why do we think the cwb markets better than us?

[charliep]

Poorboy

What are your thoughts about how things could change?

A couple of my ideas.

1) Just have a daily cash price that farmers can react to. They can evaluate this price relative to their information sources.

2) Look at some other alternative to handling pricing and delivery at the end of the crop year. Maybe it is having two pooling periods in a year. Maybe more effective cash pricing tools in July and August.

3) Making a closer tie between pricing tools and delivery contracts. The CWB knows what wheat they need and when based on their sales program. I realize not chipped in stone (buyers come into the market in the way suggest) but the CWB sales department has a good idea/plan for how the crop will be sold.

[TOM4CWB]

Poorboy;

My main complaint has been a lack of a cash price... which should be the easiest for the CWB as this seems to be the preferred sales method.


To force a grower into an unknown basis and cash DPC... from a monopoly that is known to be skewed to favour the pool system... is heavy handed at the least.

So how much DPC is unpriced right now... that the CWB is even at risk to cover?

1% of what was contracted last July?

Are we even getting a reasonable signal from todays DPC signals that will be reliable for Aug 1 06 pricing?

Who knows!

The CWB system is so quirky... to call any of the PPO's dependable is a huge stretch of imagination for those who use normal cash pricing systems on non-board grains.

The CWB is missing out on significant sales leverage when making forward sales; by refusing to transparently match specific growers and endusers.

The odds are that half the time the market goes up... the other half the markets go down. Pooling in principal assumes the market is too low and is about to trend higher. THis leads to expectations that are often unreliable and unobtainable.

It is a simple trap that leads growers to believe we can have the best of both worlds... when reality clearly proves this is NOT attainable.

So Poorboy... I ask AGAIN for a CASH... PRICE. Delivery as previously administrated, by the CWB, if we must... but a CASH PRICE every business day while the markets are open and trading.

Does this help?

[poorboy]

TOM,

I also would like to see a cash price. I can only see it working like a grain pricing order from an elevator. It they get enough orders placed to sell tonneage at a given price then they can go out and try to make a sale. We do this all the time with field peas, canola and even barley.

As a farmer, I think the hardest part to realize is how the sales of wheat occur. I doubt very much that when the prices are high that there are a lot of buyers fighting over each other to buy all the wheat they can. I only buy what I need and no more when prices are what I would consider high.

So how do we let all farmers price their grain at the market highs, when there are no actual customers there to purchase our grain at these prices.

Perhaps the cwb could tender offers to farmers each day, on a limited tonnage basis. For example, if the CWB makes a sale for 100000 tonnes, it could offer a price to the farmers for $x/t and once the 100000 t are filled, you have to wait for another opportunity to price your crop.

Wheat markets in the US work well on the open market, with a futures and basis, but I don't know if they would work well here, because we export a way larger percentage of our production.

I do not see how the CWB handles the daily price contract at all. We ship almost no wheat into the markets that we are using as a price signal. The pricing on the DPC is based on a local area which has a price determined largely by local supply and demand. A poor crop tends to increase price in these areas much more so than the world wide price, or vice versa in a grain surplus year.

I think that an open market for wheat would work, but I am somewhat hesitant, because we have no par delivery point in Canada due to borders.

We have been trained to look at delivering wheat to the east or west coast ports, but the most logical route may be to take the grain from Saskatchewan south to the mississipi river system and use southern ports in the gulf.

In another ag forum, there is a malt barley producer in Montana who is raising malt barley for molsons, being purchase by the CWB and sold to Canada Malting in Calgary. WHAT is the cwb doing buying grain from Montana farmers.

I do agree that the CWB needs a very thorough shake up and close examination of its operations. Would a system of huge multinationals be better for us as farmers, I am not sure. At least we are starting to get some pricing oportunities for our grain (EPO, FPC, DDC, etc.). I think these options are coming because of farmers like you Tom, by asking for these options.

[TOM4CWB]

Poorboy,

I think we need to remember that pre-pricing when the market is "high" is a risky move... because we don't have the grain in the bin yet. The basis is usually the biggest unknown during a run up... but obviously many grain co's and endusers are also looking for those free stocks... which is why the market rises.

Therefore;

Many times the CWB will not sell when the markets are high... simply because the CWB doesn't have much grain to sell... which is why the market is high in the first place!

It should be the individual farmer who has the stocks... or is willing and able to take the risk of a sale... that reaps the reward of premium prices. The CWB needs to be the facilitator of these transactions... an honest broker.

