CWB supporters please help me out with something

[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"

[chaffmeister]

Jag:

You said "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."

<b>But if the CWB was doing it for you, they might sell it at 8 cents/lb even against your interests.</b>

You said: "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."

<b>Sorry, you can’t do that with the CWB controlling everything. They would be telling you what to deliver regardless of your cash needs. </b>

You said: "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."

<b>That was a no-brainer. The old PRO was $221 and the new crop PRO was $275 at the same time (June 07). You were faced with a choice: Sell everything the CWB would take at $221 or wait a few weeks and sell it for $275 – not a guaranteed $275 mind you but a $54 premium is still very attractive. I think anyone who didn’t do this was asleep or just didn’t understand. Oh yeah – the non-CWB markets do this kind of pricing all the time.

But doesn’t it make you wonder – if the 07-08 crop year was already showing such great promise, why was the CWB so aggressively selling everything it could at the end of 06-07. (They were offering GDCs at the time because their year-end sales were so strong and needed to get the deliveries).

Jag – you still haven’t answered my question about why you accept the CW rhetoric and reject logic.</b>

[Fransisco]

Jag, Charlie asked this question in another thread. Can you answer it?

<blockquote>Just curious if you know how the CWB prices wheat to customers. I am going to suggest that most CWB sales are futures adjusted with basis to achieve a cash price. The wheat basis is not consistent over time (i.e. the simple adjustment you suggest) but rather varies to reflect a lot of different market factors. The difference between the open market and the CWB (at least for grains that are backed by futures markets) and the CWB is that the process is relatively open in the former and invisible/hidden in the pooling system in the case of the CWB. Strangely, the CWB farmer client is the most ignorant of CWB pricing as I suspect most of grain companies have a pretty idea of basis levels being used - particularly if they competing for business as an accredited exporter - there no secrets in the grain business.

Perhaps you can explain the basis levels used in the fixed price contracts. Where do they come from? Are they a market signal? Why aren't CWB FPC basis levels consistent? </blockquote>

[Jagfarms]

Chaff

If the price of canary seed was 8 and you had to market it through the cwb you would have the choice if u wanted to contract it in the a b or c series contract you would not have to contract it if you did not want to. If you did contract it you would end up with the average price that would be more than 8 cents.

With selling durum in july 07 into the new crop year. If durum would have been in the open market at that time the price then was around $7 bu at that time. Farmers would have to sell it to make room for the new crop as it was an early harvest that year. They would have sold it for the $7 price when they got over $13 plus selling it through the cwb. You get the whole next crop year to make gains on the price. A lot can change in one crop year.

[chaffmeister]

JAG:

You say “If…you had to market it through the cwb you would have the choice if u wanted to contract it in the a b or c series contract you would not have to contract it if you did not want to.”

Are you serious? With the CWB, you have a choice to sell it or not!? “You would not have to contract it if you did not want to.” That’s it? So to you, it doesn’t matter if the CWB price is lousy – your solution is just don’t sell. What you’re suggesting is responding to price which is next to impossible with the CWB system since there is no effective price discovery.


How can you say with such certainty “If you did contract it you would end up with the average price that would be more than 8 cents” in a hypothetical argument? Blind faith in the CWB is the only way.


Also – on durum marketing:

You argue for the CWB by saying that if there had been an “open market” in July 07, “Farmers would have to sell it (old crop durum) to make room for the new crop as it was an early harvest that year.”

Such narrow thinking. The guys that sold their 2006 durum in the 2007 crop year with the CWB system, would’ve been forced to store it. Why would he be forced to move it in an open market? Why is it better to be forced to store it than having the flexibility to store, sell spot or sell deferred? Let’s assume the spot price was $7/bu. What would’ve the price for deferred delivery be – hypothetically?

What about the potential to store it (as you would have to under the CWB system) and sell it later for $20/bu or more? What about the potential to sell it (spot or deferred, it doesn’t matter) and buy futures to stay in the market? (I know – there’s no durum futures market. But that’s because of the CWB. Without the CWB, either ICE or MGEX will launch one.)

In support of the CWB, you say “You get the whole next crop year to make gains on the price. A lot can change in one crop year.” Absolutely. But in the CWB system you can’t maximize on that. Have you noticed that the 08-09 durum PRO has dropped $3.02/bu from a high of $12.68/bu. And the CWB’s already making signals that it’ll likely go lower. Using US prices as a guide, you could have locked in over $11/bu last fall – probably more for deferred delivery into winter/spring. But not with the CWB.

You’re still arguing with weak CWB rhetoric as your argument’s only support.

Where’s the objective logic?

[Choice2U]

Sawfly...Is it all that impressive that durum gets a constant premium to it's benchmark CWRS (another CWB crop) if CWRS is dropping in acres because of poorer returns. If my IQ is average but I am in a room full of dummies...I look impressive.