Are we going into a depression?

[TOM4CWB]

Japan by many people's comment is now nearing a depression stage, their banks are nearly insolvent, and the Yen is in bad shape. This is the second largest economy in the World!

Why is this happening?

Energy is one of Japan's weakest points, and OPEC is squeezing really hard, hurting everyone on the planet!

When will the WTO outlaw Cartels?

If Japan crashes and burns, are we far behind?

How will people buy our Ag products if they are all in major deflation and in big trouble?

What chance is their for big rallys in this environment?

[ValueChainFX]

The future is always something to look at. Japan like many other countries have strength in their people. It is in the tough times that innovation is at the best. We all know that Canada has changes to make to meet the changing demands of the world market place.

[ianben]

Hi Tom
It looks very much like we are! Perhaps even more than when you posted this a few days ago,what with the fall in share prices around the world in spite of interest rate cuts.
I do not see OPEC as the rogue in this though. I see them as a stabilizing influence. I do not believe we should be useing oil at the present rate it is a finite resorce and should be treasured. Other sources of re-newable energy should be developed before we run out of oil and higher oil prices can only help make this happen.
This should be an OPERTUNITY for us farmers to find crops to fill this market.
The real villans in this are the guys who urged investing in the Dot.com shares. Shares with no assets no profits a bubble which was bound to burst fueled only by GREED.
This is what I dislike about all markets, grain included, they can be manipulated by unscruplous greedy people, not for ever but long enough to cause real harm to ordinary people like you and me.
This is why I believe we should try something new, and do the world a favour at the same time.
What do you think about this?

[TOM4CWB]

Ian,

I see the Opec situation a little different.

Currencies are interesting, as money supply is a man made artificial factor.

Essentially Japan's interest rate is at 0%, because to keep this economy afloat, there is a flow of currency needed as expences are higher than their income.

OPEC is sucking the life blood out of Japan, and also out of farmers around the world. Cartels cause destabilization, large price swings higher than they should be longer than what is reasonable for conditions, then energy prices will become lower than what is reasonable, all because of the Cartel. How does a farmer invest in an energy input when we know just around the corner prices will fall apart.

On .coms, I think that they are the communication future, although they were over priced, they will provide new efficiencies that are productive just like Agriville! Speculators help set up this site too!!

It is good that we are able to communicate like this isn't it?

[ValueChainFX]

We in Canada and especially in Alberta are in a perfect position to take advantage of many types of alternative resources. Calgary has a couple of companies that are dealing with fuel cells, it has been said that there are systems that run so well that one day we will be able to use our own equipment (cars, tractors etc.) to supply power back to the grid and actually get paid for this supply! Hm interesting eh!

As far as the .com companies are concerned they are just another part of the new economy and I believe that they are an important educational and communication tool that will eventually be a key to business improvement, especially in the agri-business.

[TOM4CWB]

Has anyone heard for sure about ADM in Lloyd?

What is happening there with a rumored shut down of the canola crushing plant?

[ianben]

Hi Tom
I am not knocking the dotcoms I think some of them have a great future. Just the guys who kept promoting them as sure investments.
I love the way we can comunicate too.

OPEC must be an advantage, if you are an oil producer, at least the price of oil has kept up with the rest the worlds prices unlike grain.

If grain was worth a sensible price I could perhaps agree with you, but when a tonne of wheat will buy so little today. I think it is time to join together and start something similar.

At least they have some advice on how much to produce if there is a recession.

Where are we going find this imformation?
Will we just do as normal, try to produce more for less, and drive prices even lower.
More heartbreak, more bankruptcies, less family farms.

There must be a better way!!!!

Regards Ian

[chas]

Tom4cwb: ADM is just a maintance shut down but don't be surprised if they make sound like something else. Farmers need to learn some of these marketing tactics for better prices.

[TOM4CWB]

On ADM Lloyd,

We heard today at the Saftey Net Co-alition Mtg from the Canola guys that ADM is shut down for four months.

