What is CWB Acquisition Price?

[chas]

Adamsmith; Listen to what Ianben says about your theory of marketing and listen to any American Farmer about the freemarket lot the Cargil's and the ADM's have for them. You trust that, I would like to trust a farmer elected board of directors of a marketing agency
that would market and price my grain and oilseeds. Lets market it in the best interest of our industry. If that takes an open domestic market or export licenses so be it. But lets not kill the goose who can lay the golden egg without attempting to clean the nest.
When I first wrote on this site I was not concerned about anyone part of our marketing system the whole dam system stinks world wide. All the freedom fighters here can do is pick away at and blame the wheat board. Farmers problems are world wide, what works here will not work in Europe and so the problem continues. As Ianben says cooperation is the key to a healther industry that our children might want to inherit.
We can look at the cost to doing everything for ever but if we done create margin between input and profit you can stick a fork in it. The only way to sustainablity now days is to get bigger and bigger or get yourself an off farm job.
I don't have the answer and neither do you but we won't find it either unless we go through this painful diccussion that is never ending. Chas
PS I hope I feel better tomorrow.

[TOM4CWB]

Chas,

On the US market and CWB effect,

I think the non-board barley market is another really good example of CWB price depreciation, and why we must have competition.

In fact the elevator co's have been bugging the CWB for years to allow a competitive export feed barley market.

The grain co's cannot get a major benefit from reducing elevation if export prices will not be allowed to be competitive with the domestic non-board market.

It appears that the CWB does not want to fix the export feed wheat and barley marketing problems.

CWB Advisory Members Lee Erickson and Larry McGuire can both testify about the CWB “fiduciary responsibility” to never short the Canadian feed wheat and barley market. The CWB will deny that this “fiduciary responsibility” even exists.

However the Senate hearings in 1998 clearly identified the issue and Mr. John Prentice emphasised this CWB obligation in no uncertain terms.

In the US Pacific North West(PNW), the US livestock producers have some of the highest feed costs on the planet.

Why?

The US system encourages an open free flow of all grains at premium prices, and encourages these grains to be exported out of PNW US.

However, not far across the border in Canada, we have some of the lowest prices on the planet.

Ah but you say the CWB emphatically ensures you that I am wrong.

The CWB points to US exports that come into Canada. Then the CWB says see, the price must be and has to be higher than in the USA. In a very few export sales that were subsidized, this was true, but this was the exception and not the rule.

My simple answer is the same as in 1996 when the CWB said these same things.

Issue me a no-cost export license, because if we do have the highest prices on the planet obviously I will not need to export my grain to get top value! By the way this is the same CWB export license that already is issued to the feed mills.

If the CWB were to facilitate an open free flow of feed barley and wheat into the export market, it is generally accepted that this would leave the domestic feed market at an unfair disadvantage.

It is then stated that Feed users would then have to compete against a government-backed monopoly. Can there be any clearer evidence that the CWB is not here to maximize wheat and barley farmer’s returns?

The objective of the Canadian government is “value adding.” What better way to promote supply managed, and red meat, livestock products than by locking in some of the lowest cost most available feed grain stocks on the face of this planet, by preventing arbitrage with international markets!

Why?

The CWB is afraid of allowing arbitrage because many of the “premium value” grains we produce would lose their production incentive if our lower quality products were more valuable.

Issue us the no cost export licenses, and we will find out who is shooting straight!

Will this cause US prices to drop?

Probably a little down in the US and a little up in Canada.

But then if we could get the railways to compete more, I think US growers would win more than they would lose!

This is very complex I know, but so is farming today isn't it?

[AdamSmith]

Hi Chas, It's good to be passionate about what you believe as long as, as many facts are incorperated into the equation as possible.

The only thing I trust about grain companies is that they're going to act in the best interests of grain companies. With that said I would hope they wouldn't operate any other way. Because if they put other interest ahead of there own they'll be out of business and of no value to anyone. As long as I understand that I can deal with them.

Would I close my eyes and let Cargill drive into my yard with semi trucks and drive away with my grain? Of course not but I don't see them as my enemy either. Yet to many farmers close their eyes and let the CWB do exactly that based on what I see as blind faith and unearned trust.

Correct me if I'm wrong but it sounds to me as if you think Cargill and ADM are the enemy. And that your more interested in seeing those companies eliminated from the scene than anything else?

You say you would like to trust a farmer elected CWB board of directors?
Does that mean because Canadians have elected Jean Chretien and Ralph Goodale. You trust them? Ralph Klein just won another sweeping mandate in Alberta, does he automaticlly recieve your trust?

Putting all your trust in people who have unlimited power to use and abuse your money and your property in my book is the most frightening thing of all.

You say we need to co-operate I have no problems with co-operation. Voluntary co-operation! But if I choose to go it alone that should be know ones business but mine.

You can say what you like about Cargill but the last time I looked no one was ever thrown in jail for not dealing with them.

I love farming, I love the independence that comes with farming. You take my independence away , I'm out of here and my children will never know the love of farming.

AdamSmith

[ianben]

Hi All
I must admit to seeing those green patches over in your country too.
I thought the CWB was a real asset to your marketing now I am not so sure.
I do envy your elevator system and CGC we do not have the equivalent of either in UK.

