Marketing Board for Green Lentils?

[chuckChuck]

Just wondering what readers think of the story as published in this weeks Western Producer page 5 "Sask. Lentil Producers Ponder marketing Board"? Marlene Boersch's report to Pulse Days entitled "Market Risk Management Tools for Green Lentils" produced a chart showing that Chinese lentils were fetching $900 US per tonne in Italy and Canadian lentils were only getting $480. US pardina $700 in Spain, Canadian Green only getting $485. Her conclusion in my words, marketers are trying to get volume for their processing and handling facilities and not focussing on getting the best price. What gives here ladies and gents? In my numerous postings about the benefits of the CWB I have heard over and over again from many of you posters about the incredible efficiency of the open market and all the benefits of having marketing choice and I see that with all the choices in the green lentil market (of which we control 80% of the export market according to Boersch) farmers are getting screwed by bad marketing??? In this modern information world, when we have faxes and email, how can somebody undersell the going market price by $420 CAD per tonne? That is incredible! In the next story below, Cal Kelly of Emerald Seed Products reminded Boersch that "Sask. Pulse growers was founded by free enterprise farmers who wanted to market their own grain instead of relying on the CWB" So the fisrt thing that concerns pulse growers and marketer Kelly is the politics of marketing boards?? Don't you think the first questions should be how does this happen and how should we fix it? No, the first thought is we don't want a marketing board!!! For all you posters out there who have made a career out of bashing the Wheat Board perhaps you should try balancing out your portfolio with some concern about the failures in the open market!!

[cottonpicken]

Are you some kind of COMMUNIST?

[Incognito]

From the same report:

CWRS

The CWB is unable to exert single desk power in the world wheat trade. The reason is that Canada represents only about 8.76% of world trade in wheat and 3.89% percent in world production. Being unable to market all wheat in the year of production, Canada carries over about 70 percent of its annual export capacity into the next year.

The CWB exhibits a high cost of operation compared to open market operations.

It has no ability to dominate the market because there are numerous alternative suppliers

___________________________________

Market power is a myth.
I agree Vader.
The lentil report is a good report.

[parsley]

chuckchuck,

Is all your family now Communist?

Parsley

[chuckChuck]

Cottonpicken. Since over 60% of farmers who voted, voted for single desk directors in the last CWB directors election, do you think that they are all communists? That's kind of funny, because the Communist Party dosen't do so well with the farm vote in western Canada.

Surely you have more to add to the debate than that??

[furrowtickler]

chuckchuck, what is the current malt price in Vancover? - say somewhere in the $300/t range. A far cry from what the PRO will get us.
The point is that there must be willing sellers before before there are buying oppertunities, all of us are guilty, including the CWB, of giving our product away.

[chuckChuck]

Furrowtickler. How do you know what the CWB is selling malt for? Do you think they are not selling malt at the going price and putting it into the pool accounts?

[cottonpicken]

I was just joking around,i mostly agree with you.

[mustardman]

Chuckchuck good points you raised on lentils. As we listened to Marlene's presentation the first thing that came up at our table was where did The rest of the money go? We were being paid US$200- $300 per tonne and our exporter is selling at US$500 per tonne!
All the while telling us that we were going to have to accept lower prices as "the Pipeline is full" !!
I agree our lentil exporter are dealing strictly on volume and could give a rat's behind about getting higher prices.

Unfortunately a lot of the posters on this website will reply to your comments by waving the freedom flag.

Freedom for Whom?

Freedom to get screwed by the grain companies.

[charliep]

Most people here can find this information out by developing contacts in grain industry. They do share this information.

The problem with lentils (or malt barley) under the market system that is being proposed is the inability to get a price signal out to generate a delivery commitment.

When you make the comment how do you know the CWB isn't making is the comment what with the current marketing system is I don't think there is a lot of contracted malt barley that has been selected. The CWB can't sell something that isn't commited to them. The CWB doesn't do selections - that is the job of a grain company or maltster. It also doesn't do sales - that is the job of the grain company/maltster. What it does do is control price to buyers and the market signal provided the farmers who will deliver the grain (or lentils).

Unless farmers get a better market signal competitive to the domestic feed market, there will not be a lot more malt sales in a year of an Aussie drought and a European quality disaster with the issue ability to secure supplies. A more cynical Charlie might look for that market signal in the January PRO ahead of the plebicite but that I am sure will be purely an accident.

Sorry I mentioned malt barley in a lentil thread. The lentil market would be much more related to durum than malt barley. Not so sure why just green lentils and not reds.

[Incognito]

The CWB is as disciplined as the lentil exporters - ask the Algerian durum buyers.

Why wouldn't wheat farmers ask for the same information that lentil farmers received so they could make an informed decision about where their money is going?

Why wouldn't the CWB give their sales info to farmers so farmers can see the value they provide in wheat, barley and des bly?

The pulse industry is undisciplined.

So is the CWB.

The CWB is exporting far more wealth out of this country than the pulse industry.

That doesn't make either of them right - but SK Pulse had the guts to put out the report from someone credible with industry knowledge - not some economic model.

Does the Board of Directors have the guts enough to do the same?

[furrowtickler]

mustardman, everyone was/is willing to sell at those prices because they had to. The cash crunch from the past 4 years have put us all in that position, times will change sooner than later. The CWB is supossed to return a premium for our high quality grains, malt and hrsw are still a joke and will end up that way - where is that money going?
chuckc - which pool acounts? Will we ever know what they are giving the malt away for - no!! All I know is what I recieve for my malt which is a slap in the face b/c I have no choice!
The open market will always pay what the farmer is willing to sell for, so if the farmer needs cash flow because of poor returns/deliveries from other grains, theyfeed on that.
Times are about to change from price getters to price setters. It is already happening, the maket is going to have buy our grain not take it b/c we are desperate.

[charliep]

Back to lentils/the marketing board.

Is the proposal for a compulsory marketing board? If compulsory, would it be governed by the current CWB act? Would it be a part of the crops looked after by the current CWB?

What products and services would it offer farmers? Price pooling? Cash marketing tools?

I note that many of the pulse processors are community based/invested in versus being the evil multi nationals. What products and services would it offer processors? Price risk management? Inventory financing? Transaction security/backing? Who would take on this risk?

What products and services would it offer end users? Would this organization create more value in the buyers eyes or simply be a price negotiator on behalf of Canadian farmers?

[wd9]

CC, you do have me thinking. At first blush, as Charlie says, price discovery seems to be an issue here. How often we hear, rise in xxx commodity due to slow farmer selling. Are the Lentil growers simply that uninformed? Maybe, I don't grow lentils so am not sure.

I hope this thread can focus on Lentils and not the usual CWB rhetoric. This can be an interesting discusion.

[sparki]

A marketing board will not increase grower returns. A reduction in total supplies will. IN 2005 Canada produced 1.3 mmt of lentils together with 2004 carryin, there as a total supply of about 1.5 mmt
exports run about 600,000 per year and in 2005 actual disappearance was about 1 mmt. Highest on record. But still 500,00 mt carryin again on top of the 2006 crop.
Too many stocks. Period.
IN years when prices were high, there was a threat to the supply. That threat is a big factor in how buyers view the market. Without it, buyers are hand to mouth, flow is disrupted, buildups start to happen, cash flow issues with farmers and processing factilities
become a marketing factor and prices get depressed. To get out of this funk, the answer is simple. Stop growing so much. There is only a limited amount of tonnes that will fit an acceptable price range for the grower. Over that and the price range drops.

It is nothing more simple than that.