CPS and CWES, what is the CWB doing?

[TOM4CWB]

thalpenny and the CWB;

On CWRS you are in the normal payment %, about 80%, for this time of year.

However, on CWES and CPS you are at 68% and 66% respectively, why so low?

Below is the 5 year record on your performance.

Grain YR. (Dec. In.)(Dec.PRO) % 1CWRS13.5 01-02169.2 21081%

Grain YR. (Dec. In.)(T.Pymt.) %
1CWRS13.5 00-01166.75202.5882%
1CWRS13.5 99-00154.3192.4380%
1CWRS13.5 98-99166207.5380%
1CWRS13.5 97-98167211.6879%

Grain YR. (Dec. In.)(Dec.PRO)%
1CWES 01-0212618568%

Grain YR. (Dec. In.)(T.Pymt.) %
1CWES 00-01136169.5680%
1CWES 99-00132162.1781%
1CWES 98-99143182.8878%
1CWES 97-98151191.2379%

Grain YR. (Dec. In.)(Dec.PRO) %
1CPS Red 01-0212018366%

Grain YR. (Dec. In.)(T.Pymt.) %
1CPS Red 00-01125158.779%
1CPS Red 99-00122150.1681%
1CPS Red 98-99130162.0180%
1CPS Red 97-98137172.0580%

WHEN THE CWB INCREASED THE PRO ON BARLEY, THE INITIAL WAS INCREASED SHORTLY THEREAFTER.

WHY IS THE CWB REFUSING TO INCREASE INITIALS ON CPS AND CWES, ESPECIALLY WHEN INITIALS AFFECT THE PPO FIXED PRICE CONTRACTS?

IS THE CWB DECEIVING FARMERS ON THE CPS AND CWES PRO'S, TO GET MORE SUPPLY?

OR HAS THE CWB SIMPLY FORGOTTEN ABOUT CPS AND CWES PRODUCERS?

[TOM4CWB]

Sorry folks;

It is very difficult to determine what stats will look like after submission to the Topic site!

I hope you can figure out the tables when everything doesn't match just right, and the spaces are taken out.

For Agriville;

Could you set up the site so exactly what is entered is posted?

[charliep]

Just to highlight and agree with Tom4cwb concerns. The spreads on both initial payments and the PRO's/final payments have a major impact on the hedging effectiveness of the producer pricing options.

The CWB/western Canadian farmers have enough experience under their belts to evaluate them/make suggestions for change.

Have the producer pricing options been an effective hedging/marketing tool for your business?

What changes should be made to the program to have both the basis and the spreads between wheat proteins/grades/classes more effectively reflect the market?

How important is having price signals that accurately reflect the value of wheat classes based on customer needs and willingness to pay to satisfy them? Is losing some of these price signals through price pooling a major negative factor or something you can live with?

[TOM4CWB]

Charlie,

Critical mass, product substitution, AND LACK OF CLEAR LEADERSHIP are the CWB's big problems.

It is a shame that even with the CWB's monopoly a competitive Canadian hard red spring wheat that could be substituted for US Hard Red Winter wheat has not been developed, isn't it?

The CWB marketing non-CWRS into the US has gone from 74000t in 97-98 to 1000t in 00-01 according to the USITC Report page 2-8 table 2-10.

Further, we have gone from selling mostly #1CWRS 97-98 to selling 962,000t #2CWRS (72%)of US sales instead in 00-01.

Product Substitution is extremely sensitive in wheat marketing.

“PRODUCT SUBSTIUTION”… “Among the five [US] classes of wheat, HRS and HRW are the closest substitutes…responses indicated that traditional bread-flour millers tend to switch between these two hard wheats or to blend these two wheats frequently to achieve a desired blend…

footnote 20
USDA economic research tends to confirm that Hard Red Winter and Hard Red Spring wheats have high cross price elasticity.

Because of the high substitution between HRS and HRW wheats, a price rise for HRS generally results in a sharp decline in the quantity purchased of HRS…

With regard to the substitution of comparable Canadian and US wheat, the Commission found in 1994 that wheat of comparable classes from the United States and Canada tend to be perfect or near perfect substitutes…

responses for the current investigation also indicate close substitution for [US] domestic and Canadian wheat.”
[USITC Report page 2-10]

FURTHER;

“US Dark Northern Spring (DNS) is the US Hard Red Spring [HRS] wheat directly competitive with Canadian Western Red Spring (CWRS). US Hard Red Winter Wheat [HRW] is the dominant wheat traded in the world, and its price is widely viewed as the “world price” for wheat.”
[USITC Report page 2-3]

“There are few differences in the terms of sale of US verses Canadian Wheat…Generally, it was reported, Canadian contracts specify only protein and grade, the latter to be determined on the basis of Canadian grade standards. Grade No. 1 (#1) CWRS wheat generally commands a premium of $0.03 per bushel over #2 CWRS wheat which reportedly is the same price differential as reported for the equivalent US wheat.”

THE SPREADS BETWEEN #1CWRS AND #2 THAT THE CWB CHARGES US ARE 4x WHAT THE WORLD MARKET PAYS.

AND THE SPREADS BETWEEN HRS AND HRW ARE $20.00/T LESS THAN WHAT THE CWB HAS BEEN CHARGING CANADIAN FARMERS on CPS.

CWES IS A TOTAL DISASTER AS IT LOOKS LIKE THE CWB HAS TOTALLY LOST THE U.S. MARKET, AND DEPENDS ON DISCOUNT MARKETING THIS HIGH QUALITY PRODUCT.

CHARLIE, I DON'T KNOW IF THE CWB HAS THE SKILL,KNOWLEDGE, or LEADERSHIP TO MARKET ANYTHING BUT HIGH QUALITY CWRS AT PROFITABLE PRICES.

IS IT TIME TO CUT OUR LOSSES ON CWES AND CPS AND ONLY PLAN ON GROWING CWRS?

[TOM4CWB]

Charlie,

The 180 page USITC report is a really amazing document...

I see the ITC was tricked on points like CPR being gov. owned...

I think anyone who really wants to examine what the CWB does to wheat trade is Canada would do well to take a day and really study this document!

Too bad the USITC took out so much really good info, for "national security purposes", it would have been priceless in its unedited form...

This report is at www.usitc.gov under Dec 21 Wheat Report, and since it is 180 pages takes close to an hour to download... but it is really revealing (some would say I am crazy)...