rolfpennerforcwb.com

[agstar77]

That would be trusting you or other board members to look at the sales values and judge for yourself how things are going. There seems to be a lack of trust on this forum.

[charliep]

Sorry of budding in Rolf.

I have heard this comment many times. My
understanding is that the numbers that are
presented to the board of directors are those
developed by the operations side. When I have
heard this, I often wonder what due diligence the B
of D do in testing the validity of the prices or the
process from outside sources outside the CWB.

An interesting highlight from the CWB response to
the Informa study is the reference to how US prices
are adjusted to take into consideration they have
larger access to the domestic North American
market (page 8)

Quote from Market Mix section

Differences exist between the markets available to
U.S. sellers and the CWB. These differences exist
for numerous reasons including geography and
bilateral trade agreements. When the markets
available to sellers in the U.S. and Canada are
compared, the most obvious difference is that
sellers in the U.S. have a much larger domestic
market. This allows U.S. sellers to place less
emphasis on some of the lowest- value export
markets. To assess the impact to farmers of the
basket of markets available to the CWB
versus those available to the U.S., the CWB
calculated what its returns would be if it were
possible to market the entire western Canadian
wheat crop to the same basket of markets as the
U.S., in the same proportions. The chart below
compares the market mixes of both countries for
the 2007-08 crop year. Comparisons for the
2006-07 and 2005-06 years were very similar to
2007-08.

The most obvious difference between the actual
and hypothetical basket of markets is the greater
proportion of North American sales that would
exist if the CWB had the same market mix as the
U.S. In the CWB’s analysis, which showed that CWB
returns would be in the range of $30 per tonne
higher in 2007-08 if it enjoyed the same market
mix as the U.S., this factor contributed greatly to
the higher hypothetical CWB returns. This does not
imply that the CWB market mix should or could be
changed in future years to include more sales to
the U.S. market as there are logistical and price-
structure implications that serve to maintain the
relative stability of CWB sales into the U.S. End
quote.

I found it strange the CWB operations side (I
assume who wrote) criticized Informa Economics
for assumptions but they seem to make many
themselves in their analysis pieces. I would
question how aware the B of D are of the CWB
assumptions and whether they are tested using
outside sources.

Apologize again Rolf. Just drives nuts every time I
see the reference to the magical internal numbers
(the process by which the CWB 2006/07 annual
documented a pooling period risk management
process that cost farmers close to $50 mln - page
43).

[RolfPenner]

No need to apologize charlie you've probably dived into this question as much or more than anyone else here. So your insight is very much appreciated.

I think a lot of producers fall into the category of "trust but verify" and I think that it is very important for farmers to be able to judge for themselves whether or not the board is doing a good job.

[parsley]

There is an issue you might want to consider.

The CWB is the only entity that is allowed to license every pail of wheat and/or barley in Canada.

Take away the legislation entirely, some demand.Modify it, some add.

Fine, but but with the licensing restrictions gone, Rosann and Company is then able to pass a compulsory provincial wheat and barley marketing Board, (like the fish marketing Board, for example). She would, too.

However, if the Minister simply orders the Board to issue export licenses, we have instant choice, as does Ontario, in exactly the identical way, and Easter&Wells CO. cannot do a thing except squawk like magpies.

Parsley

[chuckChuck]

Charlie and Rolf
So on this issue of whether the US market pays a higher price because of a higher domestic usage. This is a very important point and has a huge impact in the comparison of US and Canadian returns. Rolf, If that is verified to be true by outside sources would it matter to you and those who don't care for the CWB?

When most farmers form an opinion on the CWB issue do they have the time and expertise to do the analysis and due diligence required or are they just trying to find arguments to back their preformed notions?

Would it not be important to analyse the marketing performance of the canola, lentil, and other crop markets and see how effectively they are working for farmers?

Didn't the Sask., Pulse growers commission a study a couple of years ago that showed the international lentil market was being poorly served by some of the pulse marketers because of processing overcapacity and undercutting of export market prices just to get market share to collect the processing fees? Rolf, what is the solution to that problem?

In a highly politicized farming community it is dificult to get farmers to think objectively about business decisions when it comes to the CWB.

