CWB supporters please help me out with something

[Jagfarms]

In a multiple seller environment, sellers are
motivated to buy grain as cheaply as possible.
Competition will be a good thing for them. When
you’re buying a product you want as many
sellers as possible, so you can shop around for the
best value among competing sellers.
Today, buyers can’t play sellers off against each
other. With the CWB if a miller wants to purchase
No. 1 13.5 CWRS today there’s only one place to call
– the CWB. In an open market they’d contact grain
companies A, B and C, specify the grain they’re
looking for, and then compare the offers and select
the lowest price.

Currently grain companies are in the business of
receiving, grading, storing and handling
wheat and barley in the most efficient way possible.
They make all their money on these two
crops through these activities. In an open market
they suddenly have another profit opportunity
available to them. They can buy your grain at a low
price, sell it at a higher price and pocket the
difference. There’s nothing unethical about doing
this -- it’s just good business.
The job of any grain company is not to ensure
farmer profitability, but to ensure its own
profitability. They have shareholders that expect a
return on their investment.
The CWB’s only shareholders are western Canadian
farmers. Therefore the CWB returns all
income, less operating expenses, to farmers every
year. That means when a sales opportunity at a
higher rate does occur, you get the benefit of it.


In an open market single desk selling premiums are
gone, as is farmer control of a portion
of the industry. End users have several sources to
choose from for the same product and
grain companies can make money on buying low
and selling high and pocketing the
difference. Farmers, on the other hand, become
captive sellers to a handful of companies
that are intent on extracting every dollar they can
from the grain marketing system.

Look how some of the big grain companies are
tendering out rail cars at a loss quite often trying to
get more market share and squeeze out the little
guy. With out the CWB there would be more of this
going on until most of the little guys would be
squeezed out and there would be only one or 2 big
guys left. It would not be good for the small
independent grain terminals and producer car
loading facilities. It will be hard for them to
compete with the big guys. It would be bad for the
small towns and small business. The CWB
currently plays a MAJOR role in grain logistics
and other aspects of the grain marketing system.
Working with other parties such as the railways they
attempt to ensure cost effectiveness and service. It
would be a logistic nightmare with out the CWB.

[Fransisco]

The reason we compare our prices to the US is not because we think we can sell all of our grain there. It is because it is the nearest <b>open market</b> that we can compare ourselves with.

There is no reason to believe that we couldn't achieve the same returns if we were also operating in an open market. And if you look at how we're doing in canola there is reason to believe we could get even better returns than the Yank's.

[Fransisco]

There has never been any evidence of "single desk" premiums.

And in an open market there will be both multiple buyers and sellers all competing against each. That is what disciplines the marketplace. Right now there is only one buyer the wheat board and no one disciplines it. You take the lousy terms and the lousy price or you leave it, no shopping around is allowed.

BTW- if you think the only place millers can buy spring wheat from in the world is the CWB you're seriously fooling yourself. It only has 14% of the world trade, there are plenty of other places to get it from and more often than not they get paid more for it than the board does.

The theory of the single desk does not match up with the reality of farmer returns.

[Fransisco]

As to transportation, when one looks at the Quorum data for 05/06 one finds that it cost $20-30 a tonne more to move wheat and durum than it did to move canola. And when you look at it over a number of years the difference keeps getting greater. How exactly is this ensuring cost effectiveness?

One also finds, when looking at the Quorum numbers, that CWB grains tend to spend the longest amount of time being stored in primary elevators. I think most people would agree that the longer grain sits in an elevator tying up space the costlier it's going to be.

[chaffmeister]

I think I’ve addressed this stuff about a dozen times before here on Agriville. And reading Jag’s recent postings makes me wonder why it just doesn’t stick. It confirms in my mind there’s more to this CWB debate that straight objective logic. There’s a religious subjectivity, or blind faith, to the approach of CWB supporters like Jag. Absolute faith in the unknown – unwavering in the face of facts and objective logic that decry the value of their icon of socialistic power. There’s nothing any of us can present that will sway them for they will not allow their faith to be rocked.

What’s utterly amazing to me are people like you, Jag. It seems you’re a successful business man, and you’ve done it without the support of the CWB. You’re smart enough to build your own trucking business along side of your farm and special crop marketing. But - and sorry to be blunt - your concept of how the grain handling and transportation system (GHTS) works is juvenile. It’s based on an absolute absorption of the CWB doctrine, fraught with flawed economic and business theory, and combined with a nearly total absence of understanding of how the system works.

You’ve been fed a line and it sounded so good you’re now blind to anything else. What you write in your posts is not anything you know as true – it is what someone else has told you. And you accept it as fact. Yet, when countered by actual facts, you reject them out of hand.

Why do you believe the CWB rhetoric?

Why do you disregard objective logic?


