malt barley PRO

[caseman]

I was wondering what the 2 row malt price will end up being. In the midst of hauling some last week and more next week.

PRO now is $2.90 bu, inital price is $2.24 and I took a 90 percent EPO.

Feed price looks fairly attractive about $2.70 depending on which elevator.

It sure would be nice to get all the money now instead of waiting.

Does anyone think we will see that PRO go up to the$3.10 - $3.20 range???
Or did the board presell too much of the barley too early?

[charliep]

Apologize for stepping in/should let others comment. Super bowl half time/will toss in my two bits (hopefully others will comment).

Don't know how to answer the forecast question. A CWB hint the malt barley PRO is $25/tonne under valued. Don't know how much the CWB has sold but know given current prices that once the pre-sold is covered, the PRO is likely to increase fairly rapidly given current international prices (about the only source of good quality malt barley in the world). No help to your decision.

If I had malt barley today, I would deliver to this market (assuming reasonably competitive with the feed market when you include things like VIP, low pro premium, trucking allowance, etc.). Realizing there are lots of other issues that impact marketing decisions including cash, I put a high priority on satisfying long term customer needs. Our credibility as a supplier is on the line this year.

Back to the Super Bowl.

[bgmb]

CWB is about %80 sold the PRO isn't going up much. You should look at getting your barley trucked to Lethbridge, might work out better.

[charliep]

bgmb

Not picking on you but 80 % of what? The normal 2 MMT the CWB program? If farmers were to get a true market signal, what would this number be? 2.5 MMT? 3 MMT? Don't know the answer to this question but I do know farmers are not getting the information to make an informed decisions.

[caseman]

bgmb,Back in Sept. I signed my malt contracts for 550 tonnes. I hear this year the penalties for not delivering will be in $25 tonne range.

It could get very expensive for not delivering. Anyone been charged for not delivering?????

[caseman]

Caseman, I do know guys are being charged a penalty for backing out of their contracts. Not sure exactly how it works, because i know some of my neighbors havfe been charged $25/ton. Then last week talked to another guy at an elevator an he said he was only charged $7/ton??

As far as your question on the Malt Barley, I would expect the current PRO on ss2row is pretty much at its limit.

[caseman]

Caseman, I do know guys are being charged a penalty for backing out of their contracts. Not sure exactly how it works, because i know some of my neighbors havfe been charged $25/ton. Then last week talked to another guy at an elevator an he said he was only charged $7/ton??

As far as your question on the Malt Barley, I would expect the current PRO on ss2row is pretty much at its limit.

[charliep]

Not to belabor but I still like to look at mechanics of the market.

Last year (2006), western Canada grew about 9.25 MMT of barley. Historically something over 50 % of barley are malt varieties. Before quality, that would mean 4.5 to 5 MMT of western Canadian barley is potential malt. Some of this barley will be suitable only for the feed market. Some will be suitable for a lower quality/price malt markets. Some will go the high quality/higher priced markets. No one likely knows how much is available for each market.

Exporters/maltsters are the ones that do selections based on brewer contract specifications. They obviously have pricing ideas based on what they can sell malt for but at the end of the day, they do not control the price they pay. For sure, they do not control the price/payment signal you get.

The CWB has no role in selections. They do control the pricing side of the equation and the payment you recieve.

From the delivery side, the trade (maltsters and exporters) controls your access to the market - this is different from wheat which is grade based - once it graded, that is how it will be delivered.

Maltsters and exporters control when your malt barley will be delivered. This is different from wheat where delivery is controled by the CWB through contracts (A, B and C) and delivery calls.

So when you look at all the above, who controls how much malt barley is delivered within a crop year? Important in a year like this one where additional sales could add value to the malt pool and made the decision being discussed here easier.

[craig]

So important question is. The $25.00 increase in the PRO suggested for FEB. Is it real or just an attempt to influence the plebisicite? If it is real the Board should have announced it earlier in an attempt to keep more malt from ending up in the feed market.

[SASKFARMER3]

Delivered first week of January all barley 0 dockage and was paid 3.05 a bushel for a 10 mile drive.
So the CWB can take their malt Contract and stick it where the sun doesn't shine.
One other thing nuke your sample for under a minute in microwave and get out of paying the penalty.
Neighbour delivered his malt like a good CWB wanted him now has to wait a year for 2.90 something is wrong

[charliep]

Just to highlight, it is not the CWB that suffers here. They likely don't care whether you deliver or not - the issue whether they keep barley at all, issues around the CEO, etc., etc. are more important than selling product and meeting customers needs.

The group that are suffering is the domestic maltster and the export buyer. Both signed contracts in good faith this summer and used this information to price malt to brewers. They also have opportunity to sell malt at extremely high prices and are willing to pay farmers high prices.

[charliep]

Saskfarmer, I know a few guys that did exactly what you said with the microwave.. Your getting penalized if your sample is no good.

Craig, just curious where you heard this about the $25/ton increase in the PRO?? That would be the icing on the cake if these putz's in Winnipeg would just coincedently raise the PRO on 2row this month.

You know it would remind me of the time they took of the Crow. Flash some cash in front of a farmers eyes short term, and they forget about the long term reprucussions.