CWB ocean despatch, costs us $6.66 million

[parsley]

This subject is not too hot to talk about. Chaffmeister did some pretty sophisticated explaining. And I appreciate that.

These is so much dishonesty these days, we should all be very finely tuned to every possibility, even the ones we wish we didn't have to think about.


The $250M that is "missing" should be in farmers pockets. That's a lot of cash. The CWB Directors should be chasing it like a dog after a squirrel.

halpenny, are you at all interested in taking these concerns back to the cwb Perhaps they just land in the CWB burn-barrel anyhow.
Parsley

[TOM4CWB]

Parsley,

I am afraid that the CWB is like an elephant in a bathtub!

They really like making waves, and on transportation and grain handling logistics they really have thrown their weight around!

Meanwhile others are getting squished and mangled, and the floor in the bathroom has 6 inches of water on it and the water is drowning farmers, grain handlers, and anyone else within splash distance of the CWB.

Too bad they wouldn't turn off the bathtub tap, and settle down and really look at what they are doing for a second!

I bet some one will eventually turn off the water supply on them, and tell them to get out of the bathtub!

[TOM4CWB]

Regarding the convoluted ocean freight arguments - a key question is - how much despatch has the non-board shipments earned over the last couple of years? No where to find out. Is that money passed back to farmers? No way to find out.

For example, vessel clearing for August/00 to January/01 from Vancouver shows that CWB vessels cleared in an average of 10 days, and canola vessels were an average of approximately 7 days. Considering that there are seven classes of wheat and two classifications for malt barley and feed barley, (with varying grades and specifications) compared to canola or peas with a couple of grades, this performance is pretty good for both groups of shippers. A good portion of CWB and non-bd shipments should fall within the range of despatch so far this year. Remember, you have to have twice as much despatch as demmurrage to break even. The CWB certainly isn't holding out for longer wait time for vessels, as chaffmeister would have you believe.

So, will farmers be seeing any despatch returns from non-board marketers? No way to know. In fairness, if non-board marketers incur demurrage, they pay that as well.

This is a fine theory if you think there is a conspiracy, but the review of vessel clearing times shows it definitely falls into the category of "misinformation".

Regarding basis issues, chaffmeister, I looked at your comments in the other thread.

You say "Now let's look at canola: Export basis is currently about $20 over the futures basis instore Vancouver. Street prices in Alberta are about $20 under the futures including freight (Canbra is closer to $10 under). So, the difference between the price received by farmers and the current export price in Vancouver is about $40 total. However, this includes freight of, say $25. Taking the freight away (so we can compare CWB apples to non-CWB apples) we get $15 per tonne of non-freight costs from farm to export position. This is what should be compared to the CWB's non-freight costs of $20 per tonne."

Again, a comparison of spot canola basis values versus the costs in the CWB system over the whole marketing period is not an accurate comparison.

My point was that CWB costs have little variation over the course of the year, compared to non-board basis levels which fluctuate widely through the year.

Chaffmeister, you neglected to consider the very real amount of trucking premiums that are being paid to farmers. That would change your figures. Say this is an average $4/t benefit and subtract it off the CWB cost.

Also, what about the Fobbing charges which are $8-10/tonne? They are taken into account with the CWB costs, but you reference prices in-store so they are not taken into account in your canola calculation. So add $8 per tonne to the non-freight canola costs.

So that brings the CWB cost, before interest revenue to $19/t net of rail freight and the non-board costs net of freight in your example to $23/t. ($15 8 fobbing cost). And the interest earnings are real - farmers receive that benefit despite the fact I've netted them out for this comparison.

Looking at the canola basis variability of up to $20/tonne you would agree that these are amounts over and above the true costs to get the grain to port, (which there is firm agreement in principle from parsely, tom4cwb and yourself that no grain merchant is moving grain below the acquisition cost to them plus freight). In comparison, I think the CWB numbers, which are there for everyone to see, look pretty attractive.

Where are the aggregate costs for the year for non-board movement that farmers pay? This would be useful to know to do the direct comparison with the non-board grains. I don’t think they are assembled anywhere because there is not the disclosure from the private trade. I don’t have public confirmation of the sales value of a single canola sale out of the port of Vancouver. Asking prices don't reflect tradable values. I don’t even have the aggregate annual value of all canola sales, which farmers have with CWB grains - so how do farmers know what they are truly being charged??

Perhaps the direction you should be looking is for full and complete disclosure on costs from the other system participants.

Tom

[TOM4CWB]

thalpenny,

I understand the CWB does not pay the ocean freight bill.

But clearly this freight bill is affected by the port of origin, and the types of "encounters" the ship owner must put up with when loading the cargo.

The point in the begining was that a 3 day loading window, with despatch and demurrage both absent, would allow for the most efficient shipping system.

Isn't this about what happens in Prince Rupert? What about selling more grain through this port facility?