CWB Director Meeting

[AdamSmith]

Chas, I'm Adam, my grandpa was Alan, that must have been what confused you.
All kidding aside, I don't think anyone believes opening the border will solve all our problems but there are some very specific problems that it will solve. Like the lack of price arbitrage that exists as was mentioned in the winter wheat thread I started earlier today. The way I see opening the border is that I won't have to take my grain south because the world price will come to me.

Today Canola, Oats, Peas etc. can all be delivered and sold directly into the U.S. I know many farmers that deliver canola to the crusher at Velva ND and there is no fuss there are no protests from American farmers. It isn't the amount of wheat or even that there is wheat at all going into the U.S. that upsets American growers, it's how it is coming across and who is doing it. It's the CWB Chas, not the wheat itself!

The American farmer knows that if I as an individual sell my grain into their system I'm will sell at current market price, I have no incentive to sell for anything less, why would I sell for $3.90 bu. when they're offering $4.00?

But what the Americans don't know and are highly suspect of, is that the CWB will sell to a buyer at a discount in order to make the sale. The CWB can do this because they have no aquisition costs. The CWB also has the ability to sell large volumes into a single market and suppress the price. Even the biggest farmers can't manage thos types of volumes.

Back to the Canola, although I don't sell to Velva myself, I am always monitoring the price their offering and never sell to the local grain companies when thier prices are substantialy lower than Velva minus the cost of getting grain to Velva. When thos prices come into line the opportunity to sell into the local market is now attractive.

WHEAT would work the same way!

Within a fifty mile radius of my farm with the exception of a few, all the major grain companies have new terminals. Even with an open border my grain stays in Canada because that price would be here as well.

Surely you can understand that logic?

The American price is the world price and whether I sell wheat 20 miles south of the border or 20 miles north of the border will have zero, I repeat zero effect on price.

AdamSmith

[chas]

Adam: Sorry I insulted your grandpa. Just kidding. Now Adam theres some logic I had not heard before. I finally found someone who could actually explain what they thought was going on over the border crossings trouble. If it could be proven that the wheat border has been dumping into the USA and lowering our ability to get a world price. @#$*&^%#%^&%$ sorry I shouldn't of said that. You boys down along the border are not getting the message to us farmers who are in the perma frost. We cannot help with change in the board if we don't know the problems. We thought you were just crying because you couldn't cross the border for some small niche market. Thanks that gives me a whole different point of view on the CWB. The Americans have taken the CWB before the WTO eight times over dumping charges and lost but that doesn't mean they were not right.What would be the CWB's motive. Chas

[TOM4CWB]

Chas,

I can vouch for what AdamSmith is saying!

I shipped about 20,000bu legally in 98 and 99, and at times the pooling account paid me up to $17.00/t to do the shipping!

Now I do not do this because,
1. I have done a commercial volume of wheat through the buy-back, enough to prove my point that the CWB is guilty of subsidizing sales into the USA.

2. The fixed price contract has releived some of the pressure to get away from the risk of the pooling account. However, the CWB is pocketing big time money and depositing it into the contingency fund.(so much for doing sales without taking a margin!)

3. The freight in the US market is much higher than in Canada, to get to export position. We need to get our competitive position through our strengths, the low Canadian Dollar, low freight rates, and high quality products. We should be doing much better than we are now.

4. Our customers will take the grain off our hands, at any price the CWB will sell for, especially at discount prices. However they must ask a big question about signing up premium long term contracts with us:

A. Will the CWB be around in the long term? Instability kills premium marketing plans!

B. Are we a reliable supplier that can deliver the product at specific times, efficiently, and sustainably?

C. Are we supplying the products that create value for our customers, or are we selling grain that is convenient for us to grow and market?


All of these factors have really nothing in the long term that pushes my grain towards the US border, as long as the Canadian system of grading and grain handling is efficient and extracts value for our farms and our customers both.

