marketing %

[wmoebis]

What approx %of western grain does the CWB sell directaly to customers and what %do agents sell on our behalf?

[TOM4CWB]

wmoebis,

I have been told this is "commercially single desk" information... which of course can change from time to time.

Generally it has been, over the last 10 years... somewhere around a 60/40 split with the AC's selling the majority, most of the time. The CWB refuses to sell in some markets... (approving the sale from afar) so as not to get their "hands dirty". If a group of sales are sweet AC sales soon become CWB customers.

Just a little reference to give context.

A AC(lets call him "Pat") was trying to drum up new biz south of 60... with a CDN Florida twist.

"Pat" visited this miller and was told he was welcome, hadn't seen anyone for at least 3 years. The miller looked at the samples of this years harvest and was REALLY impressed. The miller wanted 4 car's worth to rig up for a test run... and larger quantities later on. Since "Pat" has rights to the variety of this IP Specialty... he thought he was really making inroads and came home to the CWB to rig up the sale.

We are told, he was told, to get lost... that was the CWB's customer... and to go "find a tree to climb".

Now since this is all very sensitive information... the CWB of course will deny it... as will "Pat" as will the miller if they ever want a sweet deal again.

THis is the world of the "single desk".

[chaffmeister]

Tom's nailed it. I've heard CWB staff try to massage this by saying "in dollar terms" the CWB does more.... Whatever.

I recently met with a longtime colleague of mine from the trade who told me a story of a deal he was working on with a longtime buyer. Based on the price and terms from the CWB, he made an offer to this client. The client came back and said the CWB had directly offered the exact same package for $10 a tonne less. My colleague suggested to him to bid the CWB $5 below that. So he did and the CWB sold it - $15/t lower than they could have.

The irony is that my colleague still originated the grain for this sale and handled it for the CWB - but this time with no risk. He said he made more money this way than if he had made the sale directly.

Perhaps someone (Agstar? Wilagro? Vader?) could explain why the CWB does this. (I've seen and heard about these stories many times.)

Also - if these sales get into the "binder" for the directors to see, how are they presented so the directors think these are great sales?

By the way, the worst I've heard is $1.00 per bushel BELOW MARKET.

[Incognito]

Don't confuse the BOD and the left wing whacks with facts and dollar values, Chaff.

I may not be a Bruce Johnson fan but at least he should know whether the HOLY BINDER is real or really stupid.

Motiuk's background in transportation will be an asset at the boardroom table.

If the BOD keep poking a stick at Strahl, all 5 BOD will be Strahl appointees very quickly.

8 - 2 Borg - now elected
0 - 5 Choice - soon

8- 7 Borg

5 Districts up for grabs. It's exciting. The very same protection that Goodale thought he was saving the Borg for an eternity - may end it from within. But hey, he thinks the rail rate cap saves farmers money, so whatever.

Measner guaranteed himself a severance package last week. Imagine, the Borg without the leader. How will they ever think?

[chaffmeister]

Another story of interest took place a few years ago. An offshore buyer was looking for #2 CWRS for nearby or spot loading. He mentioned to an AE he knows (but not involved in this particular trade) that the CWB is refusing to sell the 2s that he wants and is pushing 3s on him. The AE, knowing that the grain handling system was awash in 2s (and little to no 3s), and seeing that this was a spot bid, told the buyer to go ahead and buy the 3s - he'll bound to get 2s anyway. So the buyer took his advise and booked a cargo of 3s - at the then-current spread to 2s. Loe and behold - the vessel was loaded with nothing but 2s.

If this sale gets into the directors "binder", it probably looks like a good sale of #3 CWRS. But if they knew it was a really a sale of #2 CWRS, I wonder how it would look...

[chaffmeister]

Here's a story that would never got the director's binder.

A few years ago, an AE sold three cargoes of Fd wheat to South Korea - in a year when Canada had piles of Fd wht to clear.

After making the sale the AE went to the CWB to negotiate a price. The CWB had heard about the sale and took a hardball stance with the AE because he was short and needed to cover. The AE continued over a period of time to try to negotiate a good market-based price, but to no avail. The CWB was firm - they figured they had this guy in a spot and were going to show him never to short the CWB!

As time to cover the sale was running out, the AE went to the CWB one last time - no change in price, even though the market had softened. So the AE covered the sale from Australia.

