

Vader read the Sparks January 2003 study on CWB Benchmarking and the performance of the single desk.

It proves beyond a reasonable doubt, that Rod Flaman was absolutely right about the CWB fraud we must put up with today.

I.M.H.O., the CWB has an obligation to market my/and my neighbour's grain, in a manner that respects our property rights. In fact the by-laws of the CWB require this of CWB Management/Directors.

When no-cost export licenses are avaliable, in a manner simular to 1988; movement of nongraded grain is allowed to provide a measure of accountability as 1988 allowed into the export market;

I am responsible to those who I farm with, and am responsible to live with the decisions I Make for my families farm. If I make a mistake I get fired.

Why exactly should the CWB be any less responsible or accountable?

Explain why exactly the CWB will not allow me to be responsible for my own decisions... especially when these decisions I need to be responsible for; will keep market prices up higher than the job the CWB is doing on the marketing side?

[Vader]

Incognito,

In general terms the CWB staff works to maximize returns to producers. What may look strange from the outside usually turns out to have a logical explanation. In this case there is old stock which is out of position which is required to raise protein levels of new crop to satisfy customers who require higher protein levels than are generally available in the country. The decision to relocate stocks is done based on a business case with a positive return to producers.

These are operational matters which are generally left to staff unless there is an overall strategic issues to be dealt with as part of the long term policy.

The CWB has been earning more despatch than the demurrage being paid over the last year or so. In the past when demurrage was incurred as a result of inadequate service from the railroads the CWB has launced a level of service complaint which resulted in signifant payments from the railroads to the CWB.

Tenders generally make money for farmers but depending on supply and demand there is some risk that tendering can cost the CWB money. Nothing ventured, nothing gained. Farmers and the CWB benefit from tendering.

[freenorth]

Vader:

If Farmers and the CWB benefit from tendering why are we down to a maximum of 20% tendering instead of a minimum of 50% tendering.
How conveniently the CWB jumps from one song to another so inconsistently and smoothly.

Who really believes your making money moving grain from Churchil
to Vancouver? It's called CYA and I think you know that it means " cover your _ _ _!!! the CWB is doing it because it has to. Any other entity who makes mistakes excepts responsibility for their errors and it is reflected in their earnings statement, the CWB's errors are buried in the pool accounts and averaged (another word for distorted) into the producer's returns.

And you call these PROs market signals yeah right....
After the grain is committed do you think they'll go up or down. Oh but
now you'll have these penalties to help you out when in November there
was no penalties. Only the CWB is allowed to change the rules whenever
it works to their advantage without consequence because it is without
competition. Only competition drives efficiency.


How fast is the CWB planning to completely delink from the government.
One day the future will be brighter.

[Vader]

Freenorth,

If the grain is worth more money in Vancouver than in Churchill and you can move it then that is what you do. The mistake (if you can call it that) was in predicting that there would be a normal grade pattern. Each year most forecasters will predict a normal harvest with normal volumes and grade patterns until reality tell them differently. Then you deal with reality.

The alternative would be to leave the pipeline empty and leave all the grain on farm until a firm sale is made. Now that would be a big mistake.

20% tendering is bringing in as much money as 50% tendering did and the risk of having a big player "buy" all the business has been reduced.