Benifits of the CWB

[TOM4CWB]

Jagfarms;

Point 1. What makes you so sure CWB grains will always be paid for? Remember SWP a couple of years ago in Jan?

I was told my CWB CWRS#1 wheat was at risk.

Point 2. Durum 2005 A series... double up on the contract signup... or what ever... reduce to the correct amount... presto 100% delivered...

Or deliver your #2 Durum as a #4 GDC now.

Real fair.

The fear and intimidation used... to excuse the CWB... to sit and suck our thumbs... and pretend we all need baby sitters. What a pathetic bunch we are.

Im scared... I just shouldn't get out of the bed in the morning... cause I might stub my toe!

[chaffmeister]

I started reading this thread and my initial thought was, “my job here is not done”.

And then I read AdamSmith’s posting and thought to myself, “Whew. Glad I didn’t have to write all that.” Well said, AdamSmith. Just for the record, Jagfarms – I agree with everything AdamSmith wrote.

What concerns me is not so much that there are CWB supporters out there – with all the mis-information out there, I’m not surprised. (After all – I’ve said that if the CWB proved itself to be an asset to the farm community, I’d be a CWB-hugger myself.)

What is really unfortunate is that there is such a poor understanding of how the market IN GENERAL works. I’ve seen examples of it many times over the years and it doesn’t seem to be getting any better. For example, Jagfarms’ posting about fairness of deliveries where is states:

“Well sure you can deliver it. But without the CWB who is going to buy it and where are they located at and where do I have to deliver it to? If I live in Northern Alberta and I have to truck it 1000km to southern Alberta, after I pay the trucking I owe them $1000.”

Jagfarms: Where do you deliver grain to now? Why do you think that, without the CWB, you would need to deliver somewhere else?

I think the two biggest problems with this whole CWB debate are:
1. We don’t know enough about the CWB – what its true value is in dollar terms.
2. Too many farmers don’t know enough about how the marketplace works – or could work.

[TOM4CWB]

Chaffmeister;

My problem is this:

The CWB buy-back is completely unreliable... at times it payed $20/t, at times it costed $50/t; to access an export license all depending on the grade and timing.

I cannot develop any sort of a business relationship... using this system's cost.

The CWB DPC is not a reliable tool to access a license, the CDN grading system itself is unstable and adds to the greif.

A high buy-back on feed wheat... which in turn actually is milling wheat.

Jag, we would go a very long way, if we would allow our neighbour the opportunity to capture value for initiative and risk... instead of allowing the CWB to pounce on those who try to make an honest business through hard work.

A CWB that will Pounce and tear those apart who are more often than not...

Victums (grain producers)of the CDN system that is paying a substandard price for farm produce with real intrinsic value...

that does not belong to the CWB pool in the first place.

Jag, if your "Benefits" are dependant on the system that rips off one "designated area" grower... to pay them ( those benefits ) to other CWB "Poolies"... needless to say:

I object!

Would you truthfully expect any less of me?

[northfarmer]

There was, and maybe still is, a time when the CWB propaganda machine had most farmers in the North concerned about having to haul thier grain long distances to be delivered if the so called "Power" of the board is gone.

This is of course a load of crap.

In fact most of our grain to export goes west not south. Most of what goes south is off board feed grain, which already goes by truck, in a market distorted by the CWB.

In fact, even though we farm in the North, we depend on non board crops such as oats, canola, peas, beef and feed grain to sustain the survival and cash flow the growth of our operation.

We need the new higher yielding wheats that are already being grown in the US not subject to our antiquated grain systems KVD grading structure and start gowing what the world is paying for and position us better to compete gloablly.

We will need gmo wheat before China and other major producing countries get them in place.

You can moan all you want about the low price of canola and overproduction, but imagine if GMO canola was never introduced in Canada. Do you relly think we would have been able to compete with soybeans and palm oil if we did not lower the per unit cost of production of canola and expand production and acreage. I think not.

