CWB Rejects 50% /30% of Wheat

[Vader]

I am sorry Profarmer. The reason YOUR WHEAT is worth what it is, is because the CWB CHOOSES not to sell it.

It is too bad that the price signal is exactly the opposite of the signal sent by the acceptance level.

Should we grow more and sell it for less or should we grow less and sell it for more?

You and Tom seem to think that we should grow more and sell it for less. That to me seems to be insanity.

No wonder we are all going broke.

[TOM4CWB]

"The reason YOUR WHEAT is worth what it is, is because the CWB CHOOSES not to sell it."

Wheat that cannot be sold is not worth anything!

When the CWB withholds wheat; others fill the marketing hole and take market share from Canada.

Vader, what exactly is the CWB's marketing plan for 2005-06?

[Vader]

Timing is everything Tom. Wheat that is not sold into this years glutted market may be worth much more next year. If you sell all of your grain into a depressed market you may have simply crystalized you losses.

[TOM4CWB]

Vader;

Is this the CWB's marketing plan then...

On a whim... with no plan?

[Vader]

Tom, I like it when you become insulting. It means you have run out of constructive arguments.

[parsley]

ProFarmer,

vader's arguments lack logic.

The CWB consistently sends the message to farmers, that only top grades of grain have value.

Farmers can, and do, do better than Board experts.


Commissioner Ken Beswick best reflected that same old, same old attitude in the November 24,1994 Western Producer article, page 5,:

"Local feeders get the best quality barley while the board gets stuck with product that's lightweight or high in moisture"


Why can't the CWB would be able to figure out that the highest price gets the grain?

How can producers get the message to the CWB that ALL grain has value?

Parsley

[silverback]

Vader,

I almost thought you were making some good points for a while, but then I got thinking (scary).

I realize that this year is a dog. Everything is really crappy, except for calves right now. Anyway, I can plan for years like this because I know they come around. I also know that things turn around and prices go up sometimes. Sometimes to very good levels where farmers can set themselves up for the future.

My question or point is, when the markets turn around and prices go up, I need to take advantage of the highest prices I can get to keep me in the game. Can the board deliver me the best returns in a high market as well as a low one? I have not seen that. If there is proof that this happens, plese feel free to direct me to somewhere that I can see it in writing. It seems that we are never getting the chance to capture the tops. Why is that?

If I can struggle through the bad years, I need to take advantage of the good years. To do that I think I need the freedom to choose who markets my production.

[TOM4CWB]

Vader;
Sorry you feel insulted.

I asked for a practical plan...

holding grain for a "higher" price is how thousands got in trouble this year... get low prices every year!

Therefore holding grain even when prices were "higher" hardly could be counted in the practical "plan" category IMHO.

1. Pricing Targets, what are they?

2. Volume targets, of which grades; what are they?

3. Timing, when are the go-no-go dates; do these exist?

4. What percentage priced is the pool now?

5. What will be the determination factor for the CWB to take the rest of our wheat/durum?

6. What risk management is in place to maximise our returns?

Marketing takes a huge amount of work and planning... if it is to create a profitable outcome for the products it aims to sell.

We need to know the above parameters of the marketing plan to judge it.

Or is this too much to ask and just insulting the CWB?

[Jagfarms]

Could the rest of the world supply the Durum market without Canada?

[charliep]

Jagfarm

I will leave the debate alone but can help with your question. I would divide into an understanding of customers, competitors and implications.

Customers - The biggest importer of durum is North Africa. They produce a lot of durum themselves so Canada is a residual supplier. Having said, they buy significant amounts and likely do not have the same quality/protein requirements of many of our other customers. Europe and US (and to a smaller extent Japan) are the major importers of high quality durum.

Competitors - The US and Europe are also competitors although in different ways. US exports lower grade durum they don't find value in at home (use their product in high quality pasta market). Europe is not a major exporter of durum but rather semilina - they value add at all quality ranges. With higher durum prices relative to other wheats (excluding this year), many new exporters are entering the market starting with Australia. I would look for more competition out of places like middle east/western part of Asia and perhaps some areas of eastern Europe in the future. You only need climatic conditions like southern Saskatchewan.

Implications

Users have been very inovative in including other types of wheat in pasta (at least at the lower quality end).

New competitors will enter the durum market over time.

Pasta consumption has been decreasing but the trend will likely switch somewhat with things like Atkins diet falling out of favor.

The challenge is to grow markets. Many areas of the world do not consume pasta (mainly noodles) but they may be interested as an alternative to their regional diet. When they think of durum/pasta, these customers think of/buy Italian product (associate with this region/not Canada). Similarly, the industry needs to look for new uses of durum at both the high and low ends of the quality spectrum.