Does the CWB understand grain markets?

[parsley]

Poor old agstar can't answer, what can he say except mutter the dog needs to go outside before bedtime, and you can bet Vader won't come out from hiding under the bed (his favorite place to hide), so that leaves Burbert to defend the Board.

Seems about right.

Parsley

[craig]

I just finished reading the response to the Penner and Cooper papers by the CWB. It's so sad that because of the gag order the CWB is unable to properly respond during the plebisite.

[charliep]

Has the CWB ever released the paper/methodology used in the $116 mln claimed benefit over canola used in the task force response?

[chaffmeister]

Charlie:
The following is taken directly from the CWB Responses to Supplementary Questions Raided at the October 11, 2006 meeting with the special Task Force:


The CWB estimates that grain handling companies have charged almost 40 per cent more in basis than their actual handling costs <b>(footnote: CWB calculations based on CGC posted handling and cleaning tariffs and CWB observed canola basis numbers)</b> If the same handling companies had the ability to do the same for wheat, durum and barley, farmers' costs would increase by almost $8 per tonne or $145 million annually (based on a 5-year average of 18 million tonnes marketed through the CWB and handling costs of $19.34 per tonne). The CWB recognizes that rationing delivery through a contract call system rather than price can result in farmers carrying stocks for longer periods than might otherwise be the case. To calculate the magnitude of these carrying costs, it is assumed farmers store 50 per cent of their contracted tonnage 3 months longer than they otherwise would. Based on the 5-year average quantity marketed by the CWB and average farmgate returns, farmers' carrying costs are approximately $30 million annually. This assumes 8 per cent time value of money. Taking these carrying costs into account, the net benefit of the CWB's contract call approach is approximately $115 million annually.

http://www.cwb.ca/public/en/hot/task/

[charliep]

My assumption is there is more work and background behind the $115 mln. Otherwise just a number pulled out of the air. Would be nice to see more of this background work other that a footnote referring to an internal CWB document. As you have highlighted, the Quorum data would indicate something substantially different.