give your wheat away?

[ivbinconned]

A man I have a great deal of respect for asked this question recently.

"If we would give our wheat away, would it impact the retail price of bread?"

Your answers please and why.

[JD4ME]

NO and I have three letters to explain BSE

[ivbinconned]

Thats a good EXAMPLE...I am asking why?

[clancey]

Actually no. The price of wheat has very little to do with the price of bread in Canada and other developed nations.

If you wnat to give wheat away and have an impoact on price -- donate it to the Canadian Food Grains Bank:

http://www.foodgrainsbank.ca/

Since 1983 it has given away the equivalent of 944,000 MT of grain. CIDA does 4:1 matching on donations to a maximum value of $16 million per year; and you get a tax receipt for your donation.

Your wheat will go to places where people die because they cannot buy food -- so it actually builds futuire demand by helping rebuild lives.

[JD4ME]

The value of the wheat in a loaf of bread is 3 cents we are already basically giving it away , the rest is wages, operating costs, freight, fueland energy costs etc, add in the mark up all the way through the chain. Good enough explanation?

[charliep]

If the margins are this good up the supply chain, why don't farmers participate more either by vertical integration (owning processing facilities) or participating in a value chain? A story I hear on flour (at least from the Canadian National Millers Association) is it is a commodity just like wheat with tight margins. Would suspect the same comment would come from a bakery.

What is the difference between the loss leader $1/loaf bread at the local super market and the $3/loaf specialty bread? Which bread are you particpating in making?

[charliep]

Perhaps one of the lessons from BSE who looked at the margin in the supply chain and did more direct marketing. A lot of work. Would seek cowman's thoughts but in a better economic environment for cattle, would suspect a lot less is happening now. The question comes to how you achieve more value in market and at what cost (time/money) as well as risk.

[charliep]

Should read before I press send. First sentence.

Perhaps one of the lessons from BSE IS RANCHERS/FEEDERS who looked at the margin in the supply chain and did more direct marketing.

[clancey]

Some farmers have become vertically intregrated, especially those who are interested in niche products and organics.

Wasn't that the point of the coop movement in the Prairies between the 1920s and 1960s -- to get a larger share of the pie throughout the marketing chain? Today's lack of interest suggests the extra revenue obtained was not as great as the opportunity of selling to non-coop buyers.

Advancing into the consumer products business is a whole new ball game with a host of liability and logistical issues -- all of which cost money.

In truth, if you believe that the system is making too much money then you ought to buy the system. It is available for sale one share at a time on the TSE and NYSE. Given that the major food companies are making good profits, that probably is a sensible way of hedging the future income potential of the land.

[cowman]

There is a local guy who decided he wanted more out of his operation than what he was getting so he decided to move up the food chain? He grew fababeans and was disgusted with the price he was getting so decided to turn them into a chili/lasgna product. He found a processor willing to produce the product and he started running around creating a market for it! It was a great success but he found that he was spending so much time doing the marketing that he didn't have time to do the farming! When he looked at the numbers he found out that he was making his money marketing...not growing fababeans! Next year he rented the land out and bought his fababeans on the open market...he never looked back and has become very wealthy doing it.
How many farmers moving up the food chain to realize more profit might find they don't need to grow the product anymore? Easier to exploit the grower than take a loss on growing.

[Vader]

I think that you have just described perfectly the mult-national grain companies like Cargil, ADM,
Bunge, Louis-Drefuss, and ConAgra.

[ivbinconned]

Through OUR single desk CWB why can't we retain ownership of OUR product and negotiate a share of the end product??
Pushing the price of that loaf up by .10 cents would reap a bigger reward to the producer.

My freind also recently asked a Mexican miller who owned 5 mills in Mexico and one in Cuba if we could send him producer cars of wheat with no charge, retaining owner ship, and realize a share of the end product...the answer was yes!!

This my freinds is the only way. There has never been and never will be an open free market in wheat. It has been used as a political and economic tool by people in, or with, power since the time of Kings.

Great discussion!