Marketing Solution to Farm Crisis

[chas]

Chaffmeister I like your reasoning because I think you proved one point for me. The North Dakota farmers have proven that if you remove yourself from the open market, price stablity can be accomplished and possibly supplies could be managed also. My thoughts could be changed about the CWB in one way lets put domestic sales of wheat and barley on the open market to create the very thing that is happening in North Dakota. If like industries can be created here to stablize prices for farmers I'am all for it. Lets leave exports to the CWB as we want to keep as much value added here, lets not take it across the border. I think most farmers want dual marketing to include border acrossings which will cause nothing but grieve with American farmers. I believe the Government of Canada has made policy in the past that favour industry being developed in the east on the backs of Western Canadian. Does that sound like a simple democratic solution that could help our industry. Parsley and Tom4cwb how do you like this theory. I hope you can meet me half-way. I'am trying to find a diplomatic solution to our bickering. Chas

[chaffmeister]

Chas: you're right - the guys down in North Dakota have removed themselves from the open market (at least on the portion of their crop tied to their investment in the pasta plant). The flax grower I mentioned a while back did the same thing.

Now that we may see eye to eye on this, the next problem you and I need to solve is how do we get the CWB to give up the domestic market?

And one more thing that we may never solve. How do we determine if the CWB is really doing the job we need them to? you see, I'm still not convinced that they are providing value on exports.

cm

[parsley]

Don't pressure too hard Chas! You're such a likeable cuss, I'm glad I'm not living too close to you or I'd maybe talk you into letting me buy your foundered horse at midnight over that dandelion wine. What about some trial runs? Would this mean you'd be game to let the local pasta boys have a go at it for awhile? No going through the Board?
parsley

[ianben]

Hi Chaffmeister
Nice to hear a young farmers view. Congrats on the new baby, children truly are a gift and can bring such joy.
Just a couple of points really
Futures are necessary today and yes can be used to our advantage if we know, as I am sure you do, how to use them.
They exist however as the best solution YET to cure OUR marketing problem.
I maintain we have a problem with manageing supply and demand and it is OUR problem, No one else can fix it for us. Governments CWB grain traders have all tried and failed.

We must help ourselves!!!

We are a bit like an alcoholic, just an example I don't mean to cause offence, who thinks the barman is his friend if we think any of the above can solve our problem.
Like the alcoholic we need to see the real problem and get HELP.A marketing AA,

Now about that flax farmer.
Is he still a farmer or a flax bar maker with a hobby farm.
I have no problem with hobby farmers so long as we recognise them.
At the moment I am a hobby farmer myself.
A bit more about ianben
First we added value to our grain by rearing beef got to 400 bulls/yr calf to slaughter. Then in 96 came BSE, no customers, no business. Watch-out GM!!!

We saw a little nitche, for small bale hay and straw for riding ponies, all those people must be good for something, they are a pain in the butt when we want to move the combine.
Now straw makes up to £90/tonne and wheat is just £72/tonne.
So have I added value or am I a hay and straw dealer?
I think that I am a hay and straw dealer because that is were I make a profit. The farm is actually a liability because we try to sell what we produce and sometimes our quality is not good enough, we will never control the weather. So now we have 30 cattle again, as a waste diposal for the bad bales, not because I think they will make money.
This is my point about all this adding value IF it works it works better without the farm so why bother to farm.
If those guys in Dakota get bad weather and their wheat won't make pasta what then.
Now cm its 15yrs on. What do you advise your son to do
Does he run the business which requires a pick-up and a mobile phone AND has a regular income.
Or borrow loads of money and farm.
Re rats
I don,t see a gap in the rat bait market at the moment, perhaps after I return from my holidays in Alberta I'll reconsider. How many rats did that guy say we could fit in a suitcase darling.
Still can't believe there are no rats in Alberta. My daughter wants to MOVE.
Regards Ian

[parsley]

A few interesting qoutes in the Royal Bank's Agriculture Business Review, November/98 is from a study for the CFBMC called 'Change and Management and the Human Factor in Agriculture'.

