• You will need to login or register before you can post a message. If you already have an Agriville account login by clicking the login icon on the top right corner of the page. If you are a new user you will need to Register.

Announcement

Collapse
No announcement yet.

CWB

Collapse
X
Collapse
 
  • Filter
  • Time
  • Show
Clear All
new posts

    CWB

    sent this out as an Op Ed piece will be interesting to see what media does pick it up.

    The lack of credible information and honest representation of farmers from the CWB “group of 8” has now clearly gone against who they claim to represent– farmers of western Canada. Statements regarding the recent increase to the CWB’s contingency fund once again point to the seriousness of misleading information being promoted by this group of 8.

    As a former board member, the board submitted a request to Minister Ritz in the spring of 2011 to increase the ceiling of the contingency fund to $90 million. This initial increase was made for crop year 2010/11 and since then it became apparent that another request would be needed to ensure the amount allowed into the contingency fund would accommodate the 2011/2012 crop year.

    These funds are generated when farmers sign up to use the PPO’s (producer payment options) and are fees for risk management to ensure the fulfilled of contractual obligations. The programs were introduced due to a call from producers for the ability to market their wheat or barley outside of the pool accounts. These programs attempt to mimic an open market while maintaining the single desk status of the CWB. Substantial use of these PPO programs shows that producers understand and accept that a basis that includes fees for risk and administration is the cost of doing business in the PPO programs. With that being said, it should be fully acknowledge that any excesses or profits incurred by the CWB in their execution of those contracts belong to the CWB. This is really no different than if a producer signs any commodity contract with any other player in the grain trade in western Canada.

    Since these are not transactions done in any of the pool accounts, there should not be a transfer of excess funds from the contingency fund into the pool accounts. Any suggestion that the excess in the contingency fund should go into the general pool accounts is false and goes against the policy in place that the board of directors and management has accepted and supported all along. The funds generated are the property of the corporation (the CWB) and must be protected from the group of 8 who show contempt for producers who participate in PPO programs.

    It can be argued that the costs associated with these programs are excessively high. However, due to serious losses the CWB incurred in the PPO programs back in crop year 2007/08 changes to how the CWB administered the PPO program had to be implemented. Increasing the fees for risk management was prudent to ensure that there would not be a repeat of the losses experienced in the 07/08 crop year. With marketing freedom, no doubt the CWB will have to adjust the options offered to farmers to make them more competitive with the grain trade.

    As to the excessive television, internet, print media focused on eastern Canada - even passing post cards out in Toronto subways - once more goes to prove that this group of individuals is not focused on representing western Canadian farmers. Contrary to what the group of eight has suggested, the board did not hold a vote to allocate $ 1.4 million dollar for the ad campaign. Taking extreme liberties with board decisions shows how dysfunctional these eight directors have become. And furthermore it shows how they have broken the code of conduct directors of the CWB are supposed to follow. It’s time to move forward. It is time to allow our farms, business; communities have a strong future in all aspects of agriculture.

    Jeff Nielsen
    jeffniel@platinum.ca

    #2
    Good work Jeff!! Seems the crazy eight will stop at nothing.....could I say Kamakazi eight???They seem determined to pilot this thing into the ground!!!!!!

    Comment


      #3
      I think after they are thrown out on their ear, a full
      accounting should be made to show just how much
      these left wing loons went and what they have cost the
      grain farmers of the west.

      Comment


        #4
        And Jeff tell us why you wanted to be a director of the CWB in the first place. I'll bet that I can guess.

        Comment


          #5
          Jeff or anyone,who or what or how does an
          organization like the cwb descide on the market
          direction on something like wheat?

          Did you guys have a tech division that interfaced with
          a fundamental division or what?

          Comment


            #6
            Hey Willagro I think your on to something but
            Jeff's master plan to put Canola under the board
            was foiled so he tried to change it from within
            and had his hands slapped. That must be it only
            some leftwing loon would do that wouldn't they
            Wil

            Comment


              #7
              cottonpicken

              The CWB doesn't try to call the market or advance/differ sales based
              based only on market intelligence/opinion. The merchants in the sales
              department have some discretion on short term pricing but that is limited
              by the fact they effectively market 1.5 to 1.75 million tonnes of wheat
              every month. Why? To utilize storage and logistics capacity. Buyers also
              average sales through the year based on the needs of their mills each
              month/storage capacity.