[TOM4CWB]

Ron,

The AWB and CWB are like two peas out of the same pod... as are the gov. lawyers who have cushy jobs that maintain these societial anomolies... the levers that control supplies of food outside the S&D nomalties the rest of CDN business operate within.

This is a BIG part of your frustration... the frustration of any grain farmer today as we see our crops wither and remain below the cost of production.

And from AU. to emphase my point...

The bleak house that is the AWB inquiry
Richard Ackland
July 21, 2006


IT IS heartening to see more and more lawyers being tipped into the machinery set up to determine that the Prime Minister, John Howard, and his ministers knew precisely nothing and certainly bear no responsibility for $290 million of wheat growers' hard currency being shovelled into the pockets of the world's then No. 1 boogie man.

Small armies from the Australian Government Solicitor's Office are now in the fray as "operation know nothing" swings from the Cole inquiry to the Federal Court and back again and, who knows, to the High Court and back, and so on. Bleak House's Tulkinghorn, eat your heart out.

Terence Cole, as commissioner, has his own teams of lawyers, but they cannot act for him when he is defending his realm in the Federal Court, they can only assist him with his inquiry. He has to get lawyers from the Government Solicitor's Office to do the hard yards down at the Federal Court while AWB Ltd tries to gazump him (successfully, so far) on the fight over its documents.

The commissioner wants AWB to produce the documents it has that deal with its kickbacks to Saddam Hussein. AWB says that the documents are subject to legal profession privilege and so are off limits. Lawyers have sprinkled holy water over the papers and given advice on the state of kickback play.

According to ancient common law rites, if people had to reveal the nature of the advice they received to get themselves around sticky situations then the whole edifice of the rule of law would crumble and totter. Of course, lawyers have no interest in the outcome because they just dispense fearless, independent advice.

Because the policy of the Government is to say it's all AWB's fault, the powers that be in Canberra have been very keen to assist Cole to get his hands on any incriminating company documents. Last month, under the guiding auspices of the Attorney-General, Philip Ruddock, special legislation was passed amending the Royal Commissions Act ostensibly to give the commissioner the power to decide which documents are privileged and which are not.

The court also has jurisdiction and AWB thinks its chances in life before the Federal Court are better than before Cole. The Federal Court, strangely enough, agrees and so next month the 40 bundles of documents that are supposedly crucial to the outcome the Government wants are to be individually weighed, held up to the light and assessed for their sacred worth.

As I say, there can never be too many lawyers in life. If Cole has been appointed to bring his independent mind to bear on all this, it is just as well there are some back-up independent minds. One can never be too certain.

One funny thing is that on January 31 AWB's lawyers, Arnold Bloch Leibler, wrote to one of Cole's lawyers, saying why not appoint an "independent senior member of the NSW bar or the Victorian bar to undertake a review of the documents and express a view".

The idea that someone else should be allowed to trample all over his patch must not have appealed to Cole, because there was no reply to the letter. In a sense we're back in the same territory because now the Federal Court is trampling.

Another intriguing sidelight is that one of the lawyers who advised AWB on its legal position about the violation of UN sanctions is a Melbourne barrister by the name of Dick Tracey. He has recently been appointed a judge of the Federal Court.

Might not someone think it unseemly to have one Federal Court judge decide on the privilege of documents advised upon by another Federal Court judge? Should another tribunal be asked to decide that question?

We should not get the idea that legal professional privilege has an immutable quality. In NSW Sir Laurence Street recently acted as an independent arbiter for the Parliament to determine whether legal advice to the Roads and Traffic Authority about the Cross City Tunnel was privileged.

At first Street upheld the claim of privilege and then, when there was a significant public fascination with what was going on, the privilege was denied and the documents went onto the public record.

This rather demonstrates the shifting nature of privilege. If the public interest is great enough the principles of law can be re-evaluated.

Why can't this apply to the AWB documents? The public interest is positively bubbling over.

justinian@lawpress.com.au

To solve the CWB problem will require the CDN GOV. Justice Dept to reliquish control... and give us grain farmers back property rights... what are the chances of that any time soon?

Can it actually happen while we have a minority gov. in Ottawa and a left wing Justice Dept that was assembled over the last dozen years?

It will take a miracle to thread this one through to get a reasonable result!

But hey... I believe in miracles... that's why we elected the Conservatives... isn't it?

Better go bale some hay... and watch/smell the crops desicate.

GOD: it is ugly for a grain farmer today! We need a serious miracle on more than one front!