Mustardman: let’s talk about the last barley study and what it says about the malt market.
For example, the study says:
For the 2002/03 crop year, Canada’s malting-barley exports fell sharply, totalling only 303,000 mt. This was due to the extreme drought and wet harvest weather in Western Canada that reduced significantly the region’s total barley yield and quality.
AND
Imports of malting barley that year were due largely to shortages in malting barley in Canada.
HOWEVER – anyone involved in the malt barley industry KNOWS exactly what happened. Because of the drought, feed barley prices climbed higher, but the malt barley PRO didn’t follow, making it more attractive to sell MALT-QUALITY BARLEY into the domestic feed market. The problem was not a lack of quality – an idea promoted by the CWB and suggested by the study – it was definitely and clearly an issue of the CWB not being able to provide the appropriate price signals to farmers to show what the maltsters were willing to pay (the PRO was diluted due to low-priced sales made early). Because the CWB itself knew it was challenged to get malt barley deliveries, it was reluctant to even offer malt barley to the maltsters.
It was this event that caused Rahr Malting management to (1) import Danish malt barley (at a huge premium over anything that anyone got paid in western Canada) and (2) openly criticize the CWB-system as it could now see how dysfunctional the system really is.
So – do I mistrust the latest barley study? You bet I do. This is just one example of many weaknesses in that sub-standard piece of work.
And Mustardman, you say “I still think that a single seller will return more than multiple sellers will”. I’ll give you this much - there’s an awful lot of THEORY that supports that “idea”. But the REALITY is that there is so much more involved to the equation here that I’m afraid it just doesn’t work with the CWB – particularly on barley.
For example, the study says:
For the 2002/03 crop year, Canada’s malting-barley exports fell sharply, totalling only 303,000 mt. This was due to the extreme drought and wet harvest weather in Western Canada that reduced significantly the region’s total barley yield and quality.
AND
Imports of malting barley that year were due largely to shortages in malting barley in Canada.
HOWEVER – anyone involved in the malt barley industry KNOWS exactly what happened. Because of the drought, feed barley prices climbed higher, but the malt barley PRO didn’t follow, making it more attractive to sell MALT-QUALITY BARLEY into the domestic feed market. The problem was not a lack of quality – an idea promoted by the CWB and suggested by the study – it was definitely and clearly an issue of the CWB not being able to provide the appropriate price signals to farmers to show what the maltsters were willing to pay (the PRO was diluted due to low-priced sales made early). Because the CWB itself knew it was challenged to get malt barley deliveries, it was reluctant to even offer malt barley to the maltsters.
It was this event that caused Rahr Malting management to (1) import Danish malt barley (at a huge premium over anything that anyone got paid in western Canada) and (2) openly criticize the CWB-system as it could now see how dysfunctional the system really is.
So – do I mistrust the latest barley study? You bet I do. This is just one example of many weaknesses in that sub-standard piece of work.
And Mustardman, you say “I still think that a single seller will return more than multiple sellers will”. I’ll give you this much - there’s an awful lot of THEORY that supports that “idea”. But the REALITY is that there is so much more involved to the equation here that I’m afraid it just doesn’t work with the CWB – particularly on barley.
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