The Real CWB Balance Sheet

[Jman]

Adam Smith:

Re: cost to build our handling system vs the US system.

Are you anti business? The handfull of companies that build most of out concrete facilities in the 90's are some of the most efficient contstruction/ contracting firms around. Cargill was so impressed, "They bought one of the companies" <just like Remmington shavers, ha ha.>

The W. Canadian system is new, modern, and should be running more efficiently than it is. We can segregrate more classes of wheat by variety, quality, etc than they can, we have cleaners in most facilites.

In the US they basically handle Corn, beans and wheat. Thats it. In Western Canada, the diversity of exportable crops grown far exceeds their's. They would have a hard time shipping green peas, yellow peas, feed peas canary, durum, cwrs, cpsr, cwhws, cwrs, canola, flax, linola, yellow mustard, brown mustard, oriental mustard, soybeans, corn to export or domestic postions. I think our system is well designed, with the exception of the bottlnecks in Vancouver, and the refusal of CN to allow CP to run cars up to Prince Ruppert.

Would you say we would all be better off it we bought our houses in the 50's at a much lower cost instead of buying a brand new, energy efficient house with all the conveniet amenities, rather than living in a run-down old depreciented asbestos ladden 50's home.

[chaffmeister]

Jman: This thread was simply an attempt to open the door to allow the CWB and anyone else to demonstrate in real dollar terms what the value of the CWB is – and for all of us to gain by it. A couple of times here in Agri-ville I’ve heard people say “show me the money”. I’ve often said I would be a big CWB supporter if the CWB simply proved its value. So, instead of saying “the CWB price discriminates and gets premiums through the exercise of market power”, here the CWB could actually state what those premiums are. And we could also discuss what the true costs of operating the CWB are. In an open manner – allowing the CWB and its supporters to objectively defend the CWB with tangible arguments – not rhetoric. I was looking for a rousing debate on the dollar value of the CWB – so we could all gain some insight.

To say that my figures have no foundation – well you’re welcome to your opinion but I’m left wondering if you even really read my original posting.

I plugged in only real numbers or numbers that any reasonable person could accept – or correct. Two numbers came directly from the CWB’s Annual Report. Another was a pretty good guess at the premiums Japan pays – using the actual export figures and a guess – yes a guess – at the premium achieved. A guess was used because the CWB never says what it is really. And someone like Vader could say either right or wrong, hopefully also correcting it. The other numbers were based on sound comparisons or research I’ve seen. Also – available to be refuted.

Say I’m wrong, correct the figures, or refute them, whatever. To dismiss them without any constructive comment tells me that you’ve got blinders on and any openness about the CWB is threatening to you. For that, you have my sympathies.

So it seems my sincere attempt at getting a meaningful and open discussion on the true value of the CWB was met with your insincere attempt at diverting attention. And unwittingly we all earnestly responded to your posting, thinking we were helping expand the knowledge and understanding of the industry. But all along you were simply mocking and insulting those that sincerely want to know and understand.

I was hoping for so much more.

[TOM4CWB]

Chaff;

Thanks for the try!

History and Habit tend to repeat themselves...

I seem to remember a CWB benchmarking study that got burried... because the imagination of the CWB; is much easier to glorify: than reality.

The CWB is 1 square block of fallacy... surrounded by a million square miles of grim reality.

[sawfly]

chaffmiester
your contention in your first post, that somehow the board depresses off board prices . to the tune of 60$ a tonne dosent seem to be happing at least in canola.
useing your logic in the last 2 years the cwb made canola grower 25$ a tonne by forceing them to sell in the fall sept. oct. rather than jan feb march.

going back 5 years 2 yrs are higher 2 are lower and one is flat . no sign of 60 $ a tonne differance one way or the other.

[parsley]

chaffmeister:

I need to comment on what you have stated several times on agri-ville:


"I’ve often said I would be a big CWB supporter if the CWB simply proved its value".

I cannot agree.