What the CWB had not realized (and they should have) was that the sale was made on the basis of "optional origin" - the seller could ship the wheat from wherever he wanted.

So the CWB missed the sale altogether due to excessive bravado and stupidity.

Agstar77 / wilagro / vader - do the directors hear about the stupid mistakes the sales depatment makes?

How all-powerful is an institution when it's run by mere mortals?

[wilagro]

Lots of myths and stories related...but not one substantiated as being TRUE. Stories take on a life of their own and soon become GOSSIP and in some cases LIES if put in the wrong hands.

[wmoebis]

I am sure there is and I am sure these stories can work both ways.
I was just trying to establish how many customers would be willing to deal with line companies only or how many would look at other suppliers if the CWB was to disban. If line companies can improve world markets I would like to hear proof from them on how they can do that, over our presant system.
I would like to hear from both CWB represenatives and line companies, On their views, not second hand.

[wd9]

Chaff or Incognito or anyone I guess, do you know if the KFT report is on the web? Wasn't there one done on durum also, although it wasn't pretty in terms of benefit, so it seemed to have disappeared. Even tried g00gle.

[chaffmeister]

wd9 - I've looked for KFT study online to no avail. All I have in hard print is the executive summary - seem to have lost the original. Think I'll ask Ed Tyrchniewz (the T in KFT) to see if he has copies.

[TOM4CWB]

wmoebis,

One of the problems in the present system IS the monopoly... which places the CWB in the position of being "GOD".

If the CWB were to step back a few steps...

and become strictly a facilitator... implementing grain growers marketing plans... instead of creating sales and marketing schemes that work against those very growers the CWB is supposed to serve...

The monopoly issue would disappear.

I don't believe that such raw and difficult relationship occurs between UFA, their suppliers, and customers... or Federated Co-operative and their trusted partners.

THis is not rocket science... the rest of the world does these kinds of deals every day... and most times I see satisfied partners creating value for each other!

[chaffmeister]

Wilagro and wmoebis:

I had to look pretty hard but I think I found something that we actually agree on. For some time now I have been advocating that we need to know the facts – not rumour, not platitudes, not rhetoric. FACTS. The true story about the CWB. And from your posts it’s clear that you agree.

Wilagro, you don’t want to hear stories that aren’t “substantiated as being TRUE”; nor do I.

wmoebis, you want to hear from CWB representatives and line companies, “not second hand”. I’d like to get the real facts on the CWB performance too.

Unfortunately wmoebis, I doubt we’d get anybody from the trade to speak on the record about some of the things the CWB has ALLEGEDLY done – as I’ve said before, it’s not worth the commercial retribution. (Some of the stories I’ve told are first hand – I just need to remain careful; the CWB can’t hurt my business anymore, but there are others involved.)

So let’s go there guys. Let’s demand some facts out of the CWB. I’m not afraid of the results – are you?

If we were able to get the real story – not an economist’s spin, and not a diluted audit – but the real facts, then we’d be able to truly and correctly judge the CWB for what it is – either a global market powerhouse, or a feeble fraud.

[wmoebis]

OKAY CHAFF, now we have a starting point. I am sure that all from trade, including CWB, are just sitting back smiling and watching we farmers banter. They all have their agenda some hidden, some open. Pleasing shareholders and keeping stockes happy are #1.
We all have issues that are important to us in our own operations. They will differ in many ways from each individual and area but are all valid to each. Are we looking at long term viability, short term profits to make our books look good for quick sale.

What ever our reason our common goal is to reap the most returns from our product and labours. In order to achieve this we need the true and hard facts and the future direction (written in stone)from ALL players that do and will effect us and our immediate decisions.

[TOM4CWB]

wmoebis,

I cannot agree that maximising returns on our families farm is our principal reason for being in the business of growing grain.

Standing for a free and democratic society is more important to our next generation than 30 peices of silver.

Not one of us can rent a u-haul to take physical assets to the pearly gates... that I know of.

Dishonest money dwindles away,
but he who gathers money little by little makes it grow.

People curse the man who hoards grain,
but blessing crowns him who is willing to sell.

Better a little with righteousness
than much gain with injustice.

[cottonpicken]

So if your not worried about maximising returns on grain why worry about the cwb selling grain cheap?

Did you have a religios experience lately?