We have plenty of customers for our grain especially in the west where I live, more livestock here.

There are plenty of grain traders too.
Not much competition on price though. They are 21st century companies, they only compete on service and terms.

Most grain canola and peas too is bought ex farm we just load independant hauliers so we have no control over our grain after it leaves the yard.

Cargils have a canola crushing plant 10 mls from our yard, but we are not encouraged to deliver canola ourselves.
In fact we can often get £1/50p more from a different trader for delivery into Cargils but I think this has more to do with transport costs than anything else.

Canola is definatly the fairest comodity we market too.
We get bonuses for moisture and cleanliness if over spec. It is time the grain trade took this on board then the deductions the other way may not seem so unfair.

I agree with your last paragraph about independance too, but can we not co-operate and be independant.

If this web-site, or one like it where ever we live, gave us precise imformation on how much and for what price we should market our grain.
Why would we not take notice?
It would be totally voluntary and yes if your circumstances demanded could be completly ignored.
However if common-sence could show the logic in the advice.
How many of us would ignore it.

As I have said before we all take advice on fert. and chem.
How often do you ignore them?

I even think it would lead to more freedom. If we are trying to replace the 1000 tonnes of wheat we just sold just think of the different ways this could be done.
Maximum production of fewer acres
Same acres with LOWER imputs
Or any other combination you can imagine.
This really could be freedom to farm knowing the 1000tonne would leave a profit.
That should cheer you up Chas!!

Regards Ian

[chas]

Adamsmith, Tom4cwb,Ianben and anyone watching; Most farmers and politicans don't listen to complex issues very long and would soon not concern themselves with it. Lets put together a Marketing Solution for Canadian Agricultural Industry that would be better than what we have now and if the CWB fits into to this system somewhere.
Try to keep it simple and give the benifit it would create.

Most farmers in my area don't know the extent of the problem that is being created by the CWB or the dual marketers. Jim Chatenay at the meeting in Red Deer did not explain the benifits of dual marketing other than it was a freedom that we all should enjoy. You must remember that my neighborhood is 350 miles from the US border and we don't see every day how it might move our market. Freight is freight from here. We thought we had a marketing agency in the CWB but now all the farmers in the southern part of the prairies are saying their just a bunch of crooks. And Jim Chatenay doesn't help his cause by not having meeting in the rest of his area to explain the merits of the dual marketing idea. I have learn alot from this diccussion but lets try to unscamble it now into a clear benifitical solution. Chas

[ianben]

YES!! Chas
A good idea but I see a world solution as the way to compete with globalisation.
Are there no US farmers willing to give us their point of view??

When are you attending that farmcorp meeting chas?

Regards Ian

[TOM4CWB]

Ian,

I find it interesting that canola is the most responsive and fairest market you sell to.

Please notice that the CWB does not have the opportunity to mess this market up!

I beleive the more monopolies mess around with things, the more complications and problems we will have in marketing our products. The same goes with governement interventions through subsidies!

We need clear demand signals from those consuming our products, if we are to efficiently and effectively use our farm assets sustainably and profitably!

[ianben]

Hi Tom
I think the canola market being relativly new just learned a few leasons
from the grain market when they started up.
The grain markets must change to meet modern technolgy and improved comunications.
We have revlolutionised the way we grow.
Now it is time to change the way we market. The technolgy already exists to allow the requirements and requests of the end user to be sent direct to farmers.
We should find ways to make this happen and give our customers a better service and us a decent profit.

Regards Ian

[chas]

Your right boys lets tell the government to get out of agricultural business. If they want food security for their country they can buy it and store it like very body else does or buy futures on the market. I'am sick of protectionist rules to protect everything and everybodies farmers, lets leave it to the markets to sort it out. I do believe now that it would be a more realistic agricultural world. Some farmers will sink but alot more will float with a realistic market. Theres more sinking under the system we have now. Chas

Ianben I decided not to attend the Farmcorp meeting I'm convinced Tom4cwb and Adamsmith are right. As for gobalization all governments have to get out of the farming buisness and create their own security by buying on the open market and not off the backs of their farmers. Its the only logical answer. Chas

[ianben]

Hi Chas
Sorry to hear you changed your mind about that meeting.
I admit I am sceptical about the need for $100 contracts and the just wheat idea.
But the facts and goals are very close to what I believe is true.
We have to start somewhere with a solution. If there was a meeting like this somewhere near me I would attend.
They might be genuine people willing to listen to improved ideas. They may be able to justify the $100. I find I usually learn something at most meetings. I learnt there are no rats in Alberta on this site from you. On the TV last night they said there are NOW 5 rats for every person in the UK. Yuk!! Think how much they must be costing us!!!
I am sure you would know a con-man if you met him what could you loose by attending.
THERE IS A SOLUTION, but I don't know how to get it started.
I had hoped the CWB might be the catalist, it is amazing how green that grass can look from far away,but it is obvious now it does not have the trust of all your farmers.
WHO WOULD WE ALL TRUST???
An independant farmer controled local web-site with minimal cost???
Giving specific common-sense marketing information which left the final decision to the individual but showed obvious benifts of acceptance???

Has any-body a better idea or solution?

Regards Ian