More on the CWB

[lesm]

Had coffee with an old non-farm buddy of mine this afternoon and he asked me what’s happening with the CWB. I replied that PM Harper and Michael Ignatieff have put the CWB issue on the back boiler for the time being. Even though there is great evidence that the CWB has cost the western Canadian farmer 1.3 billion in lost income, the governments and opposition seem to be oblivious to the facts. Since only 2% of our population rely on agriculture for a living it is far more politically correct for the powers in being to give us a subsidy for sustainability as opposed to letting us earn our livelihood from the market place. Our city cousins perceive us to be a hard working, lower class, poorer neighbour, that is struggling to make a living off our farms. Therefore, when the government announces a payment or subsidy to us farmers it is perceived as a gift from the rich to the poor to help us stay in business. As a result the governments in power are able to garner more votes for helping us poor, down trodden souls. It is more politically wise to pay and advertise the fact we are getting subsidised then let the free market rule. That was our consensus this afternoon, any thoughts?

[Fransisco]

The $1.3 billion is only on spring wheat. You throw everything else in and it's more like $2.2 billion.

As far as what our city cousins think. A neighbor of mine gets really ticked every time he hears the wheat board announce an increase in the initial payment or the final payment amounts on the radio and in the newspapers. Why? Because his city relitives, who also see and hear this, think that because it comes from the CWB it must be another government handout and they give him a hard time about it.

Talk about adding insult to injury. First they get you below average prices and then when they brag about it the city folks think it's a subsidy.

[Fransisco]

As of yesterday's close the boards fixed price contract backed off to Manitoba nets you $6.08 per bushel

http://www.cwb.ca/db/contracts/ppo/ppo_prices.nsf/fixed_price/fbpc-wheat-2009-mhrs-20090407.html

Across the border at Berthold North Dakota you can get $7.20 Canadian for new crop.

That's $1.12 in favour of the open market.

http://www.bertholdfarmers.com/

If a guy decided to lock in say 50% or a conservative 25 bushels on a 1000 acres that's $28,000 the board just cost you. Probably more, because I don't think it would take much prodding to get better than the posted price.

I remember doing these price checks last year but don't recall the spread being this wide on spring wheat. I think we've got extra basis going in here to try and repay the boards spec losses from the last few years.

[Fransisco]

And if you want another kick in the nads the guys in North Dakota get to grow varities that outyield ours. Extra bushels x an extra buck a bushel equals... well you get the picture.

[bucket]

The more interesting part of this puzzle is the fact that our freight rates are lower to Vancouver and the cwb asking price is higher or equal to the PNW price. If I do the math we should be quite a bit higher than the Americans. But I am just a dumb farmer duh huh huh!