Well, lets hope we can stabilize things and get out of intensive care, we are only hurting and kidding ourselves if we beleive the Canadian marketing system is healthy. We need an operation most urgently to help us get us healthy again!

[ianben]

Hi Adam and Tom
I must admit the job the CWB is doing for you guys, and me as well, if it is lowering world prices is terrible.
I agree the US price is the world price
so it will be their reaction to your reforms that will affect the price.
What do you guys think that will be????

Regards Ian.

[AdamSmith]

To Chas and Ian, I tries to answer your inquiries in the "WHAT IS CWB AQUISITION PRICE" thread.

AdamSmith

[TOM4CWB]

Brenda,

I went to the district 4 CWB meeting at Forestburg, and it was a sharp contrast to Red Deer.

I was surprised that the CWB did not go into examples and explain the new pricing options that are being offered, other than to hand out a little booklet for us to read ourselves.

There was a lot of Jim Chatenay bashing, and Ken Ritter was very careful to remain clear of this squable going on in District 2.

A Durum grower was upset with the failure to accept B series #2, but it appeared from Ken Ritters talk on weather in North Africa, that maybe the durum marketings might pick up. This was not directly stated however.

I asked why on soft white wheat that the mills are paying the $18/t premium directly to farmers and not paying it to the pooling account. No real answer.

I asked why API was buying 90%non-board when they are a mill and ethanol plant that is not exempt from CWB marketing. I was told if I didn't like what the CWB did to take them to Court. However this was not the point, I was merely trying to get the CWB to explain if the exemption policy can be justified by the CWB legislation. No answer, execpt the the CWB directors trust the legal department.

Ken Ritter asked about dropping the government backing on interm payments in turn for faster payments, and everyone was backing retention of the government backing, with the durum guy asking if the government could speed up the process if possible.

All in all it was a very tame affair, with little practical information, but the pro monopoly crowd really appreciated this chance to get together and pat each other on the back!

It was worth going to see what these people are really thinking, and for younger farmers the CWB is really causing cash flow problems. The older fellows seem reasonably happy, especially since Mr. Ritter won the election.

About 160 people attended, and were served with a very nice roast beef dinner.

[chas]

Tom4cwb: A big different in attitude in a distance of 100 miles eh! Ritter didn't mention the independent consultants report to come out on the single desk selling vs. open market I quess eh!
Nice supper I'm sorry I missed it Tom. Chas.

[TOM4CWB]

Chas,

You are right, it was strange Mr. Ritter didn't say anything about Mr. Gray.

However, he did mention that the Auditor General was doing a study on Australia and Ontario Single desk performance! This might bring forward some very interesting ideas for change at the CWB.

I wonder, is Mr. Gray's report happening to come out just a little while before the auditor general's report just an accident?

[parsley]

This is the CWB Supper Meeting report that I received... it was a verbal one, but I tried to write it as was told to me.

Grandview, Manitoba hosted the District # 9 CWB Supper meeting on Wednesday, March 21. Approximately 110 people attended.

After supper, CWB Director Bill Nicholson fielded questions from the producers. One producer asked a question about why durum wasn't moving. One lady asked why the administration costs were so high.

But the bulk of the hard hitting questions came from the organic producers and Nicholson didn't ...or perhaps couldn't....answer most of them.

One of the major points that organic farmers stressed was that the CWB had been disseminating false information. CWB's arl Geddes had provided a discussion paper to organic farmers in '96 and CWB's Adrian Measner had signed the 2000 Discussion paper to organic farmers and both papers contained false information. They defined exemption as meaning no-cost export licenses. They went on to state that no cost export licenses could not be issued unless there was a change in legislation. That was false.

These two papers formed the basis for producers and Directors and for policy. They have not been corrected. The organic producers were very persistent about getting this corrected , and Director Nicholson did not address the concerns. He seemed unable to deal with CWB's own facts.

He tried to argue that there are a lot of producers asking for CWB in organics. But the producers at the meeting showed that while the CWB's own statistics declared there are 800 wheat and barley producers, 569 of them had documented that they clearly want choice of marketing.

