cwb and barley

[sask]

Has the CWB ever thought about how they could
operate a voluntary barley pool?

[TOM4CWB]

Sask,

In 1993 during the Continental Barley market, the CWB actively worked with barley. In essence the Barley Pool the CWB runs today IS a voluntary pool... as the CWB is often the second choice market for most barley growers.

Restricting deliveries into the pool is the first control.

Normally non-CWB commercial pools are done by production contract... and signed up to be included in the non-CWB pool before being planted.

[charliep]

The three papers that provide background for each of the questions in the barley plebescite are on line.

http://www.agr.gc.ca/cb/index_e.php?s1=ip&page=ip60908a

[chaffmeister]

sask:
Can't say whether the CWB has thought about it. But I have.

The only "problem" with a voluntary pool
(VP) is pricing. The CWB sees itself failing with a VP because it only sees a fixed price initial and a PRO as the only market signal. If the initial/PRO is higher than the market, the CWB fears it will get too much barley; if its lower than the market, it won't get any.

You solve this with market responsive pricing - it would give the VP competitive prices and the participants in the pool would still get pooled prices.

The CWB has to get away from the idea that only fixed or flat prices will work.

[charliep]

Perhaps the answer to the original question is perhaps in the CWB press release on the "Market Signals" Paper.

Quotes from the CWB release.

The CWB sells 90 per cent of malting barley sales to China, our largest export market, directly to end-users on a delivered basis. This enables premiums to be obtained through timing of sales, the control of freight, and competition for the origination of the barley. The major Chinese buyers that the CWB sells to include COFCO, Tsingtao Beer Group, Beijing Yanjing Beer Group, Ningbo Malting Co., Guangzhou Malting Co. and China Resources. The CWB typically markets 400-600,000 tonnes annually to China; this volume is expected to grow in the next few years. CLP - WHY WOULDN'T THIS RELATIONSHIP CONTINUE IN AN OPEN MARKET? ONLY DIFFERENCE IS THE CWB WILL HAVE TO CHANGE HOW THEY DEAL WITH FARMERS TO HAVE ACCESS TO SUPPLIES.

The CWB has worked closely with exporters and maltsters to promote and sell Canadian malting barley to SABMiller. As a result, Canadian barley is now the preferred source for this large international brewer which is dominant in the markets of South Africa, Colombia, Peru and Ecuador and a very significant player in the USA, China and Chile. The cumulative demand of this major buyer for Canadian barley/malt is approximately 500,000 tonnes per year. CLP - SAME COMMENT ABOVE

The CWB works closely with domestic maltsters to assist in developing offshore markets to maximize malt sales and, therefore, value-added processing in western Canada. The CWB offers forward pricing at world levels for barley of similar quality so our processors can compete with the EU and Australia. The domestic maltsters will run their plants at near-capacity in 2006-07. This is the CWB’s largest malting barley market (at 1.1 million tonnes). TRUE. WHAT ARE THE CONTRACTS WORTH WHEN THE CWB FORWARD PRICES ON FARMERS BEHALF AND THERE ARE NO PHYSICAL FARMER DELIVERY COMMITMENT TO SUPPORT THEM. CWB WILL HAVE TO SUPPORT THEIR FORWARD PRICING PROGRAMS FOR CUSTOMERS WITH DIRECT FARMER CONTRACTING DURING THE GROWING SEASON.

[kamichel]

The CWB should have an advantage here. They know where the markets are, they have a reputation, past performance, pricing options, etc. In order to market our malt barley they need to use trucks, ellevators, container facilities, railways, ports, ships, another foriegn port, railway, trucks to the final buyer.
I don't buy the fact that because they have no capital in a certain sector that they cannot compete on the global scale.
What I would like to see is grain marketting companies prying grain out of my bins through cash prices. That is where the CWB is currently lacking.

[wmoebis]

I would rather see grain flowing out of my bins at a price that could make me a profit. Instead of being pryed out for cash.

We have seen grain marketers prying lentils out of bins at .o7 cents. peas at $3.50. Farmers are selling at these prices because they have obligations or need bin space.

I agree that the CWB could stay as a marketer but my question is. Will we still have a gaurenteed bottom price from all companies?

Who is going to see that the companies(including the CWB) doesn't just rip us off when we are under pressure?

If the grain companies are extracting soo much more from the market place, for malt barley, why aren't they passing that on to the pool accounts now. What will change this if we have an open market system? Nothing is stopping Cargil from selling to China for more and passing that back to us driving up the pool. What is going to change this? If the grain companies want to make say .10 cents a bushell do they care whether they sell for $2 or $4 a bushell?

[kamichel]

Does a 25 cent per bushel minimum guaranteed price for feed barley from the board pay your bills? The 2 dollar wheat?
Or the Dollar Malt? By december we usually get a payment which then becomes the guaranteed min price but still not a prifitable price. One can look at the Pros but they are not fixed prices. So often from the board I expect more and get less.
You have a good point. 1000 pound per acre canary seed at 9 cents a pound sucks also. The CWB cannot control an over supply situation either.
My theory is it is not in the grain companies best interests to screw us too badly. If they can make us an acceptable profit we will grow more bushels to make them more profit in the comodity that they handle.

[winwin]

Wmoebis is right to criticise lentils.Look,in only afew years we have become the world's dominant player.There are jobs all over the prairies.Many farms have made good cash.Its all wrong.Its out of control.It was better when we couldn't open our bins cause there was only a3bu per acre quota all year.Single desk for lentils and for 300000 i'm running it for you.Yeah baby

[Incognito]

Ifn you want 300K, yous haf to set up da Ad Agencie. WINWIN as a corporate name would work.

[charliep]

sawfly raised a good question in another thread a little ways back and I will bring forward.

The issue is the one of farmers who carry malt barley to the end of a crop year only to have it rejected/be forced to market as feed. The issue was around right of appeal and ability to find a new market.

Similar comments on the farmer side side for malt contracts - a little time in a microwave to reduce germination and then walk on the contract. Some discussion about the penalties?

What is the CWB's role in selection and contracting today? If one of the parties in the contract waffles/doesn't meet their commitments (could be farmer, grain company or maltster), what is the CWB's role? What will these contracts look like in an open market with a CWB alternative?

[hoppsing]

voluntary pools are very tenuous. In an open market, pooling may not be feasible. If there was a pool, it may be only for a fixed tonnage of grain that is signed up at harvest.