give your wheat away?

[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!

[wmoebis]

So what happened to the CO-OP movement and why did we give that away? Seems there was money to be made when that was going.

[Vader]

I heard that same Mexican mill speak. I asked him if wheat prices were volatile the same way as flax prices and if the world competitive price of wheat were double would the consumption of bread products in Mexico change. His reply was that the demand for bread products was inelastic and that the demand would stay the same if wheat prices were double.

At the same time he also said that his job is to source wheat for the cheapest price possible. This was in response to a question as to why he would not pay farmers their cost of production.

I hope all the farmers in the room were paying attention.

[charliep]

What the Mexican buyer told you is wheat is a commodity. How does single desk selling add value to a commodity market? The answer could be in terms of higher prices (premiums) or efficiencies that reduce cost.

The threads always come back to the evils of multi natiionals. I have to note the evil multinationals are also strategic CWB business partners - the CWB could not function without them. I also note that many of the rules the CWB enforces are as much in place to protect multi nationals as they are to protect their farmer stakeholders. Otherwise, why would the CWB enforce the domestic human consumption pricing policy on all processors regardless of size. Why wouldn't the CWB allow something like a Prairie Pasta to emerge with pricing outside the CWB?

[Jman]

Charlie: I believe this was addressed already (SEE: cowman Reply posted Jan 14, 2006 7:43)

I believe a few small time operators, such as the organic farmers are the exception, in that they aren’t even a blimp on the radar (yet) to the main players (ADM Cargill Bunge Maple Leaf Toepfer et al) and can succeed in value-added because their part of the market is so small, nobody cares.

But Charlie,
Do you really think that 30, 50, or 100 farmers from a certain region of the prairies can actually work together and “buy” their own grain back for the cheapest price possible so that they can sell pasta cheaper than the multinationals?

If you want a good example of a recent failure look at the Manitoba cattle farmers who were probably the most affected by Alberta BSE. These cattlemen were almost completely dependent on marketing their cattle to either the USA, or the AB processors. Once BSE hit, Cargill and IBP in AB both refused MB cattle because they were not "past loyal customers", effectively shutting them out of all markets.

So they decided to try build a co-operative processing plant in Dauphin MB so that they will never be shut out of a market again.

To date, they still have not raised any significant equity or participation in the plant, and it will most likely be a complete failure.
Manitoba cattlemen are again fixated on the USA market, because it is paying a higher price than what THEIR OWN plant can afford to pay.
This last sentence explains why farmers in Western Canada cannot capture or will not participate in any agricultural value added projects on the prairies. They don’t want to sell their hard earned commodities at a lower price to their own value-added enterprises hoping to capture these same profits further up the value added chain.

[Vader]

The multi-nationals are "business partners" because they control 75-80% of the worlds grain trade. It would be ludicrous to imagine that one could do business in the grain trade and avoid them.

[TOM4CWB]

Charlie;


You are correct... and many good examples exist in other ag products where farmers are working together to get up the chain for the betterment of local communities.

Hogs for instance!

Eastern Alberta has a great group of farmers doing what many would consider impossible.

Beans in southern Alberta. Farmers working with farmers.

Feed lots all over Alberta!

We can and do the impossible every day!

NO GOV. MONEY!

In Saskatoon on Tuesday I talked to a farmer from meadow lake who watched the potato fiasco in SK.

Gov. money destroys and Gov. money distorts... almost always.

Thus the reason a "single desk" mandatory system will never work... except to do what it was designed to do in the first place.

Take our grain at below cost... and give it to someone else... to benefit them!

WHy else would the Liberals put grain farmers in jail for selling grain at more than the CWB was offering?

[charliep]

The comparison with the beef industry is interesting. Concentration on the processing side has been an issue in both cases.

Limited markets/too much power in the multinationals was the concern at the height of BSE. Now the border has opened, this has subsided with limited talk about investing in new processing capacity.

Concentration in the grain industry is also a concern. The solution here is market power through single desk selling. Again, limited incentive to invest in value added processing.

Two different industries with different drivers/business models. The commonality is the belief about too little competition.

[cowman]

Charlie: In the case of CWB board grains there really is no competition? One of the reasons a large US maltster decided to not build in Alberta?
On the beef side of things the lack of competition was mainly due to the product being locked out of the market? If we had twenty packers in Canada during the BSE crisis it wouldn't have mattered as there was no place to sell the beef?
The sad thing about that whole situation was it caused a lot of people to think producer owned packing houses would solve the problem when they clearly would not?
Consequently many producers were stampeded into contributing dollars they could scarce afford investing in pipedreams!
There is a reason Cargill and Tyson ran out most of the Canadian packers 15 years ago? The fact is they were more efficient, had economy of scale, and had the best management teams in the industry. Now somehow these little co-ops are going to come in and show them how it is done....I don't think so?