They also reminded the CWB's Nicholson that the Western Canadian Grain Marketing panel recommended that the CWB let organic go. They said that 70% on an Angus Reid Poll said the same. The Senate Committee Meetings.....75% said let organic go.

Essentially, the producers there used the CWB's own material against the CWB itself and Nicholson ended up not answering most of the questions. Producers were keenly interested and all stayed until 10:00 pm to hear what was being discussed.

Parsley

[TOM4CWB]

Parsley,

I went to District 1 at Ft. Saskatechewan, AB. and Art Macklin's meeting went much the same way.

On elevator closures, CWB by pushing the car allocation issue, is causing many older elevators to close as the grain co's are not willing to have the CWB dictate where cars are going, so they close all the elevators they cannot afford to operate efficiently.

Art did not agree of course.

Organic was a topic, and Art didn't understand it well.

Trade costs for the US challenge were singled out as the federal government's cost and not the CWB's.

The media indicating that CWB interm and final payments were gov. payments was brought up, and I indicated that with the NAFTA rulings that the initial payment was the CWB's actual purchase cost and that anything above this being paid to us as a profit of the federal gov. and CWB, it is little wonder US growers and the Media say it like they do.

Buy-backs came up of course, and the US saying the CWB is undercutting, was an issue.

I indicated that buy-backs that pay producers to ship to the US were causing undercutting.

Art said this was wrong.

The CWB Rep from Lethbridge went and got some buy-back figures and indicated that I was right, the PRO was $11/t above the buy-back yesterday which proved my point.

Feed Barley Pricing and Pooling was a big issue, and Art went on a long diatribe why the CWB could not shorten pooling periods that made no sense.

Lots of unrest underneath, but few were willing to say much, they left it to us vocal guys!

Hope Art realizes that the CWB is at a crossroads, shape up, or be shipped out.

[parsley]

A CWB Supper Meeting was held last night in Neudorf, Saskatchewan. Elected Director Michael Halyk hosted approximately 125 producers in his district # 7 for supper.

There were questions about durum marketing and were some really dissatisfied farmers with the durum contracts

Questions about the transportation issue.....particularly about the tendering. One producer asked about the transportation costs.

Administration costs were discussed too. Halyk explained that there were a number of people who retired from the CWB and these handshakes accounted for some of the extra administration costs.

The fellow who gave me an account of the goings on in Neudorf said their seemed to be lots of "quiet disenchantment" with the CWB, but that a lot of producers are really hesitent and "even frightened to speak". It's tough times on the farm.

A group of organic producers were there, and organic producer William Rees really pinned down Director Halyk. He accused the CWB of offerring false information to organic farmers for 8 years. Halyk said little Rees said that using the CWB's own figures, there are 800 organic wheat and barley growers; however, 569 of those producers, or over 70%, say they do not want the CWB marketing their grain. He also reminded Halyk of Professor Richard Gray's Report/1995 recommendation, "The removal of organic products from the jurisdiction of the CWB cannot take place until national minimum standards are in place." is past due because national standards are in place. The farmer who attended the meeting thought the CWB had to come up with something better because the organic farmers had some really damning facts and figures.

Rees asked if Halyk would personally support a recommendation that would urge the CWB to grant free export permits to organic producers. When Halyk responded that yes he would support that recommendation at the Board table, the audience of 125, composed of mostly conventional farmers and 4 organic farmers, burst into applause. The farmer-reporter was surprised because it indicated that conventional producers overwhelmingly supported the organic producers' request for no-cost export licenses..

Bill Cooper, a well-respected conventional producer t in Saskatchewan, said that he would be communicating Halyk's positive organic-response to the farm community. Some of the farmers were saying that the CWB will need to revisit the CWB's organic policy.

That's about all the report I got... as best as it was described to me. No fist fights, hangings or stabbings.

Parsley