U.S vs Canadian wheat prices

[craig]

Since I was doing inventory and harvest production reports anyway I thought it might be interesting to compare what impact it might have if I could sell my current wheat crop at Great Falls, Montana prices. I used 13% U.S. HRS vs 13.5% CWRS. I used 11% U.S. winter wheat vs 11.5% CWRW select. For CPS I used an equivalent discount from CWRW select to CPS red Initials. This year I grew 662 Acres of wheat. For the total farm I would have made $39,228.00 more in Montana comparing current prices against FPC. If I compared against PRO I would have made $53,347.47 more in Montana. On a per acre basis against FPC it represented $50.00 per acre more on HRS, $60.00 more On CPS and $70.00 more on Winter wheat. The Montana prices are readily available on the internet from USDA and give price ranges in different areas of the state. I used a midpoint price for my comparison. These are per bushel prices deleivered to an elevator. I used a currency calculator on the internet to convert U.S. prices to canadian Equivalent.These prices I believe also carry no susbsidy value to them. Since Montana and Alberta production likely all end up in Portland and Vancouver heading to similar markets I would suggest that it is a reasonable benchmark to judge CWB marketing performance.

[Steve_Winkler]

Pretty discouraging isn't it Craig? It makes me sick to think Western Canadian farmers could be getting access to those markets and prices but are stifled by the inept CWB. For all of those who are in love with the wheat board, I pose this simple question: How on earth do those poor farmers in Ontario and Quebec mange to survive without the CWB? The sooner it's demise, the better in my opinion.

Cheers,

Steve

[agstar77]

Interesting that those close to the border complain the loudest. You would never be allowed to ship all your grain across the border but you would be allowed to sell it to the American grain companies in Canada that would ship it across the border.lol

[craig]

Agstar. I do not farm close to the border. The intent of my comments is not to lament that we cannot deliver grain into the U.S. but to point to the fact that these prices indicate that the CWB may not be the premium seller it claims to be. It also indicates the short fall of both the FPC and BPC and shows these are not the same as open market selling. Wheat pricing on the futures is at historic highs yet that is not reflective of what Canadian producers are being offered.We are supposed to compete with our American neighbors and when their market prices are that much better than ours how can we do that?

[agstar77]

Craig, my comment was not directed at you, however I would be more interested in comparing your net proceeds with those of a U.S. farmer growing the same quality grain, minus all subsidies. Comparing spot prices is a useless exercise.

[charliep]

Just curious as comment on spot prices. There are canola crushing plants both sides of the border and you can look at spot prices and make marketing decisions. There are oat prices both sides of the border. Pea prices. Even though western Canadian farmers can't sell directly to the US market, there are feed barley prices you can compare. All crops in the US get subsidies but outside encouraging over production, does not impact prices. What makes wheat different?

[dolin]

since last year,in quebec we have to pass by a agency for sale human wheat. it look now we have same problem that you

[TOM4CWB]

Agstar;

Craig should be comparing 14px US to 13.5 pxCWRS, as our measurments are low.

If we are NOT growing the varieties that command a premium on the International market... and are discounted because of our quality... lets get with it and grow US quality. I don't think this is the case... the CWB just appears to be discount pricing.

The final point is this, if a wheat grower is in central Alta, there should be a $5-10/t premium over Great Falls.

Prince Rupert starting Aug. 1 2006 is now cheaper rail freight to port position (than Vancouver B.C.), is the shortest to Asia, and the fastest loading port on the west coast of North America. We are forced to pool these savings through the CWB.

Craig is being very generous in his numbers in favour of the CWB.

The CWB is obviously NOT maximising our wheat returns here in ALberta.

[craig]

Good comments Charlie. I think spot prices are totally relevent because they don't reflect subsidies. Montana and Alberta are great comparisons because they have similar distance to ports and the ports are close together.The question that needs to be asked is where is the Canadian system failing?

[SASKFARMER3]

Just a thought the USDA today decreased HRS wheat all over the world except in Canada In Saskatchewan last year their were piles of grain all over the place this year their is hardly any. Manitoba did grow a crop but just a normal crop and still stats canada comes up with a crop of 26 million tonnes. HM
THe CWB tells the world dont worry we had a great crop in canada with good quality. A used car friend of mine said thats like selling a used car and being honest with the seller. Yes its a real cherry just dont drive it to far.
The CWB is failing us, so is AG canada and thier comments this ag experiment that Canada should just sit their and do nothing is destroying Canadian Agriculture.
The USDA says Australia will produce 11 mill and argentina 14 and canada 26 plus the usa for HRS wheat.
Well emailing farmers in all three countries they are telling me that all are off the mark the drought in Australia will give a crop of 8 mill ton and argentina froze this winter and also the drought will take theirs lower plus the USDA is out on its own countries total grain and then theirs good old canada dont wory we have quality. but they tell farmers that top grades wont go up its the Lower grades the world wants.
ITS all a BIG SCAM!

[SASKFARMER3]

Also one more note friend of mine in ND showed last years returns for DUrum same quality as mine he made .70 Cents a bushel more or $28,000.00 more thats the commision I paid the CWB for handling my crop.
What a great system.
The HRS will be $96,000.00 or a total of $124,000 I paid one of those useless Directors wage for the year.

[ado089]

You make a valid point. Ag Canada and stats Can lets us down as much anyone. It is clear that when the USDA puts out an inacurate, or to be as bold as to say manafactured crop report, they have an ultimate goal in market manipulation. Our government doesn't seem to understand that this is as much a part of international markets as actual supply and demmand. Maybe we need to be talking to our politicians less about domestic policy and more about international policy...the rest will fall in place.

[SASKFARMER3]

I agree but go once to a meeting of Top Beurocrats from Ottawa and within minuets one can realize that they dont have a clue whats going on.
1. Example Western Farmers just dont get it their is no money in growing feed wheat. AH IT FROSE I DONT TRY TO GROW FEED WHEAT!
2. Farm Programs are for farmers if last years gross sales are lower than 50000 you dont farm! WHat if you were hailed out your farm reciets for sales would be minimal but insurance would pay but not be eligable, They didnt realize this.
THese are just from a meeting a week ago!
WE HAVE A BIG PROBLEM WHEN THE ONES THAT ARE PLANNING OUR FUTURE DONT GET WHATS GOING ON!