CWB vs. OWPMB and Ausies

[TOM4CWB]

Incognito,

I find it disturbing the lack of transparency on wheat price reporting and “offers” by the CWB.
Here is the CWB story:
PRO "Commentary
2004-05 crop year
Wheat
U.S. wheat prices have fallen since last month. Although exportable supplies from Argentina seem to be drying up, the EU has increased its wheat export subsidies and winter wheat crops in the Northern Hemisphere are generally in good condition. Increased farmer deliveries and slowly improving logistics in the U.S. have caused export premiums to soften slightly."


Prairie Average farmgate (I extracted an Approx. average)PRO price;
1CWRW $2.85/bu
1CPS Red $2.95/bu
1CWRS 13.5 $4.20/bu
1 CWRS 11.5 $3.75/bu
70% of the “designated area” wheat gets this price:
3 CWRS 13 $3.40/bu
3 CWRS $3.15/bu
4CWRS $2.20/bu
Canada Western Feed Wheat $1.88/bu
(50lb/bu or more)1 Canada Western Feed Barley $1.30/bu

On the other hand, here is the Ontario Picture:
Wheat
Ontario Pool A wheat prices was sharply higher last week. The Ontario wheat board's (cash) landed basis price for soft white was estimated at C$4.31/bu Friday, or $158/tonne, 38 cents higher on the week. Hard red winter (Pool B) and soft red (Pool E) were 36 cents higher at $3.93/bu, or $145/tonne. Pool C Hard Red spring gained 32 cents to $4.43/bu or $162/t.
Harvest 05 (cash) landed basis price for soft white was estimated Friday at $4.20/bu, or $154/tonne, up 36 cents/bu. Hard red winter (Pool B) and soft red (Pool E) were 36 cent higher at $3.98/bu, or $146/tonne. Pool C Hard Red spring was up 36 cents at $4.29/bu or $158/t.

After listening to Bruce Webster's presentation at the WBGA/WCWGA Canmore convention last week, It is important to note Ontario Wheat's Democratic Governance structure. OWPMB structure allowed and encouraged radical marketing change, against conventional wisdom. The result is certainly refreshing when we read the marketing results.

CWB Governance assessments and review.

The OWPMB democratic model is well worth very close scrutiny in application to CWB structure.
Ontario Wheat growers leadership (led by the grassroots) did what was required, in terms of marketing options to maximize returns to growers.

“Designated Area” grassroots growers in turn we must implement, at the CWB, similar reform without prejudice to attain similar results.
60% of delegates in a region elected by volume;
40% of delegates in a region elected by numbers of producers;
100 delegates at the CWB (OWPMB now operates this way), they pass resolutions and decide policy at their annual meeting.
10 directors elected yearly, they get turfed if the don’t perform.
$1.50/t on all wheat grown and marketed… no mater where it is sent, a stable admin base for OWPMB (the CWB could easily do the same). Bruce Webster is projecting big increases in wheat acres… it is one of the most profitable crops in Ontario today.

Isn't it time we pulled our collective heads out of the sand?

Australia has implemented the Grain Licensing Authority and big premiums were created in allowing premium sales outside the monopoly... for everyone!

Internet Site: www.pgaofwa.org.au

Recently US Wheat Associates brought the following to our attention:

http://www.uswheat.org/wheatLetter/doc/71E379BFC7F4C69885256F96004FD18E?OpenDocument#

Australia is pulling their heads out of the sand and learning the one thing we know about Monopolies:

They are created and maintained to protect the status quo.

Who, I would like to know, is happy with the CWB pricing system signals and returns... quoted above?

[Incognito]

sorry Tom. I have a two year old who thinks its time to play. I'll get time tomorrow.


Best,

[Incognito]

Wheat market shrugs off news from around the world

Mar 1, 2005 9:40 AM
By Kim Anderson

Potential changes in the government wheat program that are being discussed in Washington D.C., and the media should not impact 2005 wheat prices.


The market has digested a lot of information lately and wheat prices continue to trade in a narrow price range. Nearly all the information indicates that wheat prices may struggle during the 2005/06 wheat marketing year.


