New CWB Wheat Storage Program

[charliep]

Will note the CWB announcement on the wheat storage program.

http://www.cwb.ca/en/farmers/contracts/wsp/

Interesting program. Comments?

[TOM4CWB]

Charlie,

I will bite.... how much are they paying for storage?

$30/t?

[charliep]

Didn't say the program was perfect but a good starting point for something interesting.

Here is the CWB Q&A:

Quote "Media backgrounder
What is the Wheat Storage Program?
The new CWB Wheat Storage Program (WSP) is designed to protect premium agreements with customers by paying farmers a storage fee and premium to store their high-quality, high-protein No. 1 Canadian Western Red Spring (CWRS) wheat on-farm. Under the program, the CWB will pay farmers to reserve grain from a good harvest and deliver it to the CWB to offset the risk of a poor harvest the following year.

Who can participate?
To ensure that the CWB is able to call up the high-quality stocks quickly when needed, contract sign-up and delivery will be restricted to certain delivery points located in regions with access to No. 1 CWRS 15.0 per cent protein stocks that are capable of loading 50 or more cars and are located on main rail lines.

How much will the CWB pay farmers in premiums and storage payments?
The CWB will determine the premium offered to farmers based on the additional value that the grain is expected to be able to generate through enduring premium sales. The CWB will pay $1 per tonne per month to store the wheat in the program.

Why are farmers required to submit a grain sample under the program?
Farmers must submit a grain sample within seven days of contract commitments. Grade and protein verification will reduce the risk of the contracted grain not meeting the program specifications.

When will farmers be required to deliver grain under this program?
Farmers must deliver grain committed to the WSP within 30 days of delivery call. The CWB will call grain forward from the farm through grain companies, who will then contact the farmer to arrange for delivery."

[TOM4CWB]

Charlie,

Realistic Commercial cost being offered is at least $3/t/month... I wouldn't do it for a cent less. A 75% interest free advance is offered on top of this payment... for the grain being stored.

The CWB must be joking... do they think we are _________? !!!!

[BennyHin]

$30.00 per tonne Tom? Please provide your reasoning? At $30 per tonne carry, I would cayy my wheat until I was as old as you.

[TOM4CWB]

Mr. Hin;

Perhaps you don't understand how to make a profit then?

You should buy some wheat on WCE May 07 @ $159.50, and sell it @ 181.00 in July 08... if you think it is such a great deal!

How about buying some Nov. 07 Canola... at 385.40, and selling it in July of 08 at $413.50?

And you think holding #1CWRS 15px wheat... under contract to the CWB... that must be delivered to them... is a good deal @ $1/t/month!

Now before the CWB sold all the 07-08 malt barley... they should have had these type of contracts locked up with growers BEFORE they sold the grain to the Maltsters!

Who in their right mind would have signed one Benny?

This is the kind of DEAL... the CWB offers to maximise my returns...?

NOT. but for the pool... that great ocean of "Confiscated Wheat" ... Great Idea Benny!

Your so Vain...

I"ve got some ocean front property in Alberta! From the front porch you can see the pool

[cropduster]

Sooo could this be cheaper than storing it in Bae Comeau then railing it back to Van??????????Wonder if the quonset donkey thought of this while the tractor was running inside??????

[BennyHin]

TOMMY4CWB:

The $30/tonne cost of carry for Nov to Jul/08 canola is based on the near by cash value of canola. Wheat is not trading at $360 per tonne on the near by Minni futures, so why do you expect the same storage payment as canola?

So you know how to make money? Please tell us all how you made your money? Waas it from farming?????

[BennyHin]

Tommy4CWB: prove it to me that the CWB sold this much malt barley into the 2007 crop year at the prices you claim?

You should read your bible more often. Or perhaps you do read it, but just dont understand the underlying meaning of the text.

[kamichel]

What if the grain developes a warm spot, gets bugs in it. Will they pay you for rotating it? Is the farmer on the hook for spoilage? 1 dollar per ton barely covers the storage facility if at all. 1 dollar per ton will work for some farmers if the grain if paid for in full with the risk of spoilage put onto the CWB. Tom and most know that it is risky to store grain into the second year, I think it is risky.
I have a better idea, allow the producer to price his wheat at that future date for a certain price he is willing to price at. Like there is a sale at that date from producer to buyer. Like the fixed price contract would work. Why get into storage payments? The CWB is too complicated.

[gregpet]

Benny, can you prove the CWB did not sell at low prices? They always claim to extract a premium but they have not materialized into higher returns for producers.

[TOM4CWB]

Benny,

You said;

"So you know how to make money? Please tell us all how you made your money? Waas it from farming?????"



Rule #1) You won't going broke making a profit. So sell when you can make a profit, don't get greedy... "the hogs get slaughtered".

Rule #2) There is no subsitution for persistance and hard work... timing is key to being sucessful... as is caring for the community and those less fortunate than we are.

Rule #3)Good Will in a community cannot be bought... it is earned with honesty integrety, and a pure heart. These artributes keep a family healthy... and are key to a humble God Fearing Heritage that our children learnt by example... producing prosperity, good will, and hope for a great tomorrow.

Benny, if being honest farmers, working hard, caring for those who need help, and hoping for a prosperous and better tomorrow are something I should be ashamed of....

How many hours of community service should I give a week, more than 20?

Is there someone I have ripped off... that you know of, that we took advantage of & made our farm or my family wealthy?

If someone asks us for help, do we turn them away because we are to greedy & arrogant to help? We always try to help, in a manner that builds a stronger community and personal relationship.

I hope every deal I/We and our family have ever done... brought more prosperity to the folks we dealt with..., than what we got from the deal!

I believe this is the secret to prosperity..

OR
Was there something else were you getting at Benny?

I sure don't see this kind of sharing attitude in this CWB CWRS storage program. It is nowhere near the commercial cost of storage. Where is the risk premium?

[kamichel]

I see new crop fixed prices are up good over the current pro. So grain held over into the new crop year priced plus a little extra for storage is not all that bad. Just need good storage.

[kamichel]

Could also point out the poor protien payments this year. So 15 percent protien plus new crop fixed price , then Tom4 will get more than his 30 dollars per ton storage.

[TOM4CWB]

Kamicheal,

I see $10/t number floating around on the CWB web site... for folks without a FPC... and willing to go to next years pool anyway for tax/income spreading... it could work. Watch the CDN$... it could take it all away in a matter of weeks!