Western Grain Elevator Association on barley marketing

[LWeber]

(REUTERS) Grain handlers said on Thursday they will not participate in the Canadian Wheat Board's new barley pricing program and asked the federal government to end the agency's marketing monopoly on the crop. The CWB's proposed cash pricing program for malting barley would not send accurate price signals to farmers and would be cumbersome to run, said a spokesman for the Western Grain Elevator Association, which represents the seven largest grain handlers in the country.

RELEASE

The Western Grain Elevator Association is calling for the complete deregulation of barley as soon as possible, explaining that reaching resolution with the CWB on contract terms is not achievable.

The members of the WGEA have been trying to negotiate malt barley contracts with the Canadian Wheat Board over previous months, but the terms offered by the CWB are unacceptable. "The CWB's contract terms do not allow WGEA member companies to provide full price transparency to their farmer customers, nor do the terms provide farmers and end use customers with the right market signals. In addition, the inherent restrictions within the contracts do not allow grain companies to operate in a commercially reasonable manner," said Wade Sobkowich, Executive Director of the WGEA. "Given that the CWB is offering terms under a 'half-way' system that are unacceptable, the WGEA has no choice but to call for legislation to implement market choice for barley farmers as soon as possible and no later than August 1, 2008."

The WGEA cites the lack of a dispute resolution process as part of the problem in the inability to arrive at acceptable contract terms. "Without the complete deregulation of barley, and without the ability to arbitrate contract terms with the CWB, the industry is placed in an untenable position," says Sobkowich. "Even with complete deregulation we will still have a need to resolve disputes on many related issues in the transition period." The WGEA members feel it is important to address these issues in order to move forward in the contracting of malt barley.

"Our objective is to help make the industry more profitable - this includes farmers," added Sobkowich. "Within a competitive marketplace grain companies will be looking to maximize marketing opportunities, and look forward to working with their farmer customers in this regard."

The Western Grain Elevator Association is an association of seven farmer-owned, public and private grain businesses operating in Canada, which collectively handle in excess of 90% of western Canada's bulk grain exports. WGEA members own grain handling facilities throughout the country and at the ports of Prince Rupert, Vancouver, and Thunder Bay.

[parsley]

Minister Ritz is supposedly in charge of the CWB so is he is like the guy who has never operated a computer, and doesn't know how to even turn it on, so he asks the staff to do it for him?

Parsley

[craig]

No one seems to be commenting on the significance of this press release. The WGEA normally has sat on the fence when it has come to issues related to the CWB. We now have end users, the grain trade and the majority of farmers saying they want an open market for barley.The CWB has again been caught with their pants down supposely reacting to a problem well after the fact. I do believe that the short period in which the open market had a chance to work has opened a lot of eyes.

[parsley]

The significance is this...If I had shares in a terminal...

I see wheat and barley deliveries predictably scarce in the fall, after all, farmers are not wanting to plant wheat or barley.

Considering that Board grains are the money makers for the terminals, I'd start to sweat. Farmers DO NOT vision Board grains keeping their farms viable. Money. Money. oh so scarce.

The grain terminals realize the decision to plant a crop is directly dependent uipon the financial reward the farmer gets IN HAND at farmgate. NOT the Boardgate rewards.

The only one dispensible here is the Wheat Board.

Parsley

[AdamSmith]

Craig,

with respect to the Canadian Wheat Board,

there is only one thing of true significance and that is cwb reform/repeal legislation.

Everything else is just dust in the wind.

I find myself sick and tired of the same old same old.

A cwb snafu/screwup/piss poor price occurs, farmers belly ache and bitch (I'm as guilty as any one), then two years too late the cwb pretends to do something, while never actually doing anything at all, in fact what the cwb has become a master of giving the appearence of listening and responding to farmers while actually tightening their grip on the wheat and barley economy to the point of strangulation instead.

take the PPO's, a new pricing opportunity for farmers? maybe! a new cwb money grap? absolutely.

It just goes on and on and on for ever.

It will never change, it will never get better, it will only get worse.

The only real significance of these news releases is that they will guarantee an even more dysfunctional grain industry in western Canada.

CWB retribution will be kicked into high gear, gridlock will become the norm, and our dear dear Minister Ritz will do absolutly and positively...

NOTHING SIGNIFICANT.

But heck why should we expect anything different?

It's not like they campaigned on giving farmers marketing choice or anything like that,

I'm not pessimistic, I'm realistic.

Screw the rotation, Canola and Peas in 08.

[craig]

Adam Smith
While I share your frustration, I do believe that support for an open market from outside the producer community is a positive step forward. I think most people realize that the barley issue was not won or lose on what was best for the barley industry but on a battle over regulated and deregulated systems. Rejection by the malt industry and the grain elevator association to the status quo is an indiction there are serious unresolved issues in that industry. It is also an indication that those industries are not prepared to accept the feeble efforts made by the board to address the issues.