Current market prices in central Oklahoma and the Texas panhandle are about $3.20 and the Texas gulf price is $4.03. The corresponding KCBT March contract price is $3.34 and the KCBT July wheat contract price is $3.10. Wheat may be forward contracted for 2005 harvest delivery in central Oklahoma and the Texas panhandle for about $2.75.

United States winter wheat planted acres are predicted to be 4 percent less than last year. Hard red winter wheat planted acres are predicted to be one percent less and soft red winter wheat acres are predicted to be 19 percent less than last year. Production is expected to be slightly less than last year because lower plantings are expected to be partially offset by better crop conditions.

Canadian producers are expected to plant 3.1 percent more wheat than in 2005, and Chinese wheat plantings are expected to increase 4.5 percent. To promote increased wheat production, Chinese officials raised wheat prices. Wheat crop conditions in China are reported to be better than at this time last year.

From 1997 to 2003, Chinese wheat production declined from 4.53 billion bushels to 3.18 billion bushels. China’s 2004 wheat production of 3.31 billion bushels was essentially the first production increase since 1997. Increased planted acres and better crop conditions imply higher production in 2005 than last year.

The Australia Wheat Board’s projects that the Australian Prime Hard wheat price for the 2005/06 marketing year will be about $3.67 per bushel compared to about $4.10 for 2004/05 harvested wheat. The AWB suggests that larger world wheat production and stocks and little expected change in world wheat demand will result in lower world wheat prices.

Argentina’s 2004/05 marketing year exports are 87 percent higher than at this same time last year. Argentina is reported to be exporting wheat for about $2.95 per bushel FOB compared to $4.03 for U.S. hard red winter wheat at the Texas gulf. The USDA predicts that Argentina’s 2004/05 marketing-year wheat exports will be 11 percent higher than last year.

Wheat production in Eastern Europe and the Former Soviet Union countries are expected to be about the same as last year. Current production estimates indicated that U.S. and world production may be slightly less than last year.

A factor that has and will impact wheat prices is corn. U.S. corn stocks are the highest since 1992. Also, Asian Soybean Rust may result in soybean acres being planted to corn. Relatively low corn prices have a negative impact on wheat prices.

Potential changes in the government wheat program that are being discussed in Washington D.C., and the media should not impact 2005 wheat prices. First is that no one knows exactly what changes will be implemented and second, any changes will not be implemented until the 2006 wheat crop.

One bit of positive news is that the above negative price factors are factored into wheat prices. Relative to the $2.75 now being offered for 2005 harvested wheat, there is more upside price potential than downside risk.

The current harvest price offer is the same as the $2.75 average government loan. Thus, lower prices will be offset by larger loan deficiency payments. There is little reason to consider pricing 2005 harvested-wheat. Watch the harvest price relative to the expected 2005/06 marketing-year average price prediction. The marketing-year average price will provide an indication of whether to sell wheat at harvest or to store it.

[TOM4CWB]

Incognito;

I can't see premiums in any CWB prices now being offered... or in 05-06 offers.

So what are we gaining by having the most restricted, least market oriented market system on the planet?

Value added investment is simply NOT going to invest large new capital into a restricted system with the CWB sledgehammer ready to swing at them because of the Monopoly.

Pet Food is a good example.

At Morinville Alberta we have a new world class plant... working at Capacity. No CWB. No Problem.

ADM/Conagra have milling tied up in Canada... and the CWB is their ace to prevent competition.

Kind of like fishing boats on the east coast of Canada. They are only allowed to be 65 feet long to slow down fishermen from catching fish too fast! In an era with no quotas... to now when every pound is counted... we still have the 65ft restriction... boats much wider and higher to get efficiencies of scale...

And so we have 64'11" Canadian fishing boats... the only place on the planet...

And it is literally killing our fishermen; because longer, narrower, lower boats are more stable in the open North Atlantic... but it is not allowed.

Kind of like the CWB and "designated area" farmers!

Only in Canada you say... actually only in "designated area's" within Canada!
What a pitty!