CWB and friends need to come clean

[chaffmeister]

Thanks Fran - it's good to know someone's paying attention! Seems whenever I post this kind of stuff, it puts the Borg to sleep or something....they just plain stop posting. For a while.

Grainbeetle - before you respond (as if!) take note that the math is simple, not theoretical and uses only the CWB's own numbers. Nothing conjured, nothing estimated, nothing assumed.

It begs for an explanation.

[agstar77]

I see the rhetoric on this site is being lowered to a new level. Maybe that's why no one will vote for you.

[silverback]

Rhetoric AS? Give me a break!

Farmers demand freedom of association and rights to their own property and it is rhetoric?

Farmers show how the cwb cannot even provide a simple average price to the farmers it claims it answers to, and it is rhetoric?

Funny how socialist's define things differently than anyone else.

[bucket]

Hold on everyone, its going to get better tommorrow. The new pro is going to be out and the pro's will drop by at least 40 a tonne. Thats right a buck a bushel. So for all you board supporters how many bushels did you get in at the high price? Put it in a percentage of your production. If you grow 100 tonnes and you have 2 permit books - your production is delivered 100 percent. If you grow 1000 tonnes the best a farmers could do is 25 percent. He could not access the delivery of 100 percent of his grain. And even if a guy took the epo at 90 percent and paid the extortion fees for getting his money his returns on 75 percent of his crop would still be lower this thursday than they were on wednesday. He is being forced to take a larger loss than a bunch of small left wing communist farmers who collectively could not fill a panamax.

[chaffmeister]

Bucket - I agree that the PRO should drop to reflect reality BUT

Do you really think the CWB would drop the PROs during two key elections?

I expect to see the PROs start a serious drift lower starting in Dec.

[chaffmeister]

Agstar - Who are you talking to? Someone here looking for votes?

[agstar77]

Not you Chaff.

[andersoj]

How quickly we forget what happens when Canadians sell lumber and beef to the USA. Why do we think grain will be any better if we don't have collective clout?

Alberta report misuses data to reach false conclusions: CWB

August 8, 2008

Winnipeg – An Alberta government report has used false assumptions and selective data to undermine the value of the CWB, its president and CEO Ian White said today.

“This study is badly flawed,” White said. “The authors have made sweeping assumptions to create comparisons so simplistic that they are meaningless.”

The report, commissioned by the Alberta government and prepared by Informa Economics, was released last week. It calculates on page 34 that the CWB earned significant premiums (prices above market values) of up to $33 per tonne in 10 of 11 markets studied, but then uses a number of incorrect assumptions to discount them.

The report wrongly assumes that all wheat is the same and that overall market share is what determines the CWB’s ability to exercise market power, White said. It ignores the crucial fact that the wheat market is not homogeneous, but made up of many segments that purchase specific kinds of wheat. In certain segments, the CWB will hold a very large market share for a particular kind of wheat and thus earn substantial premiums.

Because of its flawed premise, the report selectively focuses on only 11 of the 60 to 70 actual wheat markets the CWB sells into each year – rejecting important, high-value markets like Canada, the U.S. and Europe. Based on false assumptions about what grades or qualities of wheat these markets were buying from Canada, the report then wrongly adjusts and discounts the higher prices achieved by the CWB in 10 of the markets.

“This adjustment does not reflect how grain marketing works in the real world,” White said. “Wheat is different, markets are different and our strategy as a single seller takes advantage of exactly that fact.”

The report also blatantly misuses grain handling and transportation data published by the respected Quorum Corporation, which produces the quarterly Grain Monitor report under contract to the federal government. Quorum emphasizes in its reports that efficiency comparisons cannot be made between wheat and canola based on its calculations of export basis and producer netback for each crop. Yet that is precisely what Informa has done.

Examples of other flaws include:

Lack of acknowledgement that the CWB’s dominant position in the durum market supports the overall price structure.
Comparisons to U.S. elevator prices, which are based on a different set of market factors than Canadian wheat returns. American wheat has an intrinsic price advantage due to factors such as the dramatically lower proportion exported from the U.S. (40 per cent compared to 80 per cent in Canada). This means less U.S. grain is sold into diverse markets outside North America where prices tend to be lower and transportation logistics more expensive.
Handling system costs are counted twice in the comparison between U.S. and Canadian returns for wheat and durum. Farmgate values that already account for system costs are used, then a canola-versus-wheat comparison is added that also accounts for those same costs.
Failure to account for the CWB’s ability to assure customers of long-term and consistent-quality supply, which is a valuable competitive market advantage, attributable to the single-desk structure.
Failure to acknowledge the dramatic differences in U.S. and Canadian rail capacity. The study also fails to account for the important role played by the CWB in keeping regulated rail freight rates in Western Canada lower than American rates.
Based on all of the above, the CWB completely refutes a key finding of the report that an open market would generate significantly more revenue for Prairie farmers than the single-desk system.

“It is ironic that this false conclusion is being circulated in a year when the CWB marketing approach has delivered extraordinary returns to farmers,” White said. “We’ve conservatively pegged that benefit at $560 million for 2007-08.”

White said the CWB will conduct further, more in-depth analysis of the report’s methodology and conclusions and intends to share those results when completed.

Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada’s biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers.

[parsley]

You miss the point.

Kids always squabble about the money thrown down on the ground for them to pick up. How much? Who got the most? Who's hiding coins? Who's sharing? Who got US coins?

The important issue is about choice. About being able to sell the grain farmers grow to whom they choose.

Don't forget it.

Parsley

[chaffmeister]

andersoj:

What part of the simple math that Fransisco posted don't you get?

Your "marketing clout" is getting you and your neighbours - the entire western economy - OVER ONE BILLION less than what average prices would have given you.

Selling grain to the US isn't the issue. Call it the "individual right to prosper".

If you want to go on giving grain away, go right ahead. But don't tell your neighbours that they have to as well just so you feel better about it.