CWB returns $4.95 billion

[cottonpicken]

Ok still digesting the CWB annual report. Yet perhaps I haven't found all the parts to answer this question I have:
Arason has stated the following:
Last year, the CWB earned $4.95-billion, with 91 per cent of this amount returned to Prairie farmers.

Now using my farmer math shows that the CWB retained $445 million dollars.
now where did all that go to? or is my math wrong?

Last year, the CWB earned $4.95-billion, with 91 per cent of this amount returned to Prairie farmers. Returns for the 2007-08 crop year promise to be higher, and will certainly outstrip what is earned by U.S. producers of wheat and durum.

[parsley]

.....contingency fund magic .....

explain the spell on it.

[Vader]

The CWB has no retained earnings.

[parsley]

Ladies and gentlemen,


Step right up!

Welcome to the slight of hand commentary by none other than .....

Vvvvvvvvvvvvvvvvvvvader.



Parsley

[charliep]

I found the accounting side of the barley pools to be the most interesting (pages 70 to 72).

Malt barley revenue - $191.56/tonne port. Earnings for distribution - $194.41.

Pool A feed barley revenue - $203.46/tonne. Earnings for distribution - $193.10/tonne.

Pool B feed barley revenue - $184.64/tonne. Earnings for distribution - $260.18. Note that net interest earnings was the factor that topped up the B pool ($55.61/tonne versus $8.14/tonne on the A pools and $1.17/tonne on malt barley).

I find the last paragraph on the contingency section also interesting. Would find it interesting asking how the CWB board of directors makes decisions about how the feed barley interest earnings are allocated but would be a waste of typing.

[charliep]

I also note the other income (supported by note 19 on page 91) for an additional $50.17.

[parsley]

C'mon farmers,

Step right up here.

Place your Board barley bets today.

200 tonnes per bet

Watch my Board hands.

If you guess under which cup the barley money goes, you keep the money.


$194.41 malt under Cup A
Did you see it? Yeeeeeees!

$193.10 feed under Cup B
Did you see it? Yeeeees!

$260.18 feed under Cup C
Did you see it? Yeeeees!


Now watch my hands carefully. I have piles of cash.

I trade A for B and B for C and C for A and A for A and B for C and B for B and A for B and B for C and C for A and A for A and B for C and B for B.
and A for B and B for C and C for A and A for A and B for C and B for B
and A for B and B for C and C for A and A for A and B for C and B for B.

Pick one, snappy.
Ah, you picked this one?

Nothing under it.
You lose 200 tonnes,

C'omon suckers, er, snappers, step right up here..... One more time......

Parsley

[parsley]

Step right up.

The Board Circus is held monthly at Main Street in Winnipeg, Manitoba.

Tickets can be purchased from hoppsing.

Try your hand at the Barley Booth in March.

The Wheat Booth in April.

You might even win a Flaming Teddy Bear.

Parsley

[charliep]

Should take back to Erik's topic. Information you need to review is on page 1 of the annual report and supported by financial statments. Page 1 has a statement which highlights current year plus the last 4 years. As an example, net interest earning have decreased from $54.8 mln in 2002/03 to $30.6 mln in 2006/07.

[charliep]

Vader

excuse my use of the word "retained" let me rephase :
All earnings of the CWB are returned to producers less administration costs.
Ok so do I take it that admin costs now are 445 million?
Charliep will re read the financials ! thanks!
Vader:
perhaps you can also take some time to answer my questions on malt barley in a different thread titled CashPlus. Get Hopsing to help !!
Erik

[parsley]

Oh charliep, I am too uncontrollable!

Some things don't add up, though, so I presumed there is some of Vader's abra ca dabra business going on.

For example, the CWB ran 5,906 tonnes barley throught the CWB's till, but then stashed the cash into the contingency fund, bypassing the pools.

Huh?

Did they make the pool disappear? Kabong?
Forgot about it?
Did they burn the pooling-pillar along with those crosses?
Funny business, this abra ca dabraying.

