Westons to benefit

[agstar77]

National Post suggests Westons to benefit from grain price increases by increasing their margins. Same old same old , everyone in the chain makes more but the primary producer gets squeezed.

[chaffmeister]

Let me get this right:

Grain prices go up, and Weston's (a bakery) margins improve.

Grain prices go up and farmers "get squeezed".

Is this CWB-economics 101? Or are you missing something in the story?

[charliep]

Perhaps agstar77 is admitting the CWB cannot do much to achieve premiums out of the domestic milling industry.

From a farmer standpoint, total payments will be up by about $24/tonne in 2006/07 versus 2005/06 (1CWRS 13.5). Converted to Canadian dollar futures have been up substantially more but much has been eaten up by weaker basis levels. 2007/08 outlook (to date) is for lower payments.

[agstar77]

Nothing missing , Increase in cost of inputs will allow retaillers to pad their margins, i.e. according to the National Post. What part don't you get?

[charliep]

Perhaps just a way of viewing - haven't seen the original article so am trusting your interpretation.

I would expect a company like Westons to increase prices to reflect higher costs. Having said that, there is lots of competition on bread shelves at local grocery stores to keep Weston bread prices in line with that of its competitiors.

If you think there is excess profit in milling and baking, I encourage you to invest up the supply chain.

[agstar77]

I agree there is a lot of competition in Baking industry and thats a good thing. There will be soon more competition in Barley production and that's a good thing too!

[chaffmeister]

The part I don't get is how higher grain prices is a bad thing for farmers.

[agstar77]

Higher prices are not the problem, getting a share of the increase is. C.O.P. increases are eating up most of the gains.

[AdamSmith]

chaff, I think this is where Agstar is coming from.

Difference from one year ago for my farm (estimated)

NB Barley cost up $30 per acre, revenue up $154 per acre.

Canola cost up $40/acre, revenue up $85/acre

NB Wheat costs up $33/acre, revenue up $85/acre

CWB #1 13.5 CWRS cost up $33/acre, revenue up $26/acre

CWB Malt Barley cost up $30/acre, revenue up $36/acre.

So if you only look through the eyes of the cwb, things do look grim.

[parsley]

agstar, If you actually understood what you sometimes type, you would be embarassed.

Parsley

[agstar77]

You must have been using too much of that organic fertilizer you produce, time to cut back.

[parsley]

I should have fertilized the comment a bit more for you, so's you'd understand it, cause it 747'd...gone right over your head.


Parsley

[agstar77]

You just did!

[gregpet]

And it still went over his/her head