Wheat Premiums

[TOM4CWB]

Chaffmeister,

I see this on US Wheat Associates'

"U.S. hard red winter wheat has been trading in Egypt at a free-on-board (FOB) premium over competitor wheat, currently about $40 per metric ton over Russian wheat, after a high of $60/MT over Russian. The USDA agricultural attache recently reported that a January 15 tender by GASC resulted in a Russian wheat price of $122.50/MT FOB, French at $125.95, and Australians a tad higher at $127.50. For the same tender, U.S. soft wheat was offered at $145/MT FOB.

While it's tough to compete when your wheat is priced $20 or $40 or $60 over the competition, U.S. Wheat Associates is stepping up efforts to promote the benefits and ultimate higher value of U.S. wheat."
http://www.uswheat.org/wheatLetter/doc/0277F861FEDCECD98525713A004E280E?OpenDocument#

Now... here is the AWB "single desk" at work... undercutting the US.

Who does extract the premium... good salesmanship, or a "single desk" that has a pool with no cost of sales that can undercut any seller... anywhere on the planet?

[chaffmeister]

Tom:
It's all about quality, not salesmanship, nor a single desk.

There is one line in the article that reminded me of something you had said here in Agri-ville:

"the use of U.S. hard wheat can garner a profitable margin for Egyptian millers in the higher quality flour market segment. The premium flour attracts a premium, demanding as much as $290/ton, compared to $190/ton for generic flour."

THIS is the reason why millers will pay a premium for one type of wheat over another - not because a single desk was extracting premiums.

So next time the CWB says it gets a premium, think quality.

And who produces the quality?????

[TOM4CWB]

Caff;

Knowing what my cost is, and what I need to make a profit... is the base economic information anyone who is to survive financially.... MUST know to be sustainable.

CWB Pool accounts... with a contingency fund that by law is allowed to go negative... will never allow the CWB to be responsible to a reality that everyone else must respect... the cost of production (or sales).

This is why, the "single desk" issue MUST be dealt with... in this round of the WTO.

I am VERY offended that the CWB is wasting millions of $$$ fighting against the very life blood of my industry...

Those who would be responsible financial managers... and those who understand, and are responsible to... make a real positive contribution to their families, communities, and NATION.

There is no silver "single desk" bullet... or gov. subsidy that will save grain farmers in Canada.

ONLY

Hope is something you DO... not what we wish for;

Things don't change... the creation around us...

We MUST Change.

Attitude is the key to success or failure... and depending on the Canadian Wheat Board, the Government Of Canada, or my favorite grain handler will not balance my books or create prosperity in my community.

ONLY WE the PEOPLE... can create wealth that lasts... a heritage that continues from generation to generation.

Through Faith, Hope, and Love.

God bless Canada!

[TOM4CWB]

Sorry about the Caff, Chaffmeister!

[ianben]

I once heard a Spanish miller who explained his buying process to UK farmers. He told us that although he paid £2/tonne less for UK wheat than French he paid us a premium.

Historically French wheat averaged 12% moisture and UK 14.5 so £2 less was in fact a premium as water was very cheap in Spain. His flour was sold at 16% so he added 2% more water to French wheat than UK

Everbody has differing problems and preferances so prices are not necessarally like for like in the buyers eyes.

Here we are trying to get to know what customers want and then deliver the goods. Warburtons seem to be able to source more and more UK wheat Lots happening in speciaitly oilseeds Nexeras etc.
Energy both wheat and oilseeds will need be supplied with the products they want when and where they want them and I am sure they to will pay a premium for this service.

I do have some reservations on energy and would like independant data on the value of wheat for ethanol against oil price.
I think I might ask the question in a new tread.