OK , you wanna talk net interest earnings:

30.6 in 2006/07
36.1 in 2005/06
53.4 in 2004/05
56.1 in 2003/04
54.8 in 2002/03

Shrinking at the same rate as support for the Board is shrinking, is that a fair observation?


Parsley

[wilagro]

Parsley: Perhaps you should take some time off to study bookeeping/accounting practices and perhaps some forensic accounting as well.

So many instances of bad practices quoted without a thorough knowledge of the subject...tsk tsk. Not good at all.

[chaffmeister]

Arason is actually pretty close:

Total revenue: $4.95 billion (roughly)

Total "earnings distributed to pool participants": $3.81 billion (roughly)

Transferred to Contingency Fund: $1.88 million (roughly)

Total "Sales returns paid to payment program" (PPO): $710 million (roughly)

Total "distribution": $4.95 billion.

If you add the distribution to pool participants and the PPO returns, you get 91% of all revenue. So that all adds up.

The rest is direct costs (marketing costs - freight, terminal elevation, etc) which is $600 million, plus admin, other stuff, contingency fund, etc.

The thing I don't like is that the CWB "revenue" figure used to be basis instore. Now its a tally of all sales - instore, FOB, CIF, C&F, delivered rail, etc, etc.

That's why you now see a huge figure for terminal charges, freight (which includes ocean freight for CIF and C&F sales). In other words, it's pretty tough to figure out how they really did marketing grain.

"Other Income" is "interesting" as well. Among other things, this year this includes "a prior claim settled in the CWB's favour" that hit the feed barley B Pool. Worked out to about $50/tonne.

Add that to the interest revenue in B Pool of about $55/tonne and there's $105/tonne of revenue that has NOTHING TO DO WITH MARKETING. This made the PRO higher than sales vales. And even with the artificial PRO, the CWB still couldn't market through the pool (couldn't attract deliveries) so they sold "out side the pool" about 6,000 tonnes.

Reminds me of a famous quote (with apologies to Horatio Nelson):

"Transparency? I see no transparency."

[parsley]

wilagro,

You are absolutely right.

You'd need a forensic accountant.

The problem I see, is the lack of consistency.

Every year, the CWB has to abra ca dabra because their marketing/spending/transferring pracices are aimed at enhancing....deceptively.

The CWB search to do something creative to MAKE THEMSELVES LOOK BETTER THAN THEY PERFORMED.

So they are tricky magicians.

Why should a farmer need to be a forensic, when the CWB of his money spends Millions "communicating"?

All they want is a bloody financial report that is revealing, easy and accessible.

Demmurrage was a typical example.


One thing I do know, wilagro:

Mamma's purse is light.

Been that way for 40 years.

Mamma wants a heavy purse.

Mamma got mad.

The B of D screamed, "Lighten up, mamma"

The CWB staff thought they meant take a little more cash, and they skimmed off another layer for stress bonuses.

Mamma's purse got really light.

Now, Mamma's not very good with numbers but she's done a lot of lugging and you can't trick her on the weight of her purse.

Ah....and therein lies the problem.

Never pee-off the mammas.

Parsley

[chaffmeister]

The CWB appears to like complexity - it makes deception that much easier.

How many people looked at the Annual Report and saw "total revenue much higher"? You can be sure that's what the media saw - and reported - because that's what the CWB wanted them to see - and say.

I spent a lot of time pouring through a number of documents:

CWB 2006/07 Annual Report - numbers and commentary
CWB 2005/06 Annual Report - numbers and commentary
CWB website - each and every PRO release for the 06/07 crop year, including the comments
Canadian Grain Commission weekly stats - each week for 2006/07
Canadian Grain Commission monthly export stats reports - each one for 2006/07 crop year
Montana cash grain stats
EU cash grain stats

Once you do that, you can see that the CWB:

(1) did not do as good a job at marketing barley as they would like you to think, and

(2) engaged in systematic deception to spin their story at the expense of a true representation.