CWB Gagged

[ado089]

I was the big nasty grain company last year...It's amazing how much money you can make when farmers think they are grain marketers. I'm not saying farmers are stupid, but for the most part their specialty is growing crops, not selling them.

[charliep]

Just as an interesting note, Canada is 15 % of world wheat trade, not 20 % (that was the case 10 to 20 years ago). Exports have been declining in both Canada and the US. Crop problems in Ukraine/FSU and Australia should give up opportunity to increase to 20 % again but will depend on how the CWB markets.

I will make one other comment that Canadian wheat exports are likely to continue to decline with open market crops replacing western Canadian wheat acres and an emerging ethanol industry taking up the slack. No one will care as some of the non traditional exporters (Ukraine and Russia will not have problems every year) taking up the slack. I think 5 years from now, Canada will make up less than 10 % of world exports. Some may disagree.

I ask the above from the issue of competitiveness. It is not a subsidy issue as both the US and Europe are in the same boat as Canada (decling market share). Your eyes have to be focused on the new exporters.

Canola is in the opposite zone with expanding exports and domestic (albeit at ugly prices over some periods but wheat was no screaming hell either).

I raise this issues because as we have this discussion, the industry needs to be developing a long term vision of where they are going.

[AdamSmith]

ado089, my aern't you quite the victim!

Your little rant reminds me why I stay out of coffee shops. I call our local one the gloomfest.

The one thing that I look so forward to once the market opens up is the fact that I will no longer have to be forced to associate myself with the gloom and doomers like yourself.

American farmers learned to hate the cwb because the cwb would ship grain right into US border elevators, A couple of years back the cwb via Pioneer Grain put over 100 cars of Durum wheat into the Bottineau ND elevator in one whack. That did piss off the local boys, it caused their local basis to go through the roof. So Mr. Was Big Nasty, deal with facts not fear and fiction.

We have a free market in Canola, Oats, Rye, Flax, Sunflowers and the border is a non issue because prices arbitage grain freely flows both way without any hassles or ill feelings. The same will occur with wheat.

Oh by the way ado089 are you that naive to think that the cwb could have prevented the price of canola to collapse, do you really believe that through some magical wave of a wand the cwb could have taken all the oilseed carryover stocks in the world and make them just dissapear and then boom high prices.

If I recall one of the biggest reasons why canola stayed in the tank for so long is because selling Canola was the only serious way a farmer could generate cash flow because a 20% call on wheat with a $1.50 initial really doesn't pay too many bills. So, farmers just kept on selling because that was their only choice.

Oh and by the way, unless you didn't learn this from your former big nasty bosses, the grain markets are CYCLICAL, they have been that way for well over 100 years. Prices go up and they go down for dozens of different reason all of which no one entity ( see cwb) can stop from happening. So you can bitch that Canola was $5.00 but you fail to realize that if Canola was under the cwb the value would still have been $5.00 but you would have been delivering it for a $2.75 inital and the cwb would have tried to sell as little as possible, so probably only a 60% acceptance level and the carry out would have remained burdensom keeping prices low for that much longer.

Sure $5.00 Canola sucked, but the alternative would have been disasterous.

[Zaphod]

Just a couple of thoughts.

Why are grain companies not jumping into the debate? It's not because they want to avoid politics. It's because their margins on board grains are fatter than they are on non-boards. I've worked in the grain biz and I've seen the numbers. So if the margins on board grains are higher, why would they want to switch? Plus, if their CWB margins are higher, whose pocket is it coming out of? The farmers, of course. The fact that non-board margins are consistently lower tells me that the competition in those markets puts money into farmers pockets while the CWB system puts it into grain companies hands. It's pretty simple really. Figure it this way: $2-5/tonne better margin on board grain times 20 million tonnes is a pile of money every year that the CWB costs us.

But, I do think that the conservatives made a tactical error in the way they issued this order in council. It's going to raise concerns among the middle-of-the-road farmer who don't have a strong opinion of the board. Those on the fringes will still think the same way they always did. But Strahl could have done a much better job spinning this strategy and not look like a dictator.

[charliep]

Zaphod

Any thoughts on how to move this debate out of the philisophical area and into the area of creating practical solutions? Will that middle group you talk about use the current debate and upcoming odd numbered director election areas to both get informed as well as express their opinion?

I note your comments on grain companies profitability (paid elevation and carry costs), reduced risk/financial exposure, etc. Grain companies have operational issues with the CWB but very few of these see the front page of the farm papers. My take is grain companies have more issues with the CGC and interest in the Grain Act review that has just been released.