[parsley]

A dispute-resolution mechanism set up would have relieved some of the pressure in the past. The CWB has never addressed disputes; rather, they have used their internal "methods" to "convince" accredited agencies what the "only single-desk" resolution could be. "We'll make you an offer...."

At this point in time, the CWB's secret omnbudsman appears to be Deana Allen. Neither elected, nor appointed, it appears this staffer makes decisions and sees them carried to fruition.

And since, first and foremost, the CWB is percieved to have set a track record for guaranteeing money sticks to the CWB itself, (one the mob could only hope for), farmers' CWB pooling accounts will continue to serve as the employee slush-fund.

Will the legislated head of the captive employers continue stumbling along, immune to change, self-blinded to pool-dipping, frightened by powerful decisions?

Many think so.

Parsley

[parsley]

Craig hit it on the nail when he mentions how significant having WGEA on side for barley deregulation now. It must have been a lively discussion at WGEA meetings when you have members such as Patterson, P&H and Weyburn that have been life long CWB buddies. WGEA needs to be commended for coming out with a positive stance on barley.

In the article below, there is a good quote by Deanna Allen, CWB's media spin wizard.
"It appears to me to be a co-ordinated effort to try and bring some momentum forward for a deregulation to the industry, when what we're trying to do is bring stability to the industry," said Deanna Allen, a CWB vice-president.

OK Deanna , what stability is the CWB bringing to the industry? MIAC, WGEA and producers have told you we want deregulation. What part of that does not sink in?? How can the CWB bring value to producers when they still want their hand in the cookie jar for no reason? What value do you bring to the industry or producers when you mask pricing signals and lack price transparency? Geez guess I shouldn't look on the internet, or use my phone, to see what US producers are getting. Or see what ICE has posted for export malt or feed prices.


(Adds Canadian Wheat Board comments)
By Roberta Rampton
WINNIPEG, Manitoba, Jan 3 (Reuters) - Canadian grain handlers said on Thursday they will not participate in the Canadian Wheat Board's new barley pricing program and asked the federal government to end the agency's marketing monopoly on the crop.
The CWB's proposed cash pricing program for malting barley would not give farmers accurate price signals and would be cumbersome, said a spokesman for the Western Grain Elevator Association, which represents Canada's seven largest grain handlers.
"It is a mess, because the wheat board is trying to create some half-way system that is the worst-case scenario," said Wade Sobkowich.
The confusion over the new program comes as Prairie farmers begin to decide what to grow in spring.
It is the first time the grain companies have publicly called for Ottawa to dismantle the CWB's "single desk" for sales of barley, which covers barley grown in Western Canada and sold to maltsters and export markets.
Barley sales accounted for about 11 percent of the C$3.5 billion ($3.5 billion) in revenue for the farmer-controlled CWB for the year ended July 31, 2006. Most of its revenue comes from wheat sales.
The government had tried to end the barley monopoly by regulation as of Aug. 1, 2007, but a Federal Court judge ruled the move required full legislative approval of the House of Commons, where it faces political opposition.
An appeal of the court's ruling will be heard Feb. 26.
The CWB moved to ease concerns about its traditional pooled prices with the new program for malting barley, which would track the daily ups and downs of the spot cash market.
But it had not yet announced how it would derive the cash prices, citing talks with grain companies and maltsters.
The CWB expects those discussions will continue, since buyers of malting barley have said the pooling system does not work well for them, an official said.
Federal Agriculture Minister Gerry Ritz said in a statement earlier this week that he does not support the CWB program.
Canadian maltsters, which buy about 60 percent of the CWB's malting barley, rejected the new pricing program last week as not being transparent, and repeated calls to end the monopoly.
"It appears to me to be a co-ordinated effort to try and bring some momentum forward for a deregulation to the industry, when what we're trying to do is bring stability to the industry," said Deanna Allen, a CWB vice-president.
Grain companies handle export grain on behalf of the CWB, which does not own facilities.
The CWB's terms for the new program are unwieldy, the Western Grain Elevator Association's Sobkowich said.
"They're complicated, they're confusing, they're expensive, they limit the price going back to the farmer, and they don't send the right market signals to the grower or the industry," he said.
The grain companies also want a way to resolve disputes with the CWB through an independent third party, he said.

[AdamSmith]

"It is also an indication that those industries are not prepared to accept the feeble efforts made by the board to address the issues."

When Aug 1. 08 roles around, and barley is still lanquishing under cwb control, it will mean the WGEA and MIAC HAVE accepted the feeble efforts of the board.

Now if when Aug 1. 08 roles around the WGEA tells the cwb and the feds that they will no longer handle barley, even under threat of prosecution, and MIAC buys only non designated area barley, then and only then will I believe they are serious.

I believe in all my heart that this whole wheat and barley thing has to get worse before it gets better.

It quite unfortunate really, but when you have minister after minister believing that negotiation is possible with the cwb, we will always be going back to square one,

Negotiation is NOT possible,

the cwb is not a normal institution with normal people in charge,

the cwb is the penultimate political creature and market control is their only policy.