If the final battle over the CWB is too be fought in an "fair" vote of producers(actual producers that ship more than a truckload of wheat) than the govt of Canada should fund the free choice campaign, seeing as the free choice campaign will have to fight the resources of CWB and their own self preservation propaganda machine.

[almoy]

I do believe the end of the CWB will be the end of the smaller grain farmer. We already notice that we have more trouble getting wheat delivered than the larger farmers this year. When there is a lack of room the grain companies give the space to their bigger customers. With no contracts in place regulating sales the smaller farmer will be squeezed out.

[Incognito]

How many acres do you farm Almoy?

[AdamSmith]

Some of the “Benefits” to the open market are:

Transparency: This benefit would be considered my number one. The market doesn’t lie, yes we may not like what the market says to us sometimes but it doesn’t mislead you. And in my opinion it’s much better to have correct information rather than information that is manipulated for “other considerations”.

The price spreads between grades and classes of wheat from the CWB are one case in point. The CWB has established spreads that are disconnected from real world values they are set in a manner to always insure CWRS has the highest value. This is done because that’s what the CWB wants to promote. Earlier I posted the Portland cash prices and DNS had a lower value than HRW. Yet the equivalent wheat to HRW in Canada is at a $1./bu. Discount.

A couple of years ago I found out by talking to someone from the Anhauser Busch that they were paying more for six row than two row barley. The premium existed in six row yet the CWB signal was the opposite to what was real.

Under an open market system this won’t happen, it can’t happen. It’s called ARBITRAGE. Know this word and understand this word. It’s key to understanding how the open market functions and why it will always give you the right signal. Again you may not like that signal, you may even hate that signal, but it is the right one with correct information.

Arbitrage is also the answer to many of the “fears” propagated by the CWB. Farmers in the north won’t have to go south to get the world price, the price will come to them. Railways and Grain Companies can’t over charge for their services because once we are free to go where the better deal is they will have to compete with the lowest cost service providers. How much wheat do you think the mainline co’s will get if they keep their handling fees where they are today, once our choices in buyers includes American companies who only charge 5 to 10 cents per bu.? They either match it or they quit buying wheat. I’m 100% certain they will match it. But that will be their decision to make. Delivery is the same. If you can’t manage your logistics as well as the next guy, well your company will just miss out on a lot of business.

I’ve spoke about Value added before, once the real information and the real prices become available confident decisions can be made. Once value added investors have confidence about the rules and once they have confidence that they can make logistical arrangements these thing will happen. That can’t happen today because with the CWB you never know what the rules will be and you can never be assured of anything. The CWB can change the rules on a whim. In the open market everyone has equal opportunity but outcomes will be determined by individual skill and accomplishment.

[almoy]

We farm 1700 acres in an area that is mainly farms from 4-10000 acres. We do not have enough acres to get discounts on inputs or any pull with grain companies for delivery. I know of large farmers that the companies allow to over deliver BIG time as it is. With the wheat board gone I doubt if the small farmer will get to sell any grain on a year like this.

[chaffmeister]

Almoy – I’m wondering why you think the end of the CWB will lead to the end of the small farmer. It seems that even with the CWB, you are having the delivery difficulties that you think you’ll see without the CWB. So how is the CWB helping you now?

There is a clause in the Canada Grain Act that says that if an elevator is taking in grain of a particular class and grade, they MUST accept deliveries from anyone wanting to deliver. They cannot discriminate, accepting grain from some while turning others away. I know that nobody likes to threaten legal action – or even bring in the regulators – but there are provisions out there to help you. And if these don’t keep the playing field level for you, then they need more teeth. Not sure the CWB can help under the current environment, though.

Good luck.

[almoy]

With the CWB contract once a person contracts their grain they can usually deliver it. This year it seams they keep having more contract calls before a lot of people have the oppertunity to fill the ones that are open.