Barley Growers: Cargill and CWB are Welfare Bums

[parsley]

All the choice farmers will take comfort in the fact that they are finally taking back their wallets from these two indulgent money-sucking dependents still living in the farm graineries.

Cargill. representing the mother of all multinationals, has been making the easiest cash they can grab from the mother of all government institutions, the CWB.

Cargill and the CWB need to to be weaned.

You read the Roberta Rampton article on another thread where the message is: "give maltsters time to fill or unwind existing contracts"

Well, well, well.

FARMER'S ADVICE: Cut farmers an attractive cheque and you won't have any problem getting loads of barley

And then Robert Meijer, spokesman for Prairie Malt Ltd gets into a little blackmail type talk:

"We can push (the date) back, or the wheat board and the government, I suspect, will be held fully accountable for the liability this is going to create in terms of costs," Meijer said.

Well, well, well.

FARMER'S ADVICE: If farmers do to Prairie malt what cable subscribers did to Rogers, you may find you don't have ANY barley!

Farmers have spoken, Mr Meijer. Change has been coming for a long time, so if you are unable to work within that environment,resign and Cargill should get someone who can.

The only reason libility would be in the millions of dollars is because the maltsters have contracts for CHEAP CWB barley while the market reflects HIGHER-priced barley!

Cargill needs grain and farmers need markets. Farmers work better under co-operation, and not a threat of force, and court.Hasn't Cargill learned a thing? Farmers are in no mood keep buying Cargill barley treats.

A little warning for Cargill:
There are other markets and partners for farmers besides Cargill, including export-partner opportunities, now available via the regulation change.

Cargill had better start lining up some alternate farmers other than Western farmers, if they want to continue these tactics.

In the meantime, single-deskers, your best friends are the multinationals, wanting to keep their cheap barley, but then the CWB always knew that, because both Cargill and the CWB have been living off captive cheap grain from Western farmers for years.

Parsley

[Fransisco]

In the bizarre world of western Canada grain politics its just one kooky twist after another.

A few days ago the board released its market outlook claiming that all of the malt buyers had backed away because they were waiting for lower prices in the dual market environment. Now we see that the Cargill's of the world want those previous contracts honoured. Why would that be?

You would think they'd be glad to get out of these super high priced contracts the board was able to wring out of them with all the market power of the single desk. But no that's not the case. Is it maybe because it was such a sweetheart deal for the multi-nationals? The same ones that the BOD has been telling us over and over again that they are protecting us poor helpless innocent farmers from. Obviously it was.

And isn't it interesting how the board of directors now shifts gears on the image front from being a 'farmer' organization back to being a 'government' one (which it was all along).

So who's responsibility really is it for signing open ended one sided contracts in the first place? One would think it would be the BOD charged with running the whole Popsicle stand.

[Fransisco]

Chaffmeisters comments from a previous thread.

<blockquote>So the CWB has made sales to Prairie Malt - I hear as much as $100 per tonne below market. In the event that the single desk were to remain until Aug 08, what would the CWB do to ensure that Prairie Malt gets its cheap barley? The answer is nothing.

The CWB sets prices to the maltsters. It has absolutely nothing to do with the origination of the barley. That's why the maltsters are in the predicament they're in right now.

Feed barley price in Calgary is 160.80 to 175.00 (according to the AGC); Red Deer about the same.

CWB 2row designated barley - initial in Calgary at 139.00, PRO at $152.00 (my own calculations) FWIW - European 2 Row is trading at about 197 Euros = about $300 CAD FOB Mosel.

How do the maltsers attract the barley they bought from the CWB using these prices? The answer is they don't.

Whether the single desk is in place or not, the maltsters are not going to get any help from the CWB in attracting barley from farmers. Even with the single desk in place, Prairie Malt (Cargill) is snookered. The only way they will get malt barley delivered to them with these spreads is to either pay up (to farmers directly) or get the CWB to (raise the PRO). Either way, because of the ridiculous way the CWB markets malt barley without any risk management, there's going to be a sea of red ink. Cargill just wants it to be the CWB's.

At least in an open market, the CWB would be forced to compete to attract the barley. </blockquote>

[parsley]

Do you suppose the corporate grain world has forgotten that they actually buy the grain from FARMERS, or do they believe it is a virtual resource?

Perhaps Robert Meijer needs a few busloads of farmers on his lawn some morning to wake him up, and yank him out of his cozy Wheat Board bed and show him what farmers look like, so he knows we are real, and not virtual.

Parsley

[AdamSmith]

Yeah, this makes me want to deal with Prairie Malt.

