Flexpro Decision

[charliep]

Deadline for the Flexpro is July 29?

What are your thoughts and actions around this program? Will you be using it?

My two bits.

Hate production contracts that only lock in volume and leave the pricing question totally open. You have futures/currency pricing completely open, no basis and no knowledge of grade spreads. The latter could be a big issue is crop quality is poor and the CWB/federal set initial payments at spreads that don't reflect the market.

The plus for using for a small portion of expected production is that it can be used as a tool for the end of the crop year without having the cost of rolling contracts forward. You can go out to a July basis by the way on an fpc.

Perhaps the other factor is the adjustment factor starting August 1. As a reminder (hopefully I have right), the adjustment factor is negative in a rising price market (existing sales in the pool are below expected remaining sales during the year) and positive in a falling price market (existing pool sales add a premium to overall pool returns).

[checking]

No, I will not be using the program, or any of their other maze of programs. I'll be waiting to see the northern hemisphere results of actual production which will determine whether I'll store again. I do, I sincerely do marvel at individuals, in a good way, who can consistently understand what Portage and Main is inventing. Personally, I'm prepared to cut them a $0.06/bushel cheque, and pay them their wages to stay home, since this really is about loss of jobs for Winnipeg. God help us, please!

[Muskeg4dirt]

I likewise will continue to look for any and all opportunities to market my grain elswhere. eg: Feed wheat in our area is quoted for nov/dec at $190/t.
Fixed price #1cps. net$150....Hello???? Gee, makes one wonder why so many guys are pushing canola rotations. Get the CWB outa my way puleeeeeaaaase. Why is the only trasparent price these guys can come up with so pathetic?

[Hopperbin]

Sign up to a production contract without a basis or any knowledge of how they will come up with the basis calculation? Sounds like the farmers that sign up should automatically get enrollment in a marketing class. I am not going to worry about figuring out the CWB programs anymore. Fishing and camping much better.

[charliep]

When you mention course/consulting, I note the following from this week's bulletin.

Quote:

CWB program service representatives are now available in all three Prairie provinces to handle farmers' questions about Producer Payment Options (PPOs). These PPO experts are available to help online or over the phone, or they can arrange to meet with individuals or groups. More information is posted at www.cwb.ca/ppo. End quote.

I would encourage all to use this service (you are paying for it by the way) and ask the tough questions.

Won't go through the numbers but slides 32 to 37 of the producer survey have some interesting results to share about the PPO programs.

Most farmers are somewhat familiar with PPO products.

The above is after a year of a reported $90 mln loss on the 2007/08 wheat FPC/DPC program and a $10 to $20 /tonne widening of basis in both the 2008/09 and 2009/10 crop years.

[charliep]

I realize no one cares (or perhaps those that do care know and those that don't know don't care) but here are the best/worst basis levels for the past 3 crop years on the December offering (CWRS).

2006/07 best 23 over worst 8 over.

2007/08 (year of the $90 mln loss) best $5 over worst 10 under.

2008/09 best 4 under worst 30 under.

2009/10 to date best 13 under worst 28 under.

Flexpro claims not to have a basis but there is one whether you are aware or not.