CWB supporters please help me out with something

[Jagfarms]

Sell 100 percent of your grain at 6$ bu or 60 percent at 8$ and still have 40 percent of your grain left to sell. There is still the b and c series contract left as well. If you have cash flow problems u can get the cwb cash advance. Hard to type on this bb.

[Jagfarms]

Sell 100 percent of your grain at 6$ bu or 60 percent at 8$ and still have 40 percent of your grain left to sell. There is still the b and c series contract left as well. If you have cash flow problems u can get the cwb cash advance. Hard to type on this bb.

[bucket]

Jag
60% of $8 is 4.80. And where do you sell the 40% of the remaining crop? To the durum feed market at 4.50. This means you and the cwb averaged your crop to 4.65. Nice return on a crop the cwb in february of 2008 said would be worth 9 bucks. Meanwhile those dumb americans are delivering 13buck durum signed up in february 08.

Take the fact that you have 40% of your durum in the bin to the bank. He might ask - what is it worth? My answer is nothing - its technically unmarketable. The cwb still has its hands on it if they call 100% later. But lets say you sell it in the feed market - not much of a return. And if you decide to hold it to the next crop year - what is it worth. Nobody knows. But the storage to the cwb is free so they don't care.

You gotta start thinking differently about the cost to farmers the cwb forces on us.

[Fransisco]

Chaff asked "If the CWB has the legislative mandate to market your grain, does it also have the right to NOT sell it?"

I guessing that it does have the right not to sell your grain. I don't think they have ever sold 100% of the malt crop in western Canada so why should it be any different with wheat or durum?

This is one of the big risks in growing board crops. You will get lower than average prices and you may not be able to sell everything that you've grown.

Why do you think guys are pushing their rotations so hard, growing back to back canola, peas or whatever? They may take an agronomic hit by doing this but at least they can get their bins empty and get paid for their crop.

[stubblejumper]

bucket no wonder you don't understand the CWB you don't even understand basic math.

[chaffmeister]

Jag: Instead of selling 60% of your grain at $8, how about selling 80% of your grain at $8 ?

Or 100% at $7.80?

How do you know holding back 40% of the crop is going to push prices up 2 bucks?? Where does this math come from? Theory?

Maybe holding back 40% does nothing at all to prices because of competition. If all you’ve done is allow someone else fill the sale from Argentina, Australia or the US, you haven’t moved anyone along their demand curve, regardless of their price elasticity. (Translation: the price won’t go up.)

Maybe holding grain back actually drops the value of grain at home because you and everyone else will be looking to move grain – like bucket suggested.

Fact is you don’t know what the effect is and neither does anyone at the CWB.

Stop dreaming.

I know my last post was long and complicated so here’s the short version. The CWB can’t do what you give them credit for. They can't manipulate global prices and they can't price discriminate in a way that maximizes farmer returns. It sounds great in theory but absolutely, positively impossible to do in real life.

[bucket]

stubble

Yep checked it with the calculator 60% of 8 bucks is 4.80. That's four dollars and eighty cents. There is nowhere under the cwb that you can sell 100% of your durum and get 6 bucks. So you have to do weighted averages. I understand math very well and I understand cwb math as well.

The only way that you can 100% of your durum crop under the cwb is if (and I suspect you use this practice) you overcontract by the right amount. And since you have good connections with the board I suspect they told you they were going to be at a 60% call on the A series, so for every 100 tonnes of actual production you signed up 166.65 tonnes to cover off the 100 to deliver. No penalty. And your durum will recieve 8 bucks.

Its not rocket science. And my math is correct.

[Fransisco]

Finally, a single desker. Stubble can you please answer vvalk's question?

[bucket]

stubble

An 8 buck PRO promises you nothing. The only value in your grain you have sold to the cwb is the initial and maybe an interim.

You have to look at the real costs the cwb impose on western farmers - free storage, additional bins, lack of 100% cashflow on stored grain etc.

[Jagfarms]

Bucket
I know that 60 percent of 8 is 4.80 but nobody knows what the price difference would be if the cwb would sell 100 percent or 60 percent of our grain. I would have to think the price would be lower if they sold 100 percent vs 60 percent. If the price was high and they can makes sales they would sell 100 percent. I was just using $8 and $6 as an example.