CWB Variety Survey

[charliep]

Noted the release on the CWB variety survey. Working on an interesting project around feed grains and have done similar things around ethanol that has a major component of mid quality wheat. I will note I have not called feed wheat (something frozen, spouted, light weight, what ever) that is dumped into the feed market because nothing wants it. Where are we going on non human consumption wheat for domestic markets.

Source: CWB release.

Quote: "Vast majority of Prairie wheat grown for food, not fuel

October 9, 2008

Winnipeg - More than 88 per cent of wheat acres on the Canadian Prairies are seeded with spring wheat or durum, used mainly to make bread and pasta for human consumption.

The CWB's 2008 Variety Survey, released today, shows the proportion of wheat grown for food has not changed from the past, despite recent public attention to ethanol production. The vast majority of western Canadian wheat farmers still plant Canada Western Red Spring wheat (61.9 per cent) - a premiere breadmaking wheat - or Canada Western Amber Durum (26.5 per cent), a high-quality ingredient in pasta and cous-cous.

"This survey confirms that Prairie grain farmers are still working to feed the world," said CWB president and CEO Ian White, adding acres dedicating to milling wheat have for decades hovered around 90 per cent of total wheat acres.

There are seven other minor classes of wheat, including those used more frequently for animal feed or ethanol. A new wheat class - Canada Western General Purpose - was introduced this year with no milling quality requirements, intended to introduce high yield wheat varieties for the feed and ethanol markets. It now contains three varieties." End quote

[craig]

What the CWB neglects to say is that through the power they exert at variety registration meetings they basically allow producers no choice but growing hard red spring wheat. They also discount other grades of wheat to HRS which tends to mask the true value of winter and CPS wheat. They are doing their best to hamstring the new General purpose class by putting unrealistic yield targets on the class. Finally they fail to mention the large increase in soft white wheat production outside the traditional growing area which is all slated for ethsanol plants. Maybe they should be explaining to many producers why non board feed wheat values held there value while milling wheat tanked. It looks like my #2 CPS wheat will likley end up in the feed market at the same time the board claims they are short of CPS.

[Zaphod]

The CWB is lying. Stats Can shows that HRS wheat acres as percent of total wheat is its lowest ever. Just because their survey shows more HRS varieties doesn't make it true. SWS and HRW wheat are gaining fast. What are people's experience with growing SWS on dryland this year?

[Zaphod]

Stats Can shows 81% of wheat is HRS, not 88% as claimed by the board.

[DogPatch]

How many times have Stats Can been right? I know for a fact that I don't tell them the truth to every acres and head of livestock that I have. That atleast before I told them that I wouldn't answer their surveys anymore. I would put more value in a Permit book number myself.

[Zaphod]

I understand the Stats Can problem, although I would say that fudging the numbers eventually comes home to roost anyway. But whatever. The problem with the CWB data is that they're only surveying people who have permit books, which leaves out a whole bunch of people who have given up on the board and are growing non-HRS wheat.

[charliep]

The problem with permit book acres is not everyone
has a permit book and close to all these acres would
be non CWRS/CWAD. Would question whether
farmers are more truthful in permit information than
what they report to statscan.

[furrowtickler]

Regardless, that number of 88% is a dream - kind of like POT saying two weeks ago that fall time is a time of great demand and this fall would be no different. It's called kickin and screamin before they get knocked down.
Good time to buy POT though as they will bounce back at some point.

[craig]

Interesting to note that the board is treating non milling uses for wheat as almost a threat. Only reinforces the fact that the board acts in only their best interests and not neccesarily that of the farmer. Farmers will choose what makes the most economic sense for themselves and given more options in the future ( better varieties, more market options) will move away from our traditional milling wheats.

[Zaphod]

Has anyone ever noticed that over 80 percent of the spring wheat milled in Canada is made from number 2 HRS wheat and less than 20 percent is from number 1? What does that tell you about the CWB's claims about wheat quality and the need for KVD? It also explains why grade and protein premiums have been next to diddly squat. Ask your rep next time.

[bluefargo]

I hate acronyms. Mainly because I'm always the only idiot in the room that doesn't know what they mean.
I'll bare my ignorance once again. What does POT stand for?

[charliep]

Saskatchewan Potash Corporation. It is the letters you would use to get a share quote.

If the meltdown carries on, it may also be the more medicinal product to help sooth farmers and investors nerves.

[charliep]

As I have indicated, the calculations around class, grade and protein spreads is one of the least understood and perhaps most important components of CWB price pooling. All CWB non durum wheat sales are stuffed into one pricing pot and market signals/returns are fairly arbitrarily divied out. 99.99 % of farmers don't care and I think this has been to their detriment in terms of market signals around what to grow.

Off topic but I ofter wonder why the CWB runs things like producer payment options for individual wheat classes of the futures markets that are closed to that class characturistic (MGE with CWRS/CWHW/CWES, KCBT with CWRW/CPS and CBT with SWS). Yet all classes remain pooled with the big boy - CWRS. The real impact is the new world is the link between producer options and the pool versus the risk of different market moves on CBT, MGE and KCBT and the impact on farmer risk for some who uses PPO.

Perhaps a place to start is separate pools for the different classes of wheat. Again, if they can separate the PPO by class, then the CWB can do the same for overall pool with the end result better market signals/reduced risk (also lower risk management).

[charliep]

should be lower cost risk management.

[Choice2U]

Charlie....your last comment about POT just killed me. I swear I laughed aloud in my office for 50 seconds.