How much is fair mark up on crop inputs

[tower]

silverback, ownership, I can see two ways of considering ownership in this context. In the first, if I am selling something, say a piece of furniture, and unlike the Brick I need some money down and regular payments until it is paid off. I still own that piece of furniture for all intents and purposes until final payment.

In the second, if I as a member of the Canadian Wheat board, not the Board of Directors, sell to the board then so long as the board still possesses it I as a member still possess it. Perhaps it's one of these new ideas floating around about taking possession by being involved.

I don't know that conditions are enough alike between a farmer in PEI and one in PA that the same board would work. It is one of those things that over a few years perhaps a determined Board of Directors could work on.

[tower]

Parsley, If the board and the multinationals have to be in a constant state of negotiation over the acceptable rates charged the board for handling I'm hazarding a guess that both sides get the most out of each agreement. Plus I don't know that grain companies are getting too much for the work and effort they put into moving grain through their system.

I think it's a good subject for us as farmers to be checking in to. What do you say we lobby both sides to get justification of their respective positions placed before the grain farmers of the designated area.

[tower]

fransisco, in the same sense that a good debate is necessary to democracy, competition is good for an economy. That doesn't mean that competition is always good for the people within a sector of the economy. If it did there would be fourty-three shoe shops in every little town across the prairies and the'd all be selling $200 pairs of sneakers that the pay $50 dollars for.

It's not me thats talking about putting people in jail, it's you, perhaps you are perpetuating victimhood.

[chaffmeister]

TOWER: “Multinationals” is a term you use; I prefer to make a finer distinction. Please take note of this earlier post of mine:


chaffmeister posted Sep 14, 2007 0:05
________________________________________
In case TOM4CWB isn't reading this, I can answer that last one.

FACT: Real life data shows that the grain companies (not always multinationals by the way) make more handling CWB grains than they do on non-CWB grains, like canola. Source is the Federal Grain Monitor Report - available on line at http://www.quorumcorp.net/reports.html

- end of post

In these debates, it is very important to be clear about what you’re talking. Cargill and LDC are multinationals; JRI and Viterra are not. In fact, Cargill and LDC are the ONLY multinationals that are involved in handing grain in western Canada. There are 37 companies licensed as Primary Elevator Operators, of which I figure 15-18 are significant players – only 2 of them are “multinationals”.

http://www.grainscanada.gc.ca/Pubs/GrainElevators/invtables/06TABLE2.PDF (got to the last page)

TOWER, you keep making the same mistake as the CWB – comparing or equating the CWB to “multinationals”. They are in two different businesses: the CWB sells farmers’ grain. Grain companies handle CWB grain as agents of the CWB.

“Multinationals” trade grain globally (buy and sell and provide handling and logistics services) – they also process grain so many are customers of the CWB.
The CWB is not a “Multinational”, nor should it see itself in that roll.

TOWER, you said: “…when the grain trading takes place the buying low and selling high to consumers the multinationals can afford to take a loss in their shipping departments because their markup is so high when they sell it doesn't matter..”

Nope. Wrong again. The large “markups” you think happen – just don’t. These comments of yours tell volumes about your lack of understanding of how this market actually works.

Tower, you said: “As a broker, maybe you could provide us with information that would back that one up.”

First, I am not a broker. Never have been – pretty sure I never will be. Not sure what information I can muster for you beyond what I have already shown you. And I must admit that I am beginning to think that it really wouldn’t matter what I showed you – you’ll never be convinced.

Tower asked TOM4CWB: “you said that the multinationals can often make more money with the board in place,, is this compared to what they could and would do without the board in place? and how would you prove something like that.”

Grain handlers make more handling CWB grains than non-CWB grain like canola (this is a non-debatable fact as I’ve shown you over and over again).

“Multinationals” – those that either trade grain on the global stage or buy grain to be processed (or both) – make good use of the way the CWB sells grain (again, something I have explained here more than once.) When a large buyer of grain is “in the market”, the market generally knows about it and the market reacts by rallying. A large buyer can go to the CWB to buy, knowing full well that the market will not be aware of it because the CWB does nothing to manage price risk in the futures or cash markets. Savvy multinationals know enough to go the CWB first to buy as much as they can before they start going to the rest of the market. In other words, they know they can “pick off” the CWB.

By the way, you have not answered my previous questions so I will repeat them here:

With all due respect, could you please share what it is that you see that you think I don't.

Also, what is it in my responses or my "own evidence" that makes you feel I have missed something?

And what is it about my responses and data and facts that you find so unconvincing?

Why don't you think these costs are relevant?

Why? Why do you support the CWB and seem to turn a blind eye to the facts?

As I have said, convince me that the CWB is providing real value, and I'll argue that till the cows come home.

[tower]

thanks charliep, puts a different perspective on all the questions on here about why the boards initial payments are so low doesn't it. I presume that when the board applies for a price increase for us, that considerable thought has gone in to the benefits and costs of such a move and that they present those thoughts to the governing party at that point.

So anyone have any thoughts? is the board not making our case well enough or is there just too much fear on the governments part because of the taxpayers federation. Oh come to think of it that's where Harper came from isn't it.

[tower]

Tom4cwb, If government were to be run like a business it's first objective would be to make money, the more the better. Is that what you want?

From a different perspective I was referring to the penchant big business, and the Canadian government would be Big Business, has for ignoring ecological sustainability, and avoiding social responsibility. And we have people who encourage government to emulate them. pretty sad.

[parsley]

Oh tower, you are starting to tell jokes:

"It's not me thats talking about putting people in jail, it's you, perhaps you are perpetuating victimhood."


Remember the tax collector at the ocean when Ghandi came along, refusing to pay? And Ghandi and crew were jailed?

