Myth Busting

[TOM4CWB]

Parsley et al;

When I saw the Agriweek article on Durum wht., Barley, and Oats... and the huge distortion the "single desk" has CWB grains in the "designated area"... it became clear we need a myth busting team to show where exactly the embeleshment and padding of the truth lies!

Chaffmeister has done a great job of exposing the deceptions.

Myth Busted:
The CWB "Single Desk" for Durum/barley extracts a premium; vs. Oat effect on US markets...

Truth:
The CWB "Single desk" has deflated Western Canadian durum and barley markets ... & is a cancer that needs to be removed!

Another Myth Busted:
Marketing Choice would mean that "designated area" grain growers will suddenly start hauling their barley across the U.S.border in droves, causing the U.S. to slam the border shut on Canadian Barley.


Truth:
The truth is that Marketing choices for barley will instead mean that "designated area" barley growers will now have a North American and world market for barley, right here, in western Canada.

$5-6.00/bu Malt barley won't need to come from Denmark or Montana to supply Canadian Malt plants... while "Designated Area" growers sell better quality Malt for $3.40/bu to the feed market because of the "single desk".

We will instead have a transparent rational market right here inside the "Designated Area" of western Canada.

The Incentive for "designated area" barley growers to haul barley into the US market, without very special intrinsic value, won't exist. Why shouldn't the Chinese be forced to pay a fair price for our Malt Barley?

World barley prices, adjusted for freight differences (our cost to port position is less than the U.S. cost), will make barley worth more here right in the "designated area".

CWB low ball sales of "designated area" off shore of malt barley just hurt all of us... and have a inelastic effect on Beer production in countries like China.

Just like for canola, flax, oats, and all other non-monopoly crops, prices on both sides of the Canada-US border will reflect world values.

Furthermore, US trade challenges have been primarily aimed at the CWB "single desk", and none have been for barley. The main reasons (the CWB "single desk")for US trade challenges will be removed when marketing choice is implemented.

The U.S. Needs our... oil... they also need our durum, barley, oats, canola meal, autoparts, lumber... and a 1001 other competitive, high quality, products Canada produces!

[BennyHin]

You said it Tommy.

Once the CWB is gone, Designated Area (DA) farmers will not have to physically ship their grain across the US line anymore to capture their "higher" prices, as the Malt and Durum prices will quickly be arbitraged to a single N. American price.

That is, US spot prices (basis levels) will go down as the "threat" of 4.00MMT of Durum, and 13.50MMT of W. Canadian Hard Red Spring wheat will pressure the US Elevator bids, more specifically force US PNW prices down. Without Orderly marketing, all these new tonnages available to the US NW market will force both Canadian and us spot bids down).

Now, how long do you think your redneck friends in Montana (The Golden Triangle) will put up with this?

Remember Tommy, Not a single Canadian truck needs to physically cross the US border without hammering their basis levels. All you need is the threat of free access to Canadian supply across the US line to pressure markets.

Byron Dorgan (N.D. US senator that once said the USA should re-aim some nuclear missles from Russia to Canada instead)
would flip his pasty $25 wig 15 times over as his ND farmers badger him to shut down "the Threat" of CDN grain flowing south, thereby increasing their basis levels once again.

Remember Tommy: Just the threat of CDN grain flowing south will arbitrage American basis levels down to W. Canadian levels. How do you think American farmers would appreciate this?

Plus, we have a rail freight advantage to the West Coast over them due to the regulated freight markets in Canada. So US farmers will be even more pissed off.

Perhaps, if we allow our rail freight costs to escalate to their's you'd be ok with this Tommy.



Friso: before you respond, canola and oats are not a good examples of cross US trade, as the Americans are net importers of these products unlike wheat and durum.

[wilagro]

You know, the worst part about Tom4CWB's rhetoric, is that he actually believes what he spouts...which is for the most part, a product of a wild imagination. Too bad...as he seems to be such a decent chap at heart. How did he ever get so far off on the wrong track?

[parsley]

Myth

Designated Area farmers should be paying NAFTA war costs.

Read the following from the CWB Act and then ask youreslf this question, "Is NAFTA a Canadian Government organization or is NAFTA a CWB organization?"


CWB ACT:
Section 33 Expenses in relation to international wheat marketing organizations

(4) Expenses incurred by the Corporation with respect to any international organization for the purposes of marketing wheat and the expenses of any director or officer of the Corporation of and incidental to attendance at meetings of that international organization or any of its committees are deemed to be expenses incurred in connection with the operations of the Corporation within the meaning of this section, but nothing in this subsection is to be construed as authorizing the payment by the Corporation of any contributions required to be paid by Canada to or in support of that international organization or any of its committees."


So what are those dingaling farmer-directors doing insisting on farmers paying this bill?

Parsley

[TOM4CWB]

Mr. Hin;

Myth:
"US spot prices (basis levels) will go down as the "threat" of 4.00MMT of Durum, and 13.50MMT of W. Canadian Hard Red Spring wheat will pressure the US Elevator bids, more specifically force US PNW prices down."

Myth Busted:
"Designated area" growers arbitrage world prices more profitably through our own more efficient handling systems... like oats does, like peas do, like lentils do... and Durum, barley and wheat could normally benefit from in a transparent open market.

The CWB will be much more motivated to pay more, and extract "higher" prices...for "designated area" growers... when the CWB needs to use disciplined selling at higher prices... to get our grain out of "designated area" graineries.

Pool sales that do not respect our farm families needs, and that the CWB have not received our permission to sell, depreciates the value of our grain.

The CWB operate a system that stifles innovation, has no fair risk reward principal included in the pool sales formula FOR "DESIGNATED AREA" GROWERS, and uses theories like the law of one price that cannot reasonably be applicable in many cases.

There are none so blind, as those who will not see... especially those who believe in getting something for nothing... from the CWB.

[wd9]

Myth, Wilagro posts something useful.

Mythbusted, see Wilagro's post above.

[chaffmeister]

"What a waste it is to lose one’s mind—or not to have a mind. How true that is."

— Dan Quayle

[parsley]

Anybody interested in adding $18M back into your pooling accounts for NAFTA costs?

Parsley

[wedino]

I can't agree with what you say Benny, the grain you speak of is already moving south. One thing I do see happening is the elevator handling charges will have to drop so they come more in line with US handling charges.

[wedino]

Benny, You're a farmer, right? Are you willing to invest some dollars in the cwb, your marketing agent, the one you love so much?