CWB Market Canola

[chaffmeister]

Thanks for the background.

This doesn't explain why the CWB said "yes" through all the negotiations only to say "no" at the last minute.

The CWB has not sold to Dakota Growers because Dakota Growers' new gen coop structure wouldn't allow it.

I believe the relationship with Prairie Pasta was aimed at providing Dakota Growers with access to Canadian durum (through Prairie Pasta members) and providing Canadian durum producers with increased delivery options and investment.

Are there other potential buyers in the "freight disadvantaged" area you talk about? If so, wouldn't selling to them (even with a slight freight disadvantage) be better than not selling anything at all?

Also, how does this fit with the argument that allowing some farmers to have access to this market (just over the US border) would be allowing them to "cherry pick" the best prices/markets? How can these be the "best markets" and "freight disadvantaged" at the same time?

[charliep]

Vader

Why are the freight spreads you mention relevant to a durum grower along the border? His concerns are do I have a delivery opportunity (50 % take on the "A" series) and how does the price I will recieve compare to the projected CWB pool return outlook. If the US market allows them to actually deliver durum and the price is higher, why shouldn't they make this decision with the CWB blessing?

To bring the topic back to the original thought, would you appply these same principles to canola? I assume these same arguements would apply to Velva, North Dakota (both the current ADM plant and the proposed bio diesel ones). Would including a CWB alternative for canola in Manitoba restrict this access?

[TOM4CWB]

Vader;

Amazing.

The CWB will spend how many $$$ on the rail cars, and on supporting the PRCC's purposal?

How many $Hunderds of Millions will be as farmers spent on rail cars?

But I guess the CWB and farmers need no facilities in the new competitive market place. Obviously the CWB knows this, hence have done nothing on handling facilities.

A $60M a year expence... on the CWB... and we get leadership of this Quality?

Unhedged CDN$;

Dropping PRO's;

Unsold grain;

Forced inventory retainment;

ALL who needed to sell other non/off board crops... had the opportunity to do so this crop year.

Can the same be said for CWB marketing?

[wd9]

Thanks Charlie, yes please, let us stay on the question of whether or not the CWB should market canola. This is a very important question and we must stay on track.

[Vader]

How many tonnes of canola find their way from Saskatchewan to Velva? Very very few is my understanding.

Freight issues are real. They form part of the basis. Basis needs to narrow to attract deliveries. In the case of Velva and Carrington there must be some strong incentives to overcome the negative freight issues.

[charliep]

Most of the Velva catchment area would be in Manitoba but there is pull from all of southeastern Saskatchewan - perhaps even more more that St. Agathe is running.

Keeping the topic on canola, lets assume two bio diesel plants are equal freight distance/cost from a final product market. One plant is in a surplus area (lots of canola over and above what the plant will need). The other a deficit area (needs to import canola from other regions). The plant in the surplus area likely could buy canola for cheaper than the one in the deficit with the difference equal to the trucking cost between the two plants (other things equal). The difference in price would be a competitive advantage to locate in the surplus area.

How would a single desk seller price into these two markets? What impact would this have on an industries decision to locate?

[TOM4CWB]

Charlie;

WHy do you bring up the "single desk" issue when IMHO it is not an option?

Or, am I wrong, and you know something I do not Vader/Charlie?

For the CWB to be competitive it needs to market more than wheat and barley.

IMHO Canola bought from the competitive market place seems to be a logical 1st step in the upcoming new CWB marketing environment.

[wd9]

The same thing happens with maltsters. If I have a characteristic the maltsters want I get no added value for it. I get the PRO regardless - like actually having dry grain this year. Investing in drying equipment would have been a good plan, but, the pool takes that advantage away. The fundamental problem with pooling is those who wish to do the extra to make a unique attribute are penalized and those who grow just to barely spec are rewarded.

This would kill the canola industry and the associated dollars in investment. The future of canola is IP, other alternative uses, value added etc and the archaic system of bulk movements with bulk social payments would not improve my bottom line it would hurt it by taking my premium and paying it to those who slip by.

Fine, call me a capitilist.

[cowman]

The reality is this: The CWB is an old socialist/communist system that should and must be done away with in this modern reality? The days of "communism" are over?
Why would anyone in their right mind want to destroy a modern industry with a mindset out of the thirties!
The bio gas industry might very well be destroyed using idiotic ideologies from the depression...but come on this isn't 1933!
The CWB is a dinosaur that needs to be put to bed? The idea that this ineffiecient government agency has any role to play in a new industry is frankly a slap in the face to anyone who values his freedom?

[Vader]

Sorry Charlie, I tend to agree with TOM. I don't see canola functioning under a single desk. I see the CWB marketing canola as an adjunct to its current business. I would see the CWB receiving producer cars of canola and selling it to those same customers that currently purchase wheat and barley. As an "add on" to the single desk I think that the CWB could be very competitive. Just think about how we could spread out our fixed costs.