Bet that tax collector said Ghandi was "perpetuating victimhood" just like you do.

Same old line, huh? You must be a relative of that old tax collector.

You like-minded greedists must have a book with an identical page all of you read from, or maybe chant from, every week when you do your grain yoga.


Something for nothing, something for nothing, something for nothing.

Parsley

[parsley]

tower,

I was being facetious when I suggested that we lobby the CWB to improve their negotiating trends for the handling agreements with the companies.

Obviously,even you think they are not doing their job.

Farmers need to be able to bypass CWB incompetence.We need to do just as the muntis now do...bypass Board marketing and Board pooling.

Parsley

[TOM4CWB]

Tower,

What is it that creates "Prosperity"?

The best selling book this year, approx. 100 million copies this year... has the thoughts of the wisest person who ever lived... and this is his council:

"Lazy hands make a man poor,
but diligent hands bring wealth."

"The man of integrity walks securely,
but he who takes crooked paths will be found out."

"Ill-gotten treasures are of no value,
but righteousness delivers from death."

That CWB supporters think they are gaining anything...by:

a) Confiscation of property... they have no permission to take from the owners who grew that produce in the first place;

b) A False Ideal that more can be gained by having an institution (the CWB) dispose of this private property that has been confiscated... when there is no obligation (In the law used to confiscate) to even return the true cost of growing the produce to those who grew it;

c) That being Lazy, taking property in a dishonest manner using "Crooked Paths" (Chairman Ritter explained that perfectly with the "get alot more done with a gun and a smile than just a smile.") that spending this "Ill-gotten treasure" will gain you anything personally, is just plain foolhardy.

Many how have "Diligent hands" and the prosperity to prove that fact... have answered your questions.

But it is obvious we have a problem. The standards that actually create prospertity in the first place... had not been set out.

Perhaps, if you truly are interested in respecting others, working diligently for prosperity, these 3 tips Can help you understand. Please read the rest of the book, it would really help you to understand!

God Bless You!

[Ref. Proverbs 10:4,9,2]

[tower]

Tom4cwb, I would think, before throwing the bible into an argument, about being certain that the words aren't a two edged sword. Perhaps "When pride cometh, then cometh shame: but with the lowly is wisdom"

[tower]

chaffmeister, Let's start with the multinationals, ok, Cargil and louis Dreyfuss, are you saying that Archer Daniels Midland is not involved in the Canadian Market? Last I checked they were pretty involved. What do you think the I for international in JRI means? I think if they consider themselves to be multinational then we could take their word for it. Parrish and Heimbecker? Ok let's say that these corps themselves, and through the old pools handle 75% of western Canadian crop production, it wouldn't take many more mergers and the false option of choice in selling without the board, would be pretty much lost.

Perhaps you are mixed up about the role and responsibilities of the board and the multinationals, but I'm not.

A high percentage of the multinationals that make money off both ends of western Canadian crop production have been making record profits while farmers have been taking record losses.
Perhaps you think that is a coincidence, if so it would be one that could easily be corrected.

Which brings us to your job, I apologize if I used the term broker. You have said that you have traded "Lots" of grain, Does that make you a trader? Let us know what it is that you do for a living, and who you work for, that we might better judge the value of your comments.

I know, you have shown me that same quorum study repeatedly. And by it you imply that multinationals make more money handling cwb grains than they do handling non cwb grains. One of the things you didn't, wouldn't, or couldn't read from my last response to this repetition was that you have a viable argument. That is if you don't count the record profits being made by the multinationals when they buy and sell western Canadian crop production. My point I guess, is that grain producers have to look at that larger picture than you present in order to judge for themselves whether they want to lose the board.

I think that answers your other questions,,, again.

[charliep]

tower

A couple of interesting thoughts.

The Canadian National Millers (of which ADM is a major part) are firm supporters of the CWB. I assume is because it meets their business needs. When the customer side is firmly in support of the CWB and a large percentage of farmers want change, I take this as an indication of a problem - not a gauge of success.

See:

http://www.cwb.ca/public/en/hot/choice/millers/

Asked elsewhere but maybe you can help me understand why domestic wheat and barley value added processors are provided risk management alternatives for free while farmers are forced to pay/maintain a contingency fund.

A final thought is that grain (domestic and international) make money by maintaining margin on business. Margin is the difference between the price they buy grain from the farmer and sell grain to a customer further up the supply chain minus the cost of doing business (elevation, transportation, etc and even heavan forbid I would suggest, profit). For non board, a company will have positions offset by sales/purchases in cash market or hedged using futures. As chaffmeister and other have said, margin is as good if not better on CWB grains than non board (particularly considering they carry virtually no risk on these transactions). You seem to indicate grain companies make money by speculating but my experience tells me that grain companies are about as sucessfull at speculating as farmers - they generally loose money and the traders who this have short careers (fired). I wouold challenge you to demonstrate otherwise.

[Fransisco]

Tower said in response to the quorum report that shows companies make more money handling board grains than non-board grains, <blockquote>"That is if you don't count the record profits being made by the multinationals when they buy and sell western Canadian crop production."</blockquote>

I agree with Charlie, if you have proof of this tower, you need to put it on the table. Where is your evidence? Chaffmeister gave you his, he backed up his opinion with facts. <b>Can you do the same?</b>

By the way what is wrong with a company making a profit?

[parsley]

Maybe it would be a good idea if you checked the actual records that companies file, by law.

Then, you can get some idea of whether a company like, say, Weyburn Inland Terminal, handles mainly Board OR off Board grains, and if the kind of deal they have with their handling agreements if profitable.


sedar.com

read the restictions for divulging information.

Parsley

[charliep]

ADM represents about 40 to 45 % of domestic wheat milling capacity and about 20 % of domestic durum capacity.