Milling Oats vs Milling Wheat

[TOM4CWB]

Charlie;

I see this on DTN;

"Concerns about the quality of this year's oat crop will be enough to keep values above C$2.00 a bushel," an end-user commented. He agreed that a lot of companies have been trying to source top grade oats to meet milling commitments.
"The supply is there, but the trick is now getting it out of the hands of the producer," the source said. He said producers have been extremely disciplined in terms of delivering oats so far, and there is likely little chance of that changing anytime soon.
The end user also pointed out that companies will likely have to raise their cash bids further in late winter/early spring in order to pry supplies out of the hands of producers. "That could mean cash bids as much as $2.50 a bushel at some point," the source acknowledged."


My question is, to "pry" Milling Wheat supplies out of the hands of producers, what must the CWB do?

NOTHING.

This oat situation according to CWB Monopoly supporters is an impossible marketing situation.

Isn't this what the CWB and you insinuate Vader?

Why should Milling Oats and Wheat be different Charlie?

[agstar77]

So who is forcing you to sign a Milling wheat contract?

[JACKFLASH]

Agstar77:
I think Tom is just pointing out the dramatic change in oat prices historically since oats were taken out of control of CWB.
We always grow oats on the farm. I think back to the 70's when we would be selling oats of good quality and getting 98 cents/bu. and maybe another 30 cents.
Now you can bank on 2.00/bu, by forward pricing. Did I mention picked up also, and there is always a possibilty of higher prices, and it is now happening with a higher frequency.
This year I grew more oats than wheat an think that will be the norm from now on.

[TOM4CWB]

agstar77;

In western Canada, in the "designated area" the CWB Act states it is against the law to contract or sell my wheat to anyone else.

So agstar77 I have no choice to sell to anyone else. Milling wheat is the CWB's exclusive product, I must sell it to the CWB.

Now, how do I and other producers force the CWB to pay more when it is the only place I can sell my Milling Wheat?

A good example of CWB monopoly sickness?

Selling flat price into the next crop year. Some farmers actually figured a profitable way to assure increased value.

The Carry in the market was even too much to share with individual farmers who chose to take on risk and reap this reward.

These people in Winterpeg need to get a real life and be responsible for the grief they cause. Saying market choice will instantly destroy the market, it will only destroy fools who market with no self-dicipline.

Most of those folks were gone long ago!...

Except in Winterpeg!

[agstar77]

98 cents in 1975 equates to about 3.50 in today's dollars. So 2.00 for oats is no thrill and really doesn't mean the open market is giving you a premium.

[parsley]

agstar,
What do you get for HRS wheat today? (That price has no room for any premiums to be made either as I see it).
How does 2005 wheat price equate to 1975 prices?
(You seem as if you might be the kind of farmer who's kept tab.)

On the other hand, I do see the oats market holds promise for premiums.

Some market somewhere wants your product because it suits their needs and because the deal really works well for both the buyer and the seller. Maybe the proximity, or the terms, or co-trucking or because of good karma.

The Wheat system destroys that possibility.

Parsley

[agstar77]

One of the reasons you get so called premiums in oat, is the relatively small volumes oats are grown in . Oats are not grown as widely as is wheat. It is hard to say you are getting a premium when you are selling oats below your cost of production. We are taking a beating on wheat as well, but because volumes are so much larger it would be difficult for individual farmers to capture any premium from an individual buyer.

[parsley]

The amount of wheat grown in Canada has been shrinking, shrinking, shrinking.

According to you, smaller volumes to market should yield higher prices, right?

Has that happened with wheat?

In the same light,
The CWB markets less and less barley.Look at the barley pools.

Has the price of barley marketed by the CWB in 2005, gone up, as the volume they market decreases?

Or does your observation only apply to oats?

[JACKFLASH]

Ag star: Do you want a ladder so you climb down off of my back!!!!!!!!!
Are you an oat grower?
Do you consistently grow oats 40-44 lbs/bu?
Do you know how oats are graded using the U.S. winchester system?
How do you know my cost of production?
There is a science in growing good yielding heavy oats.
Don't equate prices to today's because all commodities are undervalued.
Oats on my farm have been a strong cash flow crop. Grow wheat and be mad.

[melvill]

Whoa, hold it. These are forums for discussion only, not blasting. Yes, it is nice to vent once in a while. We all seem to need it, but let's keep it impersonal. Agriville has the power to permanently eliminate people from the forums and, in the past, it has. ;-)

[melvill]

I just reread my previous post. I think I probably came across more strongly that I had intended. However, let's keep this to a type-and-learn-and-debate.

I've learned lately that quite a few producers read all these posts but never add anything of their own. They do say they learn lots.

[parsley]

Jackflash,

Your questions are valid.

I agree that oats are a dandy good cash crop.

agstar seems to think that premiums cannot be captured by the individual,
but history shows otherwise.

Don Mitchell shows in his book called The Politics of Food, that Wheat Board marketing just doesn't cut it, by stating:

"On the other hand, measures such as the continuation of the Canadian Wheat Board and the price Stabilization Act in 1944 were aimed at keeping prices down for farm commodities"

"The farm price of commodities advanced only 17 per cent from 1949 to 1970, with the price of wheat virtually frozen from 1945 to 1972.

Farm income gains HAD to come from increased volume if they came at all"

"Farmers have managed to increase their average per-capita output by six-fold between 1951 and 1966 and they increased the total volume of Canadian Agricultural production by 40 per cent. But net farm income remained below the average for manufacturing wages in Canada."

So, right from the getgo, the governments and the bureaucrats put the screws to farmers. Money we should have gotten flowed elsewhere and that is why farmers are on this "produce more and more binge"

Those who eye-up the farmers' profits,(even their fellow-farmers' profits) think they can keep farmers under the control-thumb.

Farmers have done more than their share, they have been tremendous wealth-producers in this country,and we have earned the right not to be treated like children.From governments or bureaucrats.

Parsley

[JACKFLASH]

I beg the forum's pardon

[agstar77]

We can all bury our heads in the sand and blame the marketing system for low prices , Oat prices have not increased since oats were taken away from the CWB( in real dollars). There are more serious problems than marketing. As I have said before there will not be a real change in thinking until supermarket shelves are empty.

[parsley]

agstar;

There is nothing more serious for the farm community than not emough money. And I don't know about your neck of the woods, but in mine, farmers hurt for cash.

Actually selling what we grow gets that cash.

To me, more money in the pocket, not continuing the ideology of 'the Wheat Board with the three pillars from the Dark Ages' is crucial.

To me, burying our heads means to continue with the system that makes us poor.

This is why we cannot be partners, agstar.
We look at the world differently. We look at marketing differently. You trust the government run CWB to look after your interests whilst I liase with other farmers so we can run our own business.

And that is exactly why we need choice.

JACKFLASH,
We don't grow wheat and I am still mad!
And that is because every "elevator and feed mill"... etc.is a "works for the general advantage of Canada".

It essentially effects every sale I make for all grains.

Parsley