UH NOT.

Good strategy Cargill, piss off the farmers who grow 85%-90% of the barley.

LO$ER$

[Burbert]

I like Cargill, they are trendsetters. They like farmers, they like subsidies, they like meetings, they like to sell stuff, they like the open market, they like the closed, market, they like truckers, they like dockage, they like, phoney scales, they like poor grade grain, they like the cwb, they liked shrinkage, they like profit, they like corporate structure, they like high thru put elevators, they like beef, they like confusion,they like the AB Gov't, they like a funny slime green color????? Guess they don't like organic stuff though,eh pars!

[parsley]

Do you suppose Prairie Malt would be whining on the Government's doorstep all last week if the contracts Robert Meijer had signed with the CWB were paying farmers $5.00 per bushel?

Right.

Maybe we need some "recommendations" handed out to farmers at spring meetings, listing companies who are most 'willing to do business' and those who prefer ONLY buying from the Board.

The CWB can continue with their malt pool, and meanwhile, Cargill, when they come up from under the Board's cozy covers to gasp for air, can sign another cheap "like borscht" contract with the Board.

Parsley

[charliep]

Just a note not to shoot the messager. The maltsters have signed contracts based on pricing they have done with the CWB. The CWB signed these contracts without any supply commitment from farmers or risk management strategy. At the end of the day, the CWB is ultimately responsible for ensuring these contracts are filled.

The important thing to me is how we transition out of the single desk for malt barley and into an open market. It will need some level of cooperation by all members of the supply chain (including farmers filling existing malt contracts and the CWB chasing those who don't).

Any thoughts on what an effective transition process might entail?

[parsley]

Burbert,

Cargill is able to get cheap grain because the Government is a player(the CWB) and is not acting as a regulator.

Farmers now CAN and WILL bypass Cargill, and unless Cargill ponies up with extra cash for farmers, they will be bypassed. And they are squealing.

The ONLY thing allowing Cargill to buy a swack of cheap grain is a monopoly CWB.

Parsley

[parsley]

1.First of all, the grain multinationals going to have to change their attitude. Change is here. Get over it.

2.What would the maltsters do if there were 4 consecutive crop failures? Sue God? Are they bereft of risk management options?

3.The Board of Directors with the malting barley responsibilitieswho allowed these contracts to be signed in view of the fact that choice marketing was imminently upon us, should resign, and new directors work with the Multis in this transitory phase.

4. New Director and new Multis management must look at the new plan that the Board was instructed to deveolp

5. Rahr, for example, has put some openess on the table. If Cargill cannot, they don't deserve a hearing.

6.The CWB should have done some polling to see how many farmers will be using the single desk and seek to get some committment from these single desk farmers.

7. Committments towards Cargill's contracts from the pooling accounts is the issue. NOT farmer held grain.

Parsley

[AdamSmith]

Charlie said, "The important thing to me is how we transition out of the single desk for malt barley and into an open market."

Charlie I assume you also want this transition to be successful in achieving the stated goal. Here is my plan, I'm sure 90% of the people will not like the plan but history shows it is the most successful way of adapting quickly.

It's called "Six months of Chaos"

The stupid and the lazy will be weeded out and the smart and resourceful will survive.

That is what the open market is about, we don't need to wet nurse these crying babies for one second more, if they haven't figured out how to function in the open market by now, they have no future in the barley business anyway.

Cargill reminds me of a four year old still breast feeding. Out running and playing with the big kids until he gets a little hungry then runs back to mommy, lifts her shirt up for a little lunch, then runs back and plays with the big kids again. Yuck!

[parsley]

CARGILL NOW HAS 2 CHOICES as today's Press Release from the WBGA shows:

FIRST CHOICE FOR CARGILL:

"The proposed amendments to the Regulations would continue to extend Part III (marketing) to barley. This would allow the CWB to continue to operate barley pools for those farmers who want to continue to sell their barley through the CWB. The Government would continue to guarantee the CWB's borrowings and initial payments.


SECOND CHOICE FOR CARGILL:

Part IV (licensing) would no longer be extended to barley under the proposed amendments to the Regulations. This would remove barley and barley products produced in Canada from the CWB's single desk powers, which would enable barley producers to sell their barley directly to any domestic or foreign buyer, including to the CWB."



“We have seen uptake of the proposed changes already by leading Canadian grain companies such as Agricore United, Saskatchewan Wheat Pool, Pioneer Grain and Louis Dreyfus. Their marketing personnel are already working on customers for the new crop year. Add to that, barley pricing contracts being developed by the Winnipeg Commodity Exchange, producers can see and access markets beyond the current domestic market" comments Tom Hewson, WBGA Vice President."


