Rayglen Malt Wanted

[TOM4CWB]

guess I'm still new to this site Vadar, and your train of thought. Tell me how and why the CWB needs capital assets? I deal in feed grains with a variety of brokers,(to me the CWB is no different) that have no storage. We have excess storage at the west coast now as it is. My question, why can't the CWB work for farmers, offer the prices needed to attact the product, honour 100% of any contract and reward the producer for keeping the malt barley in condition till its needed?
If your heart is set on capital assets, then why didn't you start aquiring or building years ago, with the interest earnings from the foreign debt on grain sales? And not demand a $1.5 billion cash handout by the Canadian tax payer??

[wedino]

Hey Vader, Re your statement: “We all get an average price for the year whether we sell through the CWB or not.”

It has been stated on this forum that the cwb has admitted to forward selling the '06 malt crop at a very low price in June or July '06. Obviously this is true, what other reason for the low malt pro? How many tonnes of malt barley was offered to the cwb in June & July? I didn't offer mine until the harvest was complete, & I'll bet this is true for most farms in western Canada. Please tell me, how can the cwb make forward sales before the grain is actually offered to it? My understanding of the act is that the cwb cannot offer grain for sale until that grain is actually offered to the cwb by the producer. One thing this farm would never do is forward price into a very low market. Would rather carry it & watch market develop.

[Vader]

erik,

how many brokers are there out there now? Do you really need one more? If you want the CWB to be a broker thats fine. That won't be the same CWB we have today. It won't be any different than a hundred other brokers. It won't add value to farmers. If it is there at all it will be to add profit to its own bottom line. It will have a limited ownership structure who may or may not be farmers. (probably not).

The CWB must be able to expand its business to remain strong. It must be allowed to market other grains and it must be allowed to own assets. There is not another major grain company on the planet that is not allowed to make capital investments.

The interest earnings on the foreign debt would have been a great way to start an equity base for the CWB if the legislation permitted that but for now it does not and the Harper conservatives are not likely to allow the CWB to do anything that might make it stronger or more flexible.

[kamichel]

Just adding to Weddino comment.
How many tons did farmers contract for new crop in 06 when prices were at the lowest. Close to 0
Now compare to how many tons are contracted already this year when prices are nearer to highs. Lots
Lesson to be learned is that farmer pricing ( the one who knows his expenses and what he needs to make a profit) does better in the market than the CWB.

[charliep]

Perhaps an even more interesting question is how much 2007 malt barley the CWB has contracted. My understanding is the CWB has told customers they will walk on the contracts in an open market setting. The contracts currently limited value(maltsters and exporters are responsible for selection - no farmer grain/no value to the contract).

[kamichel]

Vader these grain brokers that we use are very similar to the CWB in that they sourse grain for end users. Have very little capital investment. Get a share of the grain sold.
The differences is that I have a choice to use the broker or not. I give several brokers a list of grains that I have on hand and even acres of different grains planted. Why not, the worst that can happen is I tell them where to go with their prices.
Buyers like to use brokers because of the ability of the brokers to sourse grain as needed and organize trucking. So the broker fees don't neccessarily translate into less pay to the farmer.
I have had brokers put grain that is of less quality into a market where the quality if of less importance and my profit was maximized. I would even say that any brokers I have used with just a few employees work more closely
with me than the CWB with Sorry don't know how many employees, lots more.
And one other thing Vader your comment that the Harper government wont allow the CWB to be more flexible and stronger, I don't buy that one. The Harper government is saying they will support the CWB in a more open market, what part of that did you not hear. They say it all the time. The opposition is killing themselves in conspiracy, fear mongering, Guess you listen to them.

[kamichel]

Charlie I am not sure I understand your question. I have been dealing with an Agricor United elevator for the majority of the malt I have ever produced. one reason I like them is that I feel more secure when I deliver there that after they get done checking every load I unload there I have more security that I will not get rejected. They are good at it in my opinion and they are very capable of making malt sales overseas.

[charliep]

In talking with the domestic maltsters and brewers, the CWB has already began the process of contracting (including price) malt barley for 2007/08 with them. NO idea on volumes. Indications are the CWB has indicated they will not honor these contracts if the CWB looses single desk status. I am not sure whether the same process has occurred with the exporters.

Interesting in how everything is politics and spin. No one knows the plebliscite outcome or for that matter how the federal government will launch something different. The CWB is having conversations with their customer base which highlight some pretty dire consequences. The issue of how transition occurs is never talked about. I can't guess but I my guess an evolutionary transistion is much better than a revolutionary one. Hope that helps clarify.

[charliep]

If the CWB wants to grow and add value to western Canada - its value added sector and producers - then it must adapt and change into an entity where by it can. The Task Force set out the guide lines for such a process, you are going to loose your government garuntees, sooner or later, so change is enevitable. By adapting and restructuring you may be able to aquire assets if that is the wishes of the share holders, whom as the task force set out would be western Canadian farmers. Being totally free of the federal government it could finally be run as any Canadian corporation does - directors working on behalf of the corporation work with the CEO who has the sole responsibility to run the affairs of the corp.
My main point on assets Vadar is the fact that we are not the exporting nation we use to be. Your records at the CWB clearly show declining exports year after year. We need to add value to what ever we grow in some fashion here at home. By allowing freedom of choice to producers that will grow. THe CWB can continue to play a role in this, once change and restructuring has happen. Is it going to be the same CWB we know today? no, yet if it wants to be a true corporate entity then it must make the necesary changes to become one.
Malt barley is just the start, our industries here in the west need choice to survive that is a fact!!!

[TOM4CWB]

Vader,

The CWB, is not authorised to sell grain it has not been offered by section 32 of the CWB Act. I sure hope the single minded directors have their liability policy dusted off and ready to be claimed against!

No wonder the credit rating of the CWB was downgraded... by S&P... if they only knew the other half of it... what would it be?

[wedino]

What are you thinking Tom4? Class action by malt barley producers?

[TOM4CWB]

wedino,

If the CWB costs growers in the barley system, those responsible have an obligation to PAY the loss.

CWB management KNEW there was a "CHOICE" change comming in barley marketing... the CWB Directors/Managers who caused losses should pay.

Pre-selling the malt barley pool early not only hurt the barley growers who must sell through it... it looks from the outside like a Measner suicide "poison pill" move.

A strategic move CWB Managers implemented meant to stop CWB Minister Strahl from barley marketing reform? Early presales and contractual liability on CWB barley sales to stop Minister Strahl?

A Forensic Audit would be in order... to find out for sure.

[charliep]

Perhaps it may be the beginning of a new CWB. No reason the CWB couldn't convert these contracts on behalf of the overall pool account into cash contracts offered to specific farmers. The CWB could easily work with farmers and the maltsters to make this happen. I assume that these contracts are at favorable prices - $4/bu plus - so many farmers would be more than willing to participate.

[TOM4CWB]

Charlie,
If the sales levels are at high enough levels... on a spot sales base... it may work.

Hold good Malt barley to the next crop year, is this an option as well?

[kamichel]

We and the CWB must remember that even if the vote does favour the CWB monopoly, the Federal government may still create an open market for barley, with the CWB able to market barley from producers , that is what our federal government wants. They claim they will move swiftly so they must have some plans for this. The must move swiftly because the vote tally will not be known untill end of march. Prices must be given to producers before that date. Measner was fired because he would not co-operate. Would be sad to see the CWB not try.