WCWGA and WCBGA invite only

[TOM4CWB]

CHuckchuck,

The N.D. Price is arbitaged internationally.

In Montana 1DNS13.5 is worth $5.60/bu. THis is a good $.50/bu above CWB prices...

And the CWB buyback and cost to pay agents of the CWB to get to the international market all add up.

Except that we have a lower cost to get to that international market than Montana has... which should be the CWB's ace in the hole. There is no economic reason to stop exports into the US. I see the US A-Trains daily heading up HWY 36... then going back loaded to the US. What do you think is going on...


The "multinationals" and agents of the CWB like what is going on... and will gladly take "profits" anyway. ... The monopoly helps them today hence they don't complain about the CWB.

I simply don't get it.

THis "monopoly" scam is like the Montreal telemarketing scams.

We are told this about the scams...

If it is too good to be true... then it is.

We Don't get something for nothing.

Am I the only one who gets it?

What don't you "single deskers" get... what is driving your mind sets?

Power is derived from somewhere... AND ALWAYS AT A COST! CWB power is no different!

WHen Montana Human consumption barley is worth $4.30/bu just across the border in Montana... shouldn't this tell us a story?

When the feed market interior in western Canada sets the CWB base prices for human consumption grains destined to international markets... how exactly is the CWB "extracting" any value for anyone but the livestock industry?

Year after year... time after time!

Fill me in... it make no logical sense.

[AdamSmith]

Chuckchuck, I haven't sold any wheat in ND lately, I don't want to be led off to jail in handcuffs!

But I have sold plenty of domestic off board wheat and barley, and have never once felt that the multinationals were slaughtering me.

I don't take offence at the opinion that a farmer may feel he will not do as well under an open market or that the CWBII won't be able to offer him the same service and the same price protection when it is functioning in the open market competing for farmers business.

I just disagree, that that will be the case, in fact under almost any market condition I believe all farmers will do better once the single desk is toast.

What I take offence too, is the outrageous comments and the fear mongering that seem so detatched to reality. The words chosen and the arguments made in defence of the current structure are nothing more than over-heated rhetoric that is not conducive to debate. In fact 90% of what is being said by the anti-choice crowd amounts to nothing more than drive-by slurs of derision.

[peaqueen]

Depending upon the year 4o to 80% of the CWB monopoly grain is sold by accredited exporters. If you go to the CWB website you can see that the accredited exporters are all large major grain companies and multinationals. To be an accredited exporter you must be a large grain company as you need a seat on the Winnipeg Grain exchange so small companies need not apply. Reality is that the CWB actually enforces the "Big Companies Only" marketing strategy for export grain.

I believe the process is that the accredited exporters call the CWB for the price that they may sell grain from Canada at.

The CWB in their infinite market capacity set the price.

I would suggest that if most farmers had been asked if they wished to sell $4.65 cent wheat this year (which is what we expect to get at years end) most farmers would have used some
appropriate phase akin to take a walk in the park.

So as we are slaughtered we need to ask: Is the sheep in wolves clothing or the Wolf in sheeps clothing?

Perhaps we now understand why international buyers and elevator companies like the CWB central supply collection agency. After all, in short markets competition can be nasty.

[peaqueen]

Customers
Accredited exporters
Europe / Africa / Mid-East / Former Soviet Union
Company Commodity
ADM-Benson Quinn (Division of ADM Agri-Industries) Wheat, Durum Wheat, Feed Barley, Malt Barley
Agricore United Wheat, Durum Wheat, Feed Barley, Malt Barley
Agro-Hall Ltd. Wheat, Durum Wheat, Feed Barley
Alfred C. Toepfer (Canada) Ltd. Wheat, Durum Wheat, Feed Barley, Malt Barley
Bunge of Canada Ltd. Wheat, Durum Wheat, Feed Barley, Malt Barley
Canada Malting Feed Barley, Malt Barley
Cargill Limited Wheat, Durum Wheat, Feed Barley, Malt Barley
ConAgra Limited Wheat, Durum Wheat, Feed Barley, Malt Barley
Eagle Sterling Co. Limited Wheat, Durum Wheat
James Richardson International Limited Wheat, Durum Wheat, Feed Barley, Malt Barley
Louis Dreyfus Canada Limited Wheat, Durum Wheat, Feed Barley, Malt Barley
Maple Leaf Foods International Wheat, Durum Wheat
Parrish & Heimbecker Wheat, Durum Wheat, Feed Barley, Malt Barley
Paterson Grain Wheat, Durum Wheat, Feed Barley, Malt Barley
Saskatchewan Wheat Pool Wheat, Durum Wheat, Feed Barley, Malt Barley
Sojitz Corporation of America Wheat, Durum Wheat, Feed Barley, Malt Barley

In any given year, the Canadian Wheat Board (CWB) markets over 20 million tonnes of grain to more than 70 countries. Total sales revenue for western Canadian wheat and barley reached $5.8 billion for the 1996-97 crop year.

