Malting Barley

[AdamSmith]

I believe Charlie asked a while back if anyone has delivered malting barley and participated in the 95% of PRO program.

Well I delivered 400t of Stratus 2-Row to Agricore United prior to xmas and when I went to pick up my cheque I found out that they ony payed me the current initial price and I had to sign a form that would be sent to the malting company that had bought my barley and it would be them who would then pay me the additional money that would bring my payment up to 95% of the PRO.

I'm still not clear if that is 95% of the Sept PRO or 95% of the current PRO.

This isn't what my idea of an effecient program would function like.

Also the initial payment equaled $3.31/bu. and the current PRO for standard select 2-Row is $4.32/bu. This compares to $3.50 US in North Dakota wich ie the equivilent of $5.50/bu Cdn. The US price is Robust which is a 6-row and so I would assume that a 2-row equivilent would net more like $5.75/bu Cdn.

Just another clear example that this system steals from us $1 to $1.5O a bushel.

[TOM4CWB]

Adam Smith;

I understand the CWB is today charging the CDN Domestic select barley buyers that $5.50 to $5.75/bu.

THe only possible explanation for a price at least $1/bu less is that the CWB pre sold a large amount of select barley... before it was grown or harvested... and now farmers are paying for this blunder.

This Barley market has to be the most disfunctional market on the face of the planet.

We are importing Danish and US malt barley into western Canada, while "designated area" barley producers would gladly supply all the barley we could possibly use domestically... if we farmers were paid even close what it costs to import this barley to our domestic western Canadian processors.

This one issue alone is costing huge inefficiencies and logistical problems for all players in our barley industry.

When will World War II end in western Canada?

[liberty]

I've got a question about the malt barley issue.

Is it possible that when the CWB sold the malt barley all it received was enough to cover initial payments, with the maltster not having to pay in full until the final payments are mailed out?

This could turn out to be a real sweetheart deal for maltsters, since they don't have to take the financial risk of paying a set price up front.

CWB supporters are fond of crowing about how the CWB gains premiums by minimizing risk. But what they are really doing is just tranferring risk to farmers. When you're a monopoly, that's simple enough to do.

[TOM4CWB]

Liberty;

It is very unlikely that the Maltsters remained speculators after signing the pre-pricing contract with the CWB, instead they would have most likely sold their malt products back to back with some profit margin over the CWB selling input price.

THIS is why the maltster must get through the committed CWB supplies (that they cannot get easily from farmers because of the low price) before they can even consider paying bigger premiums to farmers... for the future higher priced sales.

In the end all the CWB did was subsidise all the big US/CDN Breweries... out of "designated area" farmers pockets!

[Braveheart]

Let's accept that for the near term at least, the CWB monopoly on barley isn't going away. What would improve the situation surrounding malt barley pricing in Canada?

What if Western Barley futures at the Winnipeg Commodity Exchange were used to price malt barley relative to feed barley? This would give transparency to pricing, offer risk management tools to maltster, farmer, and even the brewer.

There must be a way the CWB could co-operate in a pricing system like this that would start to heal the black eye barley currently has with the single desk.

[Braveheart]

Flatbroke are you reading along here with a great intellectual thought forming in your mind.

[liberty]

We still haven't fully addressed Adam Smith's concern with his method of payment. If the maltster is not speculating and has paid up front for all of the barley, why would the CWB send any part of the bill to them at that point? It would be like asking them to pay twice.

[TOM4CWB]

Liberty;

I can see that the CWB cannot force farmers to deliver barley... but the Agents of the CWB very easily could be told by the CWB to procure barley in the most efficient and effective method... obviously paying a premium to what the CWB has charged... can easily be reimbursed by the CWB later... in whatever transaction method that simply can be hidden and not be tracked... so farmers in the "designated area" will never know what the true CWB "risk management" costs were for the 2002-03 select barley pool.

All we do know is that the price that is going to paid by the CWB is a crime!