Even if the CWB cranked out wads of cash stacked in old butter-churns, I could not support their methodology.

Putting someone in jail for trying to sell what they grow is just plain wrong. Even if the CWB pays well.

This is ultimately about principle.

There will be those who will claim that farmers made more money when purebred breeders had a monopoly on selling bulls.

But, the monopoly breeding program in Ssaktchewan was run into the ground by the breeders themselves, because of dwarfism. The monopoly made the cattlebreeders more money, BUT did not provide a freedom of choice to the commercial farmer, who ended up having to buy breeding stock that should have been butchered.

CHOICE could have prevented the inevitable harm that resulted in the commercial herds.

Choice provides a mistake valve, chaff. If somebody is not doing a good job, there is an alternative. Choice is not negotiable.

Just getting more money doesn't represent success. Money is one part of success, but not success.

Apply what you say to the principle and see if it works. Over the years, governments have had to look at what they do to see if it mirrors Canadian principles.

In the 1950's every one over 21 could go to the beer parlour,"except Indians".

The 1920's Election's Act stated women weren't persons and couldn't vote.

The big picture is not about the money, chaff. Even if the CWB attained $40.00 per bushel, it is irrelevant.

The big picture is about farmers being able to sell what they grow

Parsley

[chaffmeister]

Sawfly - please reread my post clearly. It said a total of $60 million - that's from $20 per tonne on 3 million tonnes.

That's $20 per tonne - not $60.

Historical prices have shown that there are incentives - sometimes hugh incentives to sell AT HARVEST for SPRING DELIVERY. Between the carry in the futures and the better basis for spring delivery, I've seen as much as $1.00 per bushel "incentive".

Farmers sell about half their canola before Christmas. This selling pressure pushes basis levels to the likes of $40 or $50 under. If the CWB priced differently to farmers and allowed you to respond to market signals on wheat - that is, sell and deliver more on the basis of price - then you'd sell less canola. Less canola sold at harvest means tighter basis - on the whole crop. To suggest $20 per tonne like I did could be light. 3 million tonnes could be light as well if all non-CWB crops were included.

So don't simply look at fall prices compared to spring prices (which it seems you did). Look at marketing according to market signals.

Perhaps the biggest problem at the farm level is poor capitalization, which in turn forces marketing actions that most would not make unforced. If the CWB marketed according to "the market" - or allowed farmers to respond to market signals (price), then there wouldn't be the selling pressure we see on non-CWB grains.

By the way - glad to see you acknowledge that the CWB forces canola growers to sell in the fall. That's exactly what I'm talking about.

[TOM4CWB]

Chaff;

With good advance planning, normally a year in advance; commodity canola has been sold at $12/t under the Nov. futures in AB for years.

If I want to deliver my Canola with out forward booking... THEN I pay the higher price to access the system.

THis is significantly different than the CWB... which will not allow the market to draw in our grain in advance; Non-board grains "pull" the supply in...to fill economic demand... .

[chaffmeister]

Ah Parsley, you've seen right through me!!

I don't think I ever have said, "If the CWB makes more money for you, I'd support it". I've always referred to "value".

Value, like success, is measured many ways. And like you say, money isn't the only measure of success or value.

If the cattle breeders truly provided value - to the industry, not just their own constituents - that's what I'm talking about.

Value. To the whole industry and western economy. Not just money, but opportunity, growth, vitality, community, prosperity (for all).

I don't believe Kenny Ritter for a minute when he says the CWB cannot operate in an open market. (What he's really saying is that the single desk can't operate in an open market.) If operated differently, in an open market, I beleive the CWB could provide value simply by giving farmers one more choice - another way to look at choice is to see it for what it really is - competition.

So yes - I would support the CWB whole-heartedly if it provided value. But value, true value, would be next to impossible with a single desk. I could be convinced otherwise but without some sort of saftey valve (competition) I really have my doubts.

Power corrupts, absolute power corrupts absolutely.

One size don't fit all.