"Some of Canada's leading malting companies also have welcomed the proposed changes. They already have direct producer deliveries, now finally they can contract directly with barley farmers."

"This will ensure the top quality and quantity barley they need and the price transparency and price security farmers require. "These changes have been coming for a long time, our industries have been aware of it as well."

WBGA was part of the Market Signals in the Barley Sector (industry, farm group, provincial and federal government round table) paper released last fall. In that paper industries and farmers realized more direct cooperation between the two would lead to a stronger more viable Canadian Malt industry and more return to the farm gate" concludes Nielsen.



The members of the WBGA commend Minister Strahl and our government for moving forward into choice marketing for barley. Western Canadian farmers have long awaited the changes and the added value and growth it will promote."


Maybe Cargill needs some new management.

Parsley

[chaffmeister]

Parsley, Adam Smith et al: let’s not get truculent here.

What Cargill is doing is exactly what it should under the circumstances. It’s trying to protect its bottom line. It has made some sales to brewers at malt prices set by the CWB – and it has covered those sales from the CWB. And now the CWB is making noises that it won’t stand behind the contracts because of a little problem – it might have to compete for the grain and, oh yeah, the prices are ridiculously low. (If the CWB had high priced sales on the books, do you really think it would have threatened to walk away from them?)

The real culprit here is the CWB. Making noises that it won’t honour those contracts, the CWB is sending a signal to the likes of Cargill as well as the government and all you pro-choice farmers.

Parsley – I suspect that Cargill is looking at this situation – entering a commercial contract in good faith only to find the deal has been changed on them – in the same way you look at the Buy-Back with the CWB on organic sales. Upon entry it looks ok, but when the dust has settled, it costs you thousands more than you first thought. Neither way is any way to run a business.

Adam Smith – if you had bought fertilizer at $600/tonne but the supplier threatened to pull out of the deal before it was delivered because the market was now $1000 – how would you react?

In previous threads many ideas and concerns about contracting in the barley market were presented. Everyone seemed to be in agreement that you have to pin down as many details as you possibly can – try to consider any eventuality – avoid surprises (read the small print). All good ideas. And Cargill would agree with them all. In this situation, they are simply saying to the CWB, “we have a deal – stick to it”. If it was the other way around, Cargill certainly would without question.

[parsley]

Cargill has known for a long time that choice was coming.

The Board knew for a long time what was going to happen, and probably signed contracts that they should not have signed.

Cargill should be aware that the CWB itself signed the Contracts,(without any grain contracts from farmers) NOT cropduster and NOT AdamSmith who both own farmer-held grain not offered to the Board, and not in Trade and Commerce, but still contained in Agriculture.

Cargill has a contract breach with whom at this point?

Not with farmers, not with the Goverment, maybe with the CWB, but is their a breech yet?

Trying to blackmail on the front pages of the newspapers will do exactly what they probably what they will not like....a backlash from farmers.

And chaffmeister, these two...SWP and Cargill have publically allied themselves with the Board, and AGAINST choice farmers....so they'd better be prepared to sleep with them.

This is how it reads:

CARGILL vs CHOICE FARMERS
SWP vs CHOICE FARMERS

Parsley

[TOM4CWB]

Chaff;

You said:

"Adam Smith – if you had bought fertilizer at $600/tonne but the supplier threatened to pull out of the deal before it was delivered because the market was now $1000 – how would you react?"

1.)Lets to a wee bit of analisis here... The conditions leading up to the contractor selling the $600/t contract... were $1000/t.

2.) 15 years of legal and moral outrage over the contractor confiscating the producers product being sold by the $600/t contract... to the point where some went to jail to object to the taking of the product below market value:

3.)Clear problems in upper management where the CEO is insulting and sueing CFO (the CDN GOV.).. to the point that everyone knews the CEO was toast... and financial budgets not approved by the CFO

4.)The consitution and Powers to confiscate the property of the producers for the Contractor was/is clearly up for review... and everyone who cares to know is aware if $600/t contracts are given out in a $1000/t market... they could not be expected to be valid.

Chaffmeister,


5.)That To sign these $600/t contracts with me as a customer... that I have known for some 10 years (the Chairman of the board basically was aware producers were "unhappy" & wanted marketing choice outside the contractor)& that this contract would likely cause the financial colapse of your organisation...

I would have to be INSANE to believe these were valid commercial contracts @ $600/t of repute and good will.

I would not expect to have this contract filled.