CWB cancels malt barley pool

[charliep]

jensend

Is the maltplus a good program for farmers? A
complaint I hear from the supply chain (not
farmers) is the complexity of the program and lag
times between negotiating a price with a brewer
(domestic or export), finding the price the CWB
wants, finding out the cashplus payment the CWB
will offer farmers and finally getting farmers to sign
up volumes.

On the good side of the ledger (not including
organic programs), the cashplus program is as
close to the CWB offering a price to farmers that
reflects an actual sale to customer. The risk
managment side of this program from a
CWB/pooling perspective (ultimately farmer) is low
cost to operate and relatively inexpensive.

[charliep]

last word should be simple and not inexpensive - already said
that. For those of you who attended the CWB presentation at
Farmtech, you got a taste of how complex (read expensive) the
CWB programs are both in terms of their process of using markets
to obtain an average price during the year and in running the
producer pricing options/contingency fund. Everyone (and I mean
everyone) will have to read this years annual report carefully.

[kamichel]

Another possible problem, do some farmers out there have a cash plus deal with their barley on hold? With the reduced price I doubt the barley will get picked up now. Lotta good some of them cash plus deals were.

[jensend]

charlie the maltplus concept is a step in the right direction if there is going to be a single desk agency marketing malt. better would be to have maltsters contracting directly with farmers and negotiating standards and price between the two biggest stakeholders in the negotiation. a compulsory marketing agency is a cost to the market and somebody has to pay. in the case of supply management the consumer is paying the real cost of the product and the producer is being compensated because he has a selling agent with the market power (mandated) to make it work. the cwb does not have enough market power to capture, on its own, set prices for canadian farmers. this is where the single desk falls apart. its price inefficiencies are paid for by grain growers. the way around this is supply management with no exports but what the heck would we do with all that technology? we've reached the point where we go to the open market, let the chips fall where they may and probably watch the emergence of more pricing and marketing co-ops. the cwb, in trying to become more, is probably becoming less and its time to start over if enough feel a marketing board is needed. from the comments here it's easy to see that some who want the wheat board gone will actually miss some of the options they have now in terms of contracting into pools. let the market run, such as it does, and either make or break grainfarmers because enough is enough. my biggest objection to the board is property rights based so let 'er go.

[charliep]

Fair enough. Just a highlight, the thread is about
barley and its very specific market needs operating
along side an open market versus wheat where CWB
control over human consumption (domestic and
export) drives the system. Out of an average 12
MMT crop, about 8 to 9 MMT is feed domestically,
another 500,000 used as seed and finally 200,000
tonnes used by the domestic brewing industry
(down from the 300,000 to 350,000 the CWB talks
about - a good indication we are drinking Canadian
beer produced from imported malt. That leaves 2
to 2.5 MMT the CWB handles (malt barley, malt
barley sold to domestic maltsters ultimately sold
exported as malt and occasionally feed barley.

[charliep]

The question about whether maltsters honor existing cash contracts is an interesting.
The original contract and price is with the CWB so they have the hammer to enforce.
My guess (could be wrong) is the original sale/price which in this case is benefit at a
higher price likely flows to the pooling system. Maybe someone can help but can a
farmer work with a neighbor/another farmer to fullfill the cashplus contract with the
benefit split based on their negotiations?

Should note have had feedback on malster/exporter production with minimum price
guarantees. A priority in future is clearer information around malt barley contract
specifications and reasons for rejection.

[Burbert]

WOW, Lets have a pool, let's not have a pool. It seems that whatever the CWB does or doesn't do, it's WRONG for the angriville guys/gals. The only thing that will make them happy, is a complete, total, meltdown of the system. Then their corporate buddies will bail them out, paying 1 penny per bushel for grain. WELL GUESS what? Their wishes are being answered, no pool and total market melt down seems to be in progress. But and its a big BUTT, apparently thats a good thing for farming......

[Hopperbin]

Burbert you don't get it. No one in industry would get away with terminating a pool early in my opinion. The CWB admits that extra sales are very limited.
So in that instance even if new sales work to 4 dollars net to producer they should be on the pool. 4 dollars is better than feed price and should be in the pool. For dollar value it still works in all farmers best interest to keep the sales in the pool. Terminating is irresponsible. Not that we need more laws sometimes but the CWB should be instructed to put the sales into the pool

[Hopperbin]

Interesting Charlie's statement about low domestic sales. First Europe takes export sales away from us now they are likely supplying our domestic market also.

[gregpet]

Isn't the CWB supposed to maximize returns for all farmers and not decide that the one who have sold into the pool will now capitalize on a higher price than the farmers that have not had an opportunity to participate?

[Hopperbin]

Exactly. Ian White has let me down immensely.

[Hopperbin]

The man needs to learn how to run a garbage truck so he can clean up after himself.

[Choice2U]

Burbert - Please do something out of character and answer one question. I'll try to keep your choices simple so you can just pick one. Is the CWB mandate to: 1. Maximize $ value per bushel? (eg. sell 10M bu x $8/bu = $80M which would require it to cut off a pool 1/2 way through the season without any advance notice leaving a very high carryout) 2. Sell all the grain that is grown at the best returns possible (eg. sell the full year's production of 20M bushels at $5/bu avg = $100M keeping an average carryout. All growers get the same price) 3. Maximize the total $ value of the crop (eg. sell only 18M bu (out of 20M production) x $6/bu = $108M which would push the carryout to a larger than average number)? Please pick one as they all have different implications to an individual farm. Herein is your answer as to why the CWB can never do anything right. WE DON'T KNOW ITS MANDATE. If it was to state its mandate or have a mission statement regarding the above then farmers could make some decisions as the season unfolds. The problem is that we have no way of knowing what the CWB plans to do from year to year so how do we protect our individual farms?

[charliep]

Going through email today after days away at Farmtech and see the CWB announced the initial payment "B Pool" feed barley at $103.50/tonne port or about $50/tonne ($1.10/bu). The PRO (Jan. 22) is $162/tonne or about $108/tonne local elevator ($2.35/bu).

With cashplus for malt barley, why isn't there a similar alternative feed barley? Better yet, have feed barley 100 % cash prices against sales under the guaranteed delivery contracts.