Barley Plebescite Discussion

[charliep]

For those of you who haven't 100 % made up your mind on the barley plebescite, just an offer to answer any questions and provide information to help help with your decision. One requirement is that whatever is discussed here has to relate specifically to barley and the questions that are being asked. Politics around the CWB/the questions the federal has outlined can go to another thread.

1) Do you believe the $59 mln benefit outlined by Schmit, Schmit and Gray? The argue I hear (and don't understand from a practical market sense) is that farmers would give up 100 % of the malt barley premium in an open market.

2)Given two distinct markets for malt barley (export and domestic malt processing), do you get adequate price signals from the market place to make good decisions? I could ask similar questions around 2 and 6 row.

3) What role does the CWB currently serve in malt barley marketing? Selection? Sales? Market development? Logistics? Pricing?

4) What barley marketing products and services would the CWB provide in an open market? What would the CWB need to do to get your business commitment?

5) I note the industry concerns expressed about overdoing the shift to canola in the coming year. I have the same concerns about barley. What will happen in the coming year if western Canada produces a 13 to 15 mln tonne barley crop and has 1 to 2 mln tonnes available for sale above normal requirements (domestic feed and normal malt sales). Tight corn supplies are optimistic but this has to be offset by increased Aussie and European malt barley supplies. What will 2007/08 look like if we maintain the current system? What will 2007/08 look like in an open market with a CWB alternative?

[parsley]

1. No, I don't.

[kamichel]

To number 1. About this malt premium. I was at the CWB days in Saskatoon in January and got a very depressing market outlook. They told us that when they sell malt they controle the supply that is if there is too much they only offer say less and sell the rest into the feed market to prop up the malt price. With their marketting expertise they claim that malt will be generally be 15 dollars per ton higher than feed price. That does not make sense to me because malt has never really gotten much of a premium over the feed price basis saskatoon Sask. For one if you grow malt barley it is a different barley that yields generally less than feed plus must be carefull how much N is applies so as not too have too much protien. Well some locations I think are unfortunate because they do not have other markets than the CWB. So if you grow a feed barley with 15 percent better yield, no worry about too much N then the 15 dollar premium that the board gets is actually a reduction, not a premium. Now to the 59 dollar premium that your study come up with well any farmer should know that that is complete garbage.

[Burbert]

NEWS FLASH The Alberta government wants the CWB crushed, so they, the Alberta Barley Commission can take over and be the board, maybe we'll even reinvent the Alberta Wheat Pool. Privatization has brought Alberta high electrical bills and crazy natural gas prices. Can't wait to see what they'll do to the grain business if given a chance. Good Old days here we come, lets turn it all over to the grain companies!

[Burbert]

Charlie you tried.

Answer to question 2.

I believe Yes.

[Jman]

the malt premium in an open market will only need to be high enough to secure supplies from the domestic feed market. some years there will be no premium some years there will be a significant premium. A good example is the feed - milling oat market spreads. remeber the malt market only needs 2-2.5 MMTs per year.

[kamichel]

Hey Burbert, the origional post said to keep politics out and try to stick to facts.

[kamichel]

Hey Burbert, the origional post said to keep politics out and try to stick to facts.

[Burbert]

It it is facts that you are looking for, keep on looking, this is the wrong forum, this is the baloney network! Facts just get in the way, here on Angriville.

[kamichel]

Sorry facts was maybe an error on my part.
There is two sides to every story so not my place for you not to make an opinion. I should have said political only. The thread states the discusion should be about the 5 questions being asked.

[HFL]

I worry a bit too about a big barley crop in 2007. However there are forward pricing contracts out there at decent prices so we chose to get some of it priced now. Its my opinion that if the CWB loses the single desk there will be a lot more barley marketed as malt. As far as the $ 59. premium, ahahahahahahhahahahahhahahahahahahh

[charliep]

In an open market (or for that matter a revised CWB), would you be more likely to sign a new crop deferred delivery malt barley contract in the spring? I look at yellow mustard where farmers will sign up the first 500 lbs/acre at a set price with additional supplies at the market price at time of delivery. Anyone who grows on spec takes their chances with their price based on market and the acceptance that contracted volumes will be taken first.

How much premium do you need on malt barley to justify growing versus feed? I see reference to a 10 to 15 % yield loss. Risk of not making grade/selection? Extra costs to grow (fungicides in wet, harvest costs to minimize peeling, cracking, more restrictions on drying, etc.)? Extra cost of carry/storage? Extra trucking costs (may be paid by the maltster/exporter)? More restrictions on when the buyer will take delivery. My number would be at least a 25 % premium ($3.75 to $4/bu in a spring I could get $3/bu for barley off the combine.

[FarmRanger]

1. $59 premium for malt?!?! What malt premium? Right now there’s a feed premium. What are we giving up again??
2. The market signals are to not grow malt barley at all. If there are buyers trying to signal me, they need a bigger fire and more wet blankets.
3. ???
4. A decent competitive price, if they can’t offer that, then I do business elsewhere.
5. I wish I knew Charlie. Right now I'm strongly leaning toward growing straight feed varieties, and quit trying to win the malt lottery, as the prizes have all but disappeared.

[craig]

Charlie
Under the current system the malt industry continually seems to be in trouble. There are no value chains involved and producers feel little loyalty towards the maltsers. I would suggest under a different system you might see a more American style system where producers are contracted to grow malt. With adequate price signals then producers might choose to be involved. For many producers like myself there is little incentive to play the current game. There needs to be a premium over feed to produce what is essentially an IP crop.

[kamichel]

How come the 2000 CWB employees have not come out with some prices on malt for new crop? Since prices are at the top and a monopoly vote this month they should have been more on the ball. Oh OK the cwb workers think that if a vote is coming on the monopoly they they cannot compete and why try. See you all back in Canada after the vote. Just another raspberry for the CWB.