CWB Dumping theory

[TOM4CWB]

Charlie;

Did you hear about the CWB dumping of high quality wheat?

I understand the theory works like this...

Say the CWB has 12mmt of high quality CWRS wheat.

The CWB knows that only 5mmt of this wheat is really needed, not easily substituted, so to "extract" a premium on this 5mmt, the CWB dumps out the other 7mmt into lower priced quantity markets at below F.M.V.

The theory then goes that the CWB can withhold the 5mmt and drive up the price of this 5mmt, above the value that would have otherwise been recieved for the whole 12mmt if sold at F.M.V.

How could this possibly work?

What about timing issues?

Isn't new wheat production coming on monthly, and in filling the possible opportunity that might be gained?

Is the 2002 crop not proof, that this theory is totally flawed, yet the CWB contends this is one of the biggest CWB advantages... price discrimination (selling at low values)..., then single desk extraction of the highest possible prices?

Don't January 03 CWB sales prove this theory false?

[rodbradshaw]

Tom4cwb; I mentioned this theory once before in these threads but received no answer. Here goes it again.

If the CWB and the AWB have about 40% of the exportable wheat every year and it is kept out of world pricing mechanism by monopoly and single desk selling theory. Does this effect the world price in a negative way. To my way of thinking it does. Just the shear knowledge that 40% of the available wheat can be obtained away from the world pricing mechanism would weigh heavily on the world market price.

I hope I explained it clear enough for you to get what I'am thinking.

[TOM4CWB]

Kernel;

The monopoly is a two edged sword... can it cut with both edges as the CWB maintains?

Can high quality wheat be sold at a low price, and at a high price... at the same time..., without the high price buyer looking for an alternative supplier?

Will the low price buyer accept poorer quality wheat in the next order they purchase... especially if it is from Canada... without expecting and getting a lower price yet???

CWB theory and practice... is pushing "designated area" wheat growers towards growing as much high quality wheat as possible, while discounting lower quality wheats...

So that "designated area" wheat growers can only afford to grow high quality wheat, CWB policy and practice discounts lower quality classes... much lower than prevailing market conditions actually dictate.

This is a CWB self fulfilling acheivement... and since the CWB does discount the actual sales of these classes... the CWB figures and results match the CWB policy.

AS a seed grower... it is near impossible to ignore this bias.

Plant breeders say it, Charlie has said it to me, it is all too obvious... the CWB is definately pushing this with the "MONOPOLY".

Time and time again, the Winter Wheat, CPS Red and White, and CWES classes are all discounted far lower than what is reasonable, and can be attained from marketing these high value grains into the US marketing system. This is exactly why Creston B.C. wheat growers left the "designated area".

Now, environmentally and genetic sustainability enters the picture.

The CWB is forcing "designated area" wheat growers into a monoculture wheat class... which cannot and does not fulfill our environmental and genetic sustainability issues.

The CWB Monopoly is driving "designated area" into a monoculture wheat classed agriculture... is this healthy, and is this what the APF is actually aiming for? I THINK NOT!

AAFC had better pull the CWB's chain on this one...

The CWB monopoly is extracting an environmental and sustainability price that soon will cost "designated area" farmers, BIG TIME.