[ado089]

All personal opinions aside and lets say that a free market will generate more farm gate revenue. Will that increase in revenue give you enough money to make a significant enough political contribution to put someone in Ottawa who will represent you and and stand up to the big 5 producer groups in the states, who by the way next to millitary related groups make the largest pollitical contributions to US politics. Provided enough cash can be mustered up to have a political say, what will we say? The thing about Canadian producers is that it is hard to find two with the same opinion. That is in fact the reason why our needs are never listened to, no one can figure out what we are saying and this debate is a prime example. I agree the wheat board has some flaws and needs some reform, which has been happening over the past 5 years, but for now it's one of the last unified representations we have on a national and global scale. If the CWB is to come down we better make sure that we have some sort of lobby group in place that will be able to work with, governments, grain companies and food procesors to ensure we don't get trampled in this free market stampede.

With refrence to the fat margins made on board grains, they are closer to $15-$20/t some of wich is used to pay trucking incentives...so you may want to make sure you are getting a healthy trucking incentive or have a chat with your CWB rep to fix that, because that is a problem.

Given the choice between getting $1.50/bu now and knowing I will have another $2.50 coming or dropping my pants and selling $5/bu canola for cash flow, I'll take the $1.50 any day. Use the tools you're given. If you don't like the pool system take out a DPC, if you think the PRO's are good, take advantage of an EPO. You're not as shackeled as you think.

[rook]

Hopefully now the CWB can let go of some of the extra head count that has been hired to spread exactly what Strahl has now banned. They market less and less grain but have more and more staff. Everyone else innovates and does more with less but the CWB seems to manage to do less with more. If you want to know if the CWB is a farmer controlled corp or a government agency that is your proof right there.

Regardless what side of the CWB debate you're on we should all be concerned about the increasing costs of the CWB. Maybe if they were a bit more efficient we could get a real basis level on the FPC and us Canadian farmers could fully participate in 10 year high wheat prices.

[TOM4CWB]

ado089;

There is no reason the CWB can't compete for our grain. Ontario has had the biggest crop of wheat... and the Ontario Board increased market share... not lost it to private trade.

If the CWB earns our respect with trustworthy performance... they WILL get the majority of the wheat grown in western Canada.

Further... the CWB can use this performance based trust issue to leverage up prices to end users... especially in a sellers market which we are in currently.

Fear and greed are poor marketing tools... and the CWB has used them to "build" loyalty and good will with us growers? VERY irresponsible and stupid of them. Further Minister Strahl had an obligation to stop the CWB from the lie the "single desk" directors keep comming back to: that the CWB can't exist without the "single desk" which isn't part of the CWB Act in the first place.

I agree totally with Minister Strahl; CWB don't spend my money telling me and my family we are fools... and that the sky is about to fall!

The Liberals tried this for the Jan 23rd Fed election... and we all woke up on Jan 24... and the sky did not fall... planet earth is still here even though Liberals aren't in charge.

The exact same tactics will not change the fact that we are heading for market choice...

And that the world will not come to an end if the CWB needs to earn our business to get our grain.

It is only about 10 years late... and if the CWB disappears... it will be Goodale's fault... not Minister Strahl's.

God Bless the CWB
God Bless Minister Strahl

And Give them both wisdom!

God Bless Canada

[liberty]

The Winnipeg Free Press yesterday had a quote from Ken Ritter in reply to the question as to whether or not Strahl was his boss. The answer was a defiant "no". He also went on to say that since farmers pay all the bills of the CWB, he is only answerable to them.

The last time I checked, taxpayers guarantee the CWB's debt, as well as initial payments. Therefore, a representative of the taxpayer such as Chuck Strahl certainly is the boss of Mr. Ritter. Ritter and the Board have been getting totally out of hand in the last few months with their shrill, partisan yapping about how the sky will fall in a dual market. They remind me of a bunch of petulant, spoilt teenagers. It was time that someone took Ritter to the woodshed and reminded him that not all farmers by a long shot agree with such a hysterical assessment, and that they should not have to pay money out of the pool accounts to promote something they disagree with.

If the CWB had even portrayed a semblance of objectivity on the single desk/dual market issue, Strahl might not have had to resort to this action. Instead, the Board seems to have declared war on the Minister, giving him no choice but to act to end the chaos.

As far as any PR concerns go, unless and until masses of farmers take out memberships in the Liberal Party, the negative consequences for the Conservatives will be minimal.

[Zaphod]

The order in council may cause a few middle-of-the-road farmers toward supporting the pro-CWB candidate. But if the govt imposes a dual market, it won't really matter. I'm thinking further down the road. The conservatives are probably safe in all Alberta ridings, but there were quite a few close races in Sask and Man. This could bite Harper in the butt yet, if they need every western seat to get a majority next time round.

I've talked to employees of the evil multinationals and they say without exception that they are not interested in getting rid of the board. And they're not saying it out of the goodness of their heart. It's purely for profit reasons. So what does that tell you? It says that the scare tactics about the big bad multinationals is just a red herring for the lefties out there. Cargill is a big CWB fan.

[wd9]

AdamSmith, actually the canola would be about $4.80 because the CWB would have to hire 200 more people. Not including crushing and value added processing leaving Canada.