CWB PRO for 2003-04

[TOM4CWB]

Charlie;

I am concerned that the CWB did not raise the last PRO...

A flat price of $210/t on July 31st says the CWB PRO should be at $215/t, not $195.

What is going on here?

Has the CWB sold 03 harvested wheat to the extent that it is holding down the PRO AGAIN this year?

[charliep]

No way of knowing what has gone on in the 2003/04 crop year.

More important to me is how farm managers interpret and use CWB pool return outlooks. Are they usefull? As a user of information in management decision making, does information help? Is it even relevant to you or are you happy just to get the average price for the year?

[charliep]

Perhaps tom4cwb I would not want to be to hard on the CWB for forward selling some (just as a good farm manager likely has some feed barley and canola pre-sold this spring). The question you have raised in the past how the CWB can forward sell something they don't own is relevant but that is another question.

Perhaps what is needed is a more transparent and open market plan on the part of the CWB. Maybe the only way the CWB to forward contract sales prior to July 31 is to make them use their producer pricing options/source from farmers who are willing to commit to a full price ahead of harvest. Just ideas.

[crusher]

I'm thankful for low PRO's, it forced me to do some fixed price and basis contracts. I like the target price option, but I'm not sure if they can be exercised while the market is open or only on the close. Does anyone know?

The PRO signal has really stunk over the last couple of years, and that has made it very hard for producers to budget for. I hope they start offering cash pricing SOON. I don't want a 90% settlement less basis risk plus a share of future payments - what kind of confusing bunk is that (even if it paid out big last year).

[TOM4CWB]

Charlie;

Now that the PRO determines the base for the EPO which is 90% of the PRO, it is critical to get the PRO right.

What would be MUCH better, would be to do as the OWPMB does, have a cash daily price, then a minimum price at 80-90% 0f the cash price.

I see the special loan program is at 80% of the PRO, not as I had thought, determined of the Initial.

This is a bad sign!

Now, with this new loan program, the CWB can lay all the risk of pool depreciation back on farmers laps.

EPO's will likely become useless, because this is not an election year. The PRO will remain low, because it is easy to get the pool to $195/t when the cash wheat is selling at $225/t. We must have an accurate indicator of at what level the CWB is selling our cash grain.

Further, do we have huge 02 carry in stocks to sell through before we get into sales of 03 grain?

CWB Pricing Transparency is needed, for accountability to become a reality.

Maximising our returns is a interesting concept... and goal, what plan have you Charlie and Lee, seen, what should give us farmers confidence this is acheivable by the CWB this 03-04 crop year?

[AdamSmith]

Charlie you asked how farmers view the usefulness of the PRO's. First off the PRO's are not price preditors, they are performance predictors. They are a measurement of the CWB's own view of how well they will market grain in a given year. And as such they have become more of a hinderance to farmers than they are of any usefulness.

How any farmer can view these numbers with any sort of confidence is beyond me. Last years fiasco shows that these numbers have more to do with politics than anything else. The PRO's are merely a sop for "change advocates". For the last ten years the CWB has been trying to replicate the features of the open market while maintaining their single desk status. With each passing year it's becoming increasingly obvious that it can't be done. The open market is the open market and the single desk is the single desk and they're like oil and water. They don't mix.

If only more people would come to this realization then maybe the CWB will stop trying to emulate the open market, which only makes them poorer marketers not better and "change advocates" will start demanding an end to this antiquated system.

In the real world, where performance counts, the CWB would've been out of business long ago. But this isn't the real world is it and the CWB will continue to screw up a perfectly good industry.

So to conclude Charlie, for me the PRO's are as useful as a flatbed grain truck.