The men and women at the helm of the cwb are on the extreme fringe of political thought

and they would rather see the entire industry crumble than give one tinny tiny bit of control away.

Sounds extreme, and if you were dealing with any other institution, my position would be extreme,

but these guys are truly NUTS.

[AdamSmith]

CWB media spin at its best, read Deanna's quotes in this on too!
I agree Adam, they are nuts!!!
Eirk


Ryan Jackson / Edmonton Journal

Some are calling for the complete deregulation of the barley market.

THE organization that represents Canada's major grain companies is calling for the complete deregulation of the barley industry "as soon as possible."

The Western Grain Elevator Association said in a statement Thursday that it could not resolve its differences with the Canadian Wheat Board on malt barley pricing, saying the terms offered by the board are "unacceptable."
"The CWB's contract terms do not allow WGEA member companies to provide full price transparency to their farmer customers, nor do the terms provide farmers and end-use customers with the right market signals," said Wade Sobkowich, executive director of the WGEA.

"In addition, the inherent restrictions within the contracts do not allow grain companies to operate in a commercially reasonable manner," he said.

The association's announcement caught the wheat board by surprise.

Deanna Allen, vice-president of farmer relations and public affairs, said the board felt that it had devised a marketing scheme that "solve(d) all of the operational issues that the companies had identified" with the CWB's current price pooling system.
"It mimics an open market in that farmers would be paid a cash price on the driveway as they're delivering their malting barley," Allen said. The amount would be based on the price of feed barley, plus a premium.

She said the board hasn't even had a chance to fully explain its proposal to grain growers yet.

"We think it's very innovative," she said of the proposed changes, adding that they would still allow the CWB to use its monopoly powers to extract the highest possible prices from the marketplace.

Any additional money the board was able to obtain, over and above the initial cash payment farmers received, would be paid to them later as a dividend, she added.

The board started developing a new pricing mechanism for malt barley last summer in response to industry concerns, Allen said.

The Canadian malt barley market was thrown into turmoil last spring and summer when Ottawa attempted to remove the wheat board's sales monopoly, on short notice, through a cabinet order.

A day before the government order was to take effect, the Federal Court ruled that the federal order-in-council was illegal. Ottawa had to pass legislation to achieve its goal of "marketing choice" for farmers, the court ruled.

Talks between the wheat board and the industry on a new pricing policy have been taking place for months, Allen said.

Agriculture Minister Gerry Ritz also panned the CWB's barley pricing plans earlier this week in an opinion piece released to newspapers, calling it a "half-measure."

[LWeber]

http://www.canada.com/topics/news/national/story.html?id=2b4be312-8e15-4b9a-baa0-646dcd60a576&k=82184


"It appears to me to be a co-coordinated effort to try and bring some momentum forward for a deregulation to the industry, when what we're trying to do is bring stability to the industry," said Deanna Allen, a CWB vice-president.

[AdamSmith]

"It appears to me to be a co-coordinated effort to try and bring some momentum forward for a deregulation to the industry, when what we're trying to do is bring stability to the industry," said Deanna Allen, a CWB vice-president.

[parsley]

Looks like Deanna Allen is having a difficult time "stabilizing" both MIAC and WGEA.

The boys awoke.

...and noticed the post-combining autumn-cupboard has been stabilized bare.

Parsley

[AdamSmith]

Ok, I'm going to beat this to death.

"... when what we're trying to do is bring stability to the industry," said Deanna Allen, a CWB vice-president."

FOR WHOM? My dear Deanna are you wishing to bring stability???

Not Farmers, there is nothing stable about selling $6.50 bushel malt barley and $6.00 feed barley for $4.00 and $3.00.,

there is nothing stable about farmers never knowing what the price of their product is.

there is nothing stable about making planting decisons based solely on blind faith and ignorance.

there is nothing stable about malsters never knowing whether their contracts will be delivered upon.

there is nothing stable about elevator managers having nothing to offer farmers with barley for sale except blank stares.

there is nothing stable about barley acres dropping like a rock off a cliff so long as the cwb has their greasy grimmy little mitts on malt and export barley.

there is nothing stable about a malt priced based off feed which in turn is based off cwb initials and cwb pro's.

there is nothing stable about everyone in an entire industry not just believing, but knowing deep deep down in their soles that the cwb is a parisite with nothing to offer except grief, misery, and dysfunction.

The only thing stable about the cwb is the low level of expectation.

[craig]

Deanna I'm confused. You said the CWB started working on a new pricing mechanism for malt barley last summer. Yet a few weeks ago you said the CWB has been working on this for a number of years and it got derailed last summer because the CWB wasn't sure it would be in a position to market barley.
Other point is that it is stated that they thought that the board of directors got it right in their new proposal. When is the CWB going to learn that a slim majority on the board of directors and all the support staff of the board haven't a clue in open market policy. It'd no different that asking the NDP to develop policy for the conservatives.