[gregpet]

I'm glad Agstar brought upthe topic of the CWB's black book. I asked the question quite a while ago in this thread

https://www.agriville.com/cgi-bin/forums/viewThread.cgi?1206116026

but never got an answer. Here is the original post:

Got some information about the CWB’s little black book. This is the book that the directors claim the CWB sells our grain a premium prices. Kyle Korneychuk told us at his meeting in Foam Lake that he looked in the black book when he was first elected and yep sure enough the CWB sold our grain at premium prices.
After some digging and phone calls I found out how these prices are determined. Not surprisingly, in a monopolistic mindset the seller at the CWB phones around and finds out some prices and the they themselves determine what the ‘market price’ is that day. Then if they make a sale for $5-6 a tonne more than whatever price they themselves determine to be the market price they have concluded that they have sold our grain at a premium price. So, if I understand correctly, the sales person or group of sales people determine if they are selling our grain at a premium? Vader, Agstar77 is this correct? Please tell me I am wrong. Hopefully the internal audit of this process is not delayed any longer like it is being done now. I encourage all of us to contact our CWB directors and have this added to the agenda for the next meeting so it can be discussed.
One other small thing. I also found out that these sales people are so concerned about selling our grain at a premium that it does not matter when the grain is sold. Like they say timing is everything so when the phone rings after the market has fallen considerably they may sell at a premium that day but have missed the highs in the market. Doesn’t sound like they worry about timing the sale properly just making the sale when the phone rings and the market has retreated.
Vader, Agtar77 any comments? Am I wrong? Did I receive inaccurate information? Please enlighten us.

[bucket]

Penner

would/could you caomment on this fusarium program. Seems to me the people with feed grade wheat are getting bumped up a couple of grades so why are the people with good grain not getting the same benefit?

Why are a chosen few getting preffered delivery therefore getting better cashflow?

In a sliding market if anyone with good grain has to push into next year he is being forced to store and take a lower price. Therefore the farmers with fusarium feed grain are the only ones getting a premium.

What is the cost of this program. I am sure the rocket scientists that invented this have costed it to present to the board for approval.

Why is there no midge program? It can be blended or cleaned out.

I asked Larry hill these questions. His response " You know those are good questions and I'll be working on it and getting answers".

Little late to do due diligence now isn't it?

[parsley]

Hard for Penner to address a question on the Board's so called "chosen few" when Penner doesn't yet know who they are or what they get.

Even though the most imaginative thing you can do Penner, is make up an imaginary answer since you haven't yet snooped in Board books,..... don't you dare list either bucket or me. Just list chuck and all his little chucksters. LOL

Pars

[RolfPenner]

Bucket, you're asking some good questions there but parsley's right, I haven't even been elected yet so I'd only be speculating as to the answers.

But I share your frustration, a lot of these programs don't seem to make sense and a lot of times it looks like the board is playing favourites.

Hopefully I'll get some answers when I get to 423 mainstreet.

However, I do think that a voluntary wheat board will go a long way towards solving these problems. If the board doesn't come up with the right solutions or programs somebody else will. That is a very strong incentive to get it right and right now that incentive just isn't there.

[RolfPenner]

chuckChuck, you said,

<blockquote> "...on this issue of whether the US market pays a higher price because of a higher domestic usage. This is a very important point and has a huge impact in the comparison of US and Canadian returns." and "Rolf, If that is verified to be true by outside sources would it matter to you and those who don't care for the CWB?" </blockquote>

You'll have to clarify by what you mean by outside sources? I tend to go with the USDA statistics on this kind of stuff. Are you suggesting there is something wrong with the USDA's numbers?

I'm also curious as to why you think US domestic use should be taken off the table? It is part of what makes up the world price as does the domestic usage in all countries.

When I look at the last ten years of US hard red spring wheat exports it comes to about 55% of their annual production. For Canada the figure is around 68%. These figures are not that far apart.

I believe that there is more than enough exporting going on for the US price to be a good proxy for the world price. Besides which, it's not like there is some kind of two price system going on down south, the domestic market has to compete with the export market.

One should also consider absolute tonnage being exported as well. Again over the last ten years on average the US exported 28.2 million tonnes vs Canada's 15.7 million. If the assumption is that export markets are that much lower than the North American domestic ones then the greater amount of tonnage exported should have dragged the US price lower. But it didn't.

Having said that if there are some more credible statistics than the USDA's I'm certainly open to taking a look at them. Accuracy is very important to me in all of this and we need the best information that's out there to base our decisions on.