Electricity, poor crush margins were the two main reasons given.

We suspect that maintenance is a big reason, like you say Chas many reasons, some unstated.

[bbrindle]

Most of you have probably heard the story on ADM at Lloydminster by now, but just in case, this is from http://just-food.com/

CANADA: ADM suspends canola crush at Alberta plant
23 Mar 2001 Source: Reuters By Kanina Holmes

WINNIPEG, March 22 (Reuters) - Archer Daniels Midland Co. , one of the top world processors of oilseeds, said on Thursday it would indefinitely suspend crushing and refining operations at its Lloydminster, Alberta, canola plant on April 1.

"It's the result of unfavorable operating margins," said Larry Cunningham, senior vice president of corporate affairs at Archer Daniels Midland (ADM).

"Those operating margins are unfavorable in part because of high energy costs and in part because of an oversupply of vegetable oil on the world market and slumping prices for the protein products we get when we crush on canola," Cunningham told Reuters from the company's Decatur, Illinois headquarters.

While Cunningham declined to provide details of the Alberta plant's daily crush or storage capacity, he did say that there were no plans to lay off employees in Canada.

The company operates another crushing facility in Windsor, Ontario and has 368 commodity processing plants worldwide.

In a news release on Thursday, ADM cited an "extraordinary" increase in energy costs in the western Canadian province as one of the factors contributing to the halt in production.

Alberta was the first province in Canada to deregulate its power sector, but the initiative has not been without pain for the government of Premier Ralph Klein, or many industrial electricity consumers faced with record high prices before the backdrop of a crippling energy crisis jolting California.

The average Alberta Power Pool spot price is nearly triple the levels of a year ago.

Analysts have blamed the sharp increase on such factors as extremely tight generating capacity within Alberta, surging natural gas prices across the continent as well as political uncertainty.

But Cunningham said the problems facing the ADM plant were not confined to energy costs and were in fact industry wide.

Over the last nine months, Cunningham said that ADM has temporarily or permanently shut down six soybean and cottonseed crushing plants in the United States. He added that some other companies, including Bunge and Cargill, have also recently announced plans to close crushing facilities in the U.S.

World oilseed prices have been depressed by record soybean supplies and worries about demand amid slowing industrial economies and concerns about foot-and-mouth disease slowing livestock feed demand.

"The industry is under severe pressure. I think we will be for the rest of the year," said Rick Watson, the vice president of oilseed processing with CanAmera Foods, the world's largest canola seed processor.

"We're selling canola oil in a competitive market against soybean oil into the United States and the prices are so weak we just have no opportunity for a margin in the North American marketplace," Watson told Reuters by phone from the company's office in Oakville, Ontario. CanAmera has six crushing plants in Canada, including one in Alberta.

The other major source of pressure is China who crushers say has been buying canola seed at unprecedented levels.

Crushers feel the pinch from the Asian competition because it drives canola seed prices higher and transfers the oil processing industry away from North America.

"With the high demand for seed, what that really means is they're deciding to crush a lot of oil themselves," said Jamie Dolynchuk, an assistant vice president with Winnipeg-based grain and food processing giant, Cargill Foods.

North American processors are also licking their wounds because China remains largely closed as a market for their finished oil products. "

[TOM4CWB]

I think the message in Brenda's article on China should make the CWB think for a few minutes.

The normal flow of trade and commerce should mean that China pays the same for grain as Canadians.

This is a must for Western Canadian Farmers to receive a fair price for their grain.

While the Chinese demand is in the market place, we get better prices for next fall, and this stabilizes the market.

The CWB's idea of price discrimination only hurts Western Canadian Farmers!

I can only imagine that a CWB PRO on Canola would be about $5.22/bu (Crop Insurance numbers for Alberta for next year) or $230/t or $50/t below what I just locked in a majority of my crop in at.

Can you imagine what August 1, 2001 markets would be like if the CWB initial was announced at $160/t?

Wouldn't that in itself be enough to cause a depression in Western Canada?