While the majority of sales are direct, where the CWB negotiates directly with the buyer, there are also sales that are made using a CWB accredited exporter. Accredited exporters are national and multinational companies authorized to purchase grain from the CWB for resale to customers and other exporters.

Many accredited exporters are tied into extensive sales networks and markets that complement the CWB's sales efforts. With branch offices scattered around the globe, these companies can make direct contact with customers in markets the CWB would have to travel to, thereby helping to reduce unnecessary expense.

Accredited exporters also facilitate sales through freight sharing and acceptance of financial risk. In some cases, holds on ships can be shared between Board and non-Board commodities. In addition, some buyers may present financial risks not acceptable to the CWB. Accredited exporters provide a valuable service by assuming this financial risk.

By working with more than 20 accredited exporters, the CWB can meet a variety of terms set by the customer. This business approach allows the CWB to sell Prairie farmers' wheat and barley around the world.

[peaqueen]

Small companies need not apply.

[chaffmeister]

peaqueen:

Not sure of the point you're making - that size matters when it comes to AEs.

But for clarity, being an AE has nothing to do with the "Winnipeg Grain Exchange" - nor do you need a "seat" on it.

Also, I will stand corrected if I'm wrong but I believe that, in its final fling with the CWB in trying to get coupled up with Dakota Growers, Praire Pasta Producers (a group of farmers) was supposed to become an AE (so that it could export durum on behalf of its members).

Typically, before the CWB will approve a company as an accredited exporter, the company has to demonstrate that it brings something to the table - connections, networks, ready access to markets that the CWB would have to work at developing. Also, most of the AEs on the list you got from the CWB website have been AEs for a gazillion years. By now, they're all used to the CWB going direct and undercutting them when they bring new business.

Guess my point is that if I wanted to become an AE tomorrow, I couldn't because I wouldn't add any value - no new customers. (Which is basically what what I think you're saying, but for a different reason.)

It has nothing to do with the size of my member ship at the Winnipeg Grain Exchange. Which, last time I looked, was pretty much the same size as every other member ship there.

[peaqueen]

This discussion began with the fearful thought that once the CWB was gone we would get "slaughtered at the hands of multinationals".

My point if all multinationals are bad and determined to slaughter us then we should define which multinational companies will slaughter us.
Those at large (not collectively organized by the CWB as AE's) or the
same wolves who would buy your grain if the CWB was made optional.

What people fail to realize is that a large percentage of CWB grain is marketed by AEs.

To be an AE you need to be a member of a recognized commodity exchange, which means "small companies need not apply"

Small companies serve small companies.
But in our system small companies cannot export direct they have to go through an AE.

So I ask who does the CWB serve best, it would appear to me that the current rules of the CWB favour the multinationals.

Which is why we need to allow small companies to export grain in addition to the AE. Open up the door a crack, and let some air in the old boys club.

[peaqueen]

See that AE need to be a member of an accredited commodity exchange:
((d) The company is required to be a member of the Canadian Ports Clearance Association in the case of shipment from export ports (886-167 Lombard Avenue, Winnipeg, MB R3B 0V3, tel 1-204-942-2424). The CPCA requires that you become a member of a recognized commodity exchange.

[chaffmeister]

FWIW - Of the AE’s listed on the CWB website, these ones have no known affiliation to the WCE:

Agro-Hall Ltd.
Canada Malting (used to be a member – no longer listed though)
ConAgra Limited (doubt this Canadian division even exists anymore)
Eagle Sterling Co. Limited (who? More on this one below)
Maple Leaf Foods International
Sojitz Corporation of America
BARI – Canada, Inc.

Can’t say for sure, but I doubt any of these are members of CPCA either.


Specifically, to your comments:
……...To be an AE you need to be a member of a recognized commodity exchange, which means "small companies need not apply" ……...
...……But in our system small companies cannot export direct they have to go through an AE……...

First – I doubt the rule that says you need to be a member of CPCA and a recognized exchange still applies (or at least I doubt it’s enforced).
Second – any small company can be a member of the WCE. (or now, a “participant” or shareholder) Even individuals can. So, if size matters, it's not the exchange that's keeping them from being an AE.
Third – Eagle Sterling Company Limited (one of the AEs listed by the CWB) appears to be a one man shop; none other than Gord Machej, ex CWB Commissioner. Now isn’t that interesting. I wonder how much business he gets and for which markets that the CWB can't access on its own....

As I mentioned before, a very small company – Prairie Pasta Producers – was supposed to become an AE (at the CWB’s suggestion and insistence) because it would’ve given the CWB access to a market it can’t access on its own – Dakota Growers.

...……it would appear to me that the current rules of the CWB favour the multinationals……...

I doubt any of the multinationals would say that being an AE is an exciting and profitable experience….

.........Which is why we need to allow small companies to export grain in addition to the AE. Open up the door a crack, and let some air in the old boys club.........

I agree with you – the CWB’s policy is restrictive.