1. It found "perception is the dominant factor among farm managers prompting them to action or inaction".

2. "Power from within, in other words, will determine a farmer's ability to manage change from without".

3. The respondent's ability to act was closely linked to his belief in his ability to control his destiny"

4. "...help farmers channel change and stress by " re-framing" their perceptions to focus onthose areas of their business where they have some control".

Does that add any insight about our individual views?
Parsley

[Steve]

Hi!!! Steve the retired farmer and I would like to participate in your discussoins because I still am a farmer at heart. My comments are only that, not saying other peoples ideas are wrong or right. I am on my own computer now and can put my two cents in without bugging Chas.

Parsley
I did not say the majority is always right, but always rules in the democratic country. Most people are like sheep and a good leader can convince them to fallow regardless of wrong or right. That is the way majorities are formed. Later they may realize that was not what they wanted so they vote that person out and elect a new leader.
That is the way the women over ruled the men by gething together and convincing the men to fallow.

Chaffmeister
Re-How do we know if the CWB screwed up. Very simple, if you think they did not market you wheat and barley the way you want then they screwed up.
Re-CWB phoning farmers. Just a expression by interpreting some comments made by individuals on this topic,that CWB should have not done this or that because it was not in the best interest for farmers. Also did not disclose the pooling and pricing of grains. You should keep in mind that the CWB is a none profit organization and there is no advantage for the elected or appointed members to cheat the farmers. I am sure the CWB has to make decisions and at a later date realize they were wrong, but all of us are working with hindsight when we comment on their errors. We are all smart on hindsight.
Re-CWB parked on the shelf and can not work with an " F' as all the corporations do. We have to look at the CWB in a bigger picture. The board not only markets our wheat and some barley for export, also tries to be fair to big and small farmers across our great country. Yes we have the East, the West also the greedy,the needy and the unfortunate, which puts the CWB in a different category than the corporations that only look after their interests.
We can change the action of the CWB by attending all their meetings and voicing our needs. If that doesn't work, we can get some of you to become leaders in a farm organization and all of us will fallow and as said before majority rules. I think we as farmers have one big problem to accomplish this,talk a lot, do nothing about it and our pride over rides common sense.

[Steve]

On the above message fallow should read follow sorry my typing finger and brain were not matched up.

[chaffmeister]

Steve, I am afraid that you are more trusting than I. Concerning the CWB you say "if you think they did not market you wheat and barley the way you want then they screwed up".

You see, in my view that's the whole problem. Assuming you want the CWB to get the highest prices on the most amount of wheat (maximizing your return as a farmer), there is no way you can tell if they are. If I have someone working for me I need some way of checking to see if they are really do the job. Only then can I dismiss them if they aren't.

Now let's assume that policies change and there is some way to monitor and guage the CWB's marketing success. If it's determined that they screwed up, then what? Do we replace the CWB traders? The senior staff? The directors?

This may seem a little pointed toward the CWB and not the topic (Marketing Solution to Farm Crisis). But I think it is very relevant. Until we can get past whether or not the CWB is the solution to marketing problems as some might suggest, the CWB and it's ability to extract the best return for farmers will remain a hot topic.

We need to come out of the dark. The CWB needs to be open about its marketing successes. It's nice to know the CWB is doing a great job in market development, what a great job in varietal development they ar doing, what a great job they are doing at educating customers on the finer points of milling Canadian wheat, or what a great job they are doing taking on the nasty railroads. But the one thing we really need to know, they aren't telling us - we need to know if they are doing the job at hand - making as much money for western Canadian farmers as possible!

A point to ponder - the CWB could quite successfully achieve all the "extras" it says it is doing as mentioned above WITHOUT being a marketing agency.

I'm not necessarily anti-CWB - I just don't see any evidence that it is doing the job we need done. Would be nice to get thalpenny's thoughts.

cm

[chaffmeister]

Here's a thought:

Remove the CWB from all marketing of wheat and barley.