Sincerely and respectfully,
Chaff

[vvalk]

Still no answer to my original question about how 99% of farms could survive if all our crops were handled like board crops. OH ya last Jan/Feb there was $13 durum contracts with act of God contracts. Who wouldn't have signed them up? Instead will sell 60% for $8. Have to sell canola for cashflow no matter what the price and build storage at $2/bus to store nexts years crops since I will still have 40% of my durum and 20% of my wheat. Not sure how board supporters can logically defend that?

[chaffmeister]

Logically defend it?

They can't.

[katoe]

Re;Informa Any report the AB. Govt commissionsto be done regarding the cwb will always be slanted in the same direction. They always are . Why else would they hire someone to do it?

[Jagfarms]

Valk

To answer your first question that you asked on
this topic I will give it a shot.

If all the crops we grew were under the CWB there
would be quite a few different crops involved. It
would depend on the supply and demand for each
crop how much they would accept. Some years
they would accept 100% of one crop and next year
they would not. There would always be a few
crops that they would accept 100% of. If they
would not accept 100% of the crop the supply and
demand would be low and it most likely would not
be a high price at that time. I will use canary seed
for an example. When the price of canary seed is 8
cents/lb I would not want to sell it at that price if I
did not have to. If I really needed some money to
pay some bills I might sell a minimum amount to
cover the bills or sell a crop that has higher price
and is more demand. A low price does not
always mean low demand for a product but a high
price usually means there is a high demand for that
product. When canary seed is 40 cents a pound
there is not usually not much of it around and the
price is high and the demand is high. If Canary
seed was in the CWB and the price was at 40 cents
a pound the CWB would more than likely accept all
of it that year. It would be the same for other
commodities if the price was high there would be
high demand for that commodities and they would
accept 100% of that commodities in those
conditions.

A few people mentioned they need money to pay
bills and they need to sell their product as soon as
they can to pay bills. In the open market if you can
afford to hang on to your product until the price is
high you can get a higher price for your product..
If you can not afford to hang on to your product
you have to sell it and take whatever they give you
at the time when you sell it. As you all know with
the CWB you haul it in when ever they call for it
and you get the average price over the year. You
have to wait a while to get your money but you get
the average price. If you do not want to wait and
you want more money up front you can sign up for
the Early Payment option.

With special crops lots of farmers will store Canary
seed, Lentils, Peas, ect waiting for a the price to
rise. They may not sell the product for a few years
waiting for the price to climb up to the price they
want. That is taking up bin space just like the CWB
crop that they did not accept 100%. If you can hang
on for a while if the price goes up $2/bu it will
pay for some new storage. If you hang onto it for
a while and the price does not move or your lentils
down grade in the bin it just makes you mad.

One thing I like about the CWB is when you haul in
the last of your grain in June and July you can watch
the pros and read up on the markets and sell your
crop into the current crop year or the next crop
year. Quite a few people I know did that in the
summer of 2007 carried quite a bit of Durum from
the 06-07 to the 07-08 crop year and did they do
OK. I think they are still smiling. The price for # 1
durum 11% prot in 06-07 was $5.92 in 07-08 it
was $13.80. That is $7.88 bu difference and lots
of farmers carried lots of Durum into the new crop
year making them selves a lot of $$$. If they
carried 50,000 into the new crop year that would
be $394,000 not to shabby. I bet those farmers are
in favour of the CWB.

It could work if all crops were marketed through
the CWB it is not impossible. I am not protesting
saying that all crops have to marketed through the
CWB I am just saying it could work. I am happy
they way things are now. Market our Durum, HRS
and Barley through the CWB and our special crops
on our own. Like I mentioned in previous posts
some farmers only grow CWB crops and do very
well at it so if all crops were marketed through the
CWB there would be lots of farmers that could
survive we would not all go broke.

You said the banks would not lend you any money
if this was the case, there is lots of farmers that
only grow CWB crops and they seem to borrow
money from the bank unless they get it out of their
mattress or have a dog that poops money. If they
do I have to find me one of those dogs. The CWB
is talking about paying farmers who store their
grain for a longer period of time. Not sure if it is in
place yet but I do not think you get paid for grain
that is not accepted. Lets keep our CWB and make
it better. How can we improve what we got and
make it the best it can be.

JAG

[Fransisco]

<blockquote>Re;Informa Any report the AB. Govt commissions to be done regarding the cwb will always be slanted in the same direction. They always are . Why else would they hire someone to do it?</blockquote>

Because they are looking for an unbiased third party to make the assessment. BTW- Unlike the CWB sponsored reports everything in the informa one can be double checked and verified by anyone.

And like I said before Informa's reputation as being a solid source for market information and research is far too important to it for it to be bought off.

http://www.informaecon.com/

I'll take a study I can verify myself anyday over a whole bunch where I'm told to " just trust us, nudge, nudge, wink, wink"