              The CWB claim to fame is really the pricing pace concept over a 15 to 18
              month period and using price differentiation to allocate sales. Their risk
              management department will use futures to speed up or slow down the
              pricing pace at different times during the year. The outcome is a
              performance measure in the annual report.. The pricing pace is approved
              by the board of directors and executed by the operations side.

              You also need to understand price differentiation (ability to sell the same
              wheat into different markets for different prices) and the sales plan
              developed in the sales department.

              Enough from me. Dr. wilagro can take over now and explain the poollng
              system to you. As a long term CWB supporter, they should have a strong
              understanding of operations pool and be able to articulate it to farmers.

              Comment


                #8
                I should note the CWB does do price forecasting in the Pool Return Outlook
                forecasts and from there the producer payment options. Your question might be
                whether the CWB would use their market intelligence and opinion to speculate and
                the answer (from my knowledge) would be know.

                The answers on durum and malt barley would be different. They do
                (unsuccessfully many times) to time their sales to market opinion. Not enough
                volume or consistent sales to make a pricing model work. Malt barley total
                payments in particular reflects the timing of sales during the crop.

                Comment


                  #9
                  Freudian slip. Last sentence first would be NO - not KNOW. They don't KNOW and from there the real answer - NO.

                  Comment


                    #10
                    Sorry for taking off topic Jeff. Good discussion points. From lack of
                    response, obvioustly general agreement on Agriville that the money
                    should be transferred to the CWB2 as a mechanism to helps this
                    organization backstop its risk on forward pricing contracts.

                    Comment


                      #11
                      Jeff

                      Who picked up the tab for the losses in 07/08 in discretionary trading?

                      Can farmers see the report on those changes? I think it was a couple of ex cwb employees that did the report. Goff said at a meeting back then that farmers couldn't see the report even though we paid for it.

                      Comment


                        #12
                        Dear Jeff,

                        We had a good discussion on Monday... the Contingency Fund should be converted into shares that are owned by those PPO growers that donated this money to the CWB.

                        If you look closely at the present contingency fund and its function in the old CWB Act... it was actually meant to function with a zero balance with both positive and negative fund balances envisioned. When the new voluntary CWB starts functioning... truly the confiscated funds from growers should be a part of the capital base along with the rail cars and other capital assets rolled into the new CWB. Saying that PPO sellers 'voluntarily' contributed to the CWB 'contingency fund' is simply NOT true. When I sold milling wheat to the CWB... with futures only transactions... there was only the slightest glimmer of faint hope that there would be a voluntary CWB in the near future.

                        If you look at the basis being charged... on these PPO contracts... it didn't go truly berzerk till the vote was over in August 2011.

                        There needs to be some recognition for those growers who have donated tens of thousands of dollars to the contingency fund since it went positive after the last trading fiasco!!! If there ends up to be $100M in the contingency fund... it came from PPO holders/sellers... NOT pool pricers!

                        Comment


                          #13
                          Not to argue with you on this Tom but who, then, would/should have been responsible for that huge loss a few years ago???

                          Maybe you are just paying back the loss you incurred?

                          Just an unbiased question not being argumentative.

                          Comment


                            #14
                            The issue of who paid is in the 2007/08 annual report. The readers
                            digest version would be farmers who used both producer payment
                            options and the pooling system. In 2008/09, about $19 mln were
                            transferred back to the pooling system from the contingency fund of that
                            year to pay off the supposed debt of the 2007/08 crop year (a board of
                            director decision/policy). Again, documented in the 2008/09 annual
                            report. Since then, the contingency fund has built to $______ at the end
                            of the 2010/11 crop year (not public until the annual report) and so far
                            this year (2011/12) the contingency fund has built to $________. I would
                            hope there will be disclosure about the amount of money in the
                            contingency fund on January 1 or whenever so farmers know where the
                            new organization is starting from.

                            Comment


                              #15
                              So the pools paid back some of the 250 million loss. Then the contigency fund belongs to everyone?

                              Even with a surplus of 60 million it would take the fund a number of years to pay back the loss considering interest, time value of money(ha) etc.

                              Comment

                              • Reply to this Thread
                              • Return to Topic List
                              Working...