Make the CWB responsible only for all non-marketing activities that it does now - market development, varietal development, input on grading issues, market research, provide credit on export sales, monitor the system to ensure farmers are getting a good shake, etc.

Could be funded through a check off.

Now this is fun to think about. Take the "reformed CWB" and compare it to the Western Canadian Wheat Growers. Without marketing in the mix, these two might just see eye-to-eye. Wheat industry development and watchdog. What a concept!

[TOM4CWB]

Well guys,

I guess I don't explain my problem clearly enough about the CWB.

If the CWB was made to "work for grain farmers" why would it put buy-backs $20.00/t to cause a tariff on the export of lower grade wheat and barley?

THe Western Grain Marketing Panel stated that the CWB could not use the single desk to extract a premium on our feed grains!

Just ask anyone about the new feed barley program the CWB put in this fall, they didn't even get an interim payment.

We asked the CWB to end the feed barley pool at the end of November, which would have allowed the CWB to start fresh and market barley in the spring of 2001.

Now the barley pool is stuck at $2.00, what chance does the CWB have of attracting $2.50/bu away from the domestic market? None.

When the export market is at $2.60, and the CWB has 1 million tonnes in the pool at $2.00, it cannot return the $2.60 to farmers, and the domestic market gets a free ride!

I want the grain farmers to phone the CWB and do a contract with them when they offer a fair price, not have the CWB deciding what a fair price is for us, cause they don't know.

This would be a true north strong and free Canada!

We can work together, if we learn to respect each other, and allow the freedom to each other to make a mistake from time to time, that way we can learn and grow!

[chaffmeister]

TOM4CWB:
I can't comment about the buy-backs being $20/t (over the PRO I assume).
I'll take your word for it. However, I think thalpenny has answered the buy-back issues quite well. The buy back reflects the spot market. The PRO is the expected total pool, or average price over the year. As you know, in any year that prices trend higher, the PRO will lag - and that's a major problem for the barley market. You talk about the export market being $2.60 while the pool is stuck at $2.00. Isn't this $0.60 difference roughly the $20/t you're talking about?

Maybe there's something else that I'm missing. Is there?

The idea of a shortened pool period is a good one - particularly for barley. I also like the idea of using Lethbridge futures to price CWB barley. If the CWB used it properly, they could respond much better to the chainging market and be able to stay current. Perhaps they could offer an initial price basis (instead of a fixed initial price).

cm

[chas]

You boys have got my friend Steve on the thread now. He will keep us in line and point us in a general direction of cooperation and sustainablity. You young fellows with all your book learnn and such need some commonsense guidence. I need spelling lessons.
I know my theory of marketing agencies can't be proven with out a big over haul of our marketing system for all farmers in the world. But the system you are talking with a open market has proven since my great grandfather was a pup that it has kept the family farm industry on the verge of bankruptcy. The CWB is limited in gaining a higher price for us because of the commodities market hold on world pricing. Can't you see that there is another way to discover price in a more stable manner than what we do. By orderly marketing and by stablizing price, supplies will also stablize. Confused you are right? Lets put out a fair asking price, when the price is accept they must take delivery of the actual commodity before they can resell it. After all we are the ones with the storage. This would take the large money traders who manipulate the market to their advantage out of are market place which is run on rumor and speculation. We done need their big money for price discovery as it causes a false and distorted market that makes no sense to reality. If you think I'am wrong just try and make sense out of market movement explainations by experts from day to day. Its a whole industry that has no relationship to what farming is trying to do. When the markets are short on production' traders are slow to move so they can line as many of us up as they can to make large profits. Farmer Agencies could give us better advise then we are receiving now. I hope I'am clear as mud now. If you believe that the USDA or anyother supply counter in the world is giving us the proper supply figures you should be convinced that the CWB is doing a job for you too. Chaffmeister I do believe if this marketing thing was left to you a me we could win the nobel peace prize for something. We are both willing to take and give in the present marketing system. I will give you the
domestic open market if you give me farmer controlled marketing board for export. Chicken Chas here.
Have not fed a chicken since that one kick me when I was 10 years old.