adm

[boone]

Tom: It would seem to me that as important as anything is the "Intelligent Collective" or collective intelligence of all the players, and in this case it would be the day in and day out marketing of product against a posted price. Now often this phrase would be in the Oxymoron column, but let's assume it has some value, and herald it's advantages. Just as Canola is marketed everyday and right or wrong it also forms an average for the year on behalf of sellers, companies, the country (hence the economy) it has a way of managing risk. Not all knowing or all illinformed, just day in, day out. This to me is the most important goal for the CWB to pursue. I need this. My neighbours need this. My province and country need this. To leave it up to a single desk marketing team appears to attract folly. For them to market in this style on my behalf is folly. I can't even understand why they would want the thankless job, they can't win. We need to separate marketing by the producer and marketing of the physical grain. If we sell today against the posted price, every day, the board can either zero it off against the market by an equivalent futures trade, or if they have a premium price, lock that in against this exposed tonnage. Then both of our risk is minimized, and the premium should be permanent and exposed at year end in the final payments. I in no way want to get involved in the physical grain, excepting to deliver it to one of the boards agents. There still will be binding delivery contracts under this proposal. So it is not like the board will have to go begging for grain. That part should not change. The single desk has ample value to all of us if pursued in this regard.
Shortening the pools into contracted quarters may be necessary, to force orderly movement. But that is just a typical basis as now reflected in Canola or other open markets. In my opinion.

[Ration-Al]

Four companies control 75% of world rain trade which is up from 69% a few years ago. The trend is obvious.

The US has a record corn crop of 11.5 billion bushels. This exceeds the previous record by 1.2 billions bushels. The increase over last year is 40 million tonnes or 80% of the size of Canada's crop of the six major grains. We have a record world wheat crop of 611 million tonnes. We have a record world durum crop 39 million tonnes.

In spite of a 23% stocks to use ratio I don't see any of the importing countries trampling over each other to buy our grain. So there doesn't appear to be much competition there. ADM has increased its earnings by 70% based on high retail prices and low commodity prices. This doesn't look like competition either.

Black sea wheat (Ukraine) is trading for $115.00 USD per tonne. This is creating a Vancouver FOB price of $119 CDN. Two years ago the Ukraine, Khazakistan and Russia were selling the same wheat at $100.00 tonne. I suspect that at $115.00 per tonne Ukranian Farmers are making a good profit. A few months ago when the harvest began in the Ukraine black sea barley prices dropped from 155 USD per tonne to 83 USD per tonne. Since then they have recovered somewhat.

Competition seems to exist only between us farmers. I cannot understand why so many people are chanting this competition mantra.

We are competing with farmers in the Ukraine, Agrentina, Brazil, and Australia. We are competing against the pocket books of the governments of the United States and the European Union.

This type of competition is not good for my farm.

In spite of record high levels of production in the world we are at near record low stocks to use levels. That used to cause concern in importing countries. Not today. Today we have the internet. Anyone on earth can find out exactly how much wheat there is and more importantly where it is and how much it is selling for. There is no need for concern as long as there is one hundred more bushels of wheat on the shelf.

When we get down to the last two or three bushels the buyers will get excited and compete to buy the last bushel.

This is not about respecting each others property rights. This is not about the right to sell to the highest bidder. This is about farmers talking to farmers. Not just here in Canada. Farmers in all the countries of the world need to talk. We need to know that there is a fair price for our grain and that there are buyers who can and will pay that price when there is some disciplined selling. It won't happen any sooner!

[charliep]

Ration-Al

Just a comment on Ukrainian farmers and your comment they are making money. The fact of the matter is they are not with many of the same problems Canadians farmers face. To your problems, you can add no ability to own land, non existent credit (big farms pay 24 % interest minimum/smaller ones 36 to 48 % if they can get it with medium term/machinery loans not available), old equipment, etc. There is no government support of any kind with they regulatory drag even a more negative factor on decisions/profitability than ours.

The comment is the lowest cost/make effective way to profitability in the Ukraine will be improvements in marketing skills. This will be the driver for other changes in their system. That will start with improving price signals/reducing system costs for commodities. The real bang for the buck will come with getting into more specialized value based crops. A lot of pain to go before they get here.

Another fact I encourage everyone to look at is a globe. The Black Sea gives the Ukraine access to a significant portion of the major grain importing regions of the world. Western Canada's disadvantage is our production is at least 800 plus miles from the ocean and we are still not at a customers destination.

The question in my mind if the facts presented in this thread are true, what should farmers in western Canada be doing differently. Do we change the world or do we change ourselves?

[TOM4CWB]

RationAL;

All those words... do not match what happens on my farm.

I grow IP Canola, am given a profitable price.

IP wheat with intrinsic special qualities can obtain simular premiums.

We will only create wealth, when we strive to create specialty market grain with the farm gate clearly focused in our minds.

We can do better, excuses are not helpful, we have no choice but to do better.

Working for grain co's, railways, and shipping lines is not the future my farm can trust in or depend upon to create a profit. Yet the CWB is bound, and uses the excuse that grain co's, railways, and ships are fixed costs.

We can innovate, create value, and create wealth for our farms and communities... if we are not greedy and know our costs.

The bulk commodity business is not a profit centre for my farm or community. This is my choice, and opportunity. The CWB MUST adapt to this new reality.

Can present CWB leadership seriously show a plan to create specialty products with farm gate based initiatives that create true wealth?

We have the opportunity to take a small pie... and grow it into a large pie. Are we up to the challenge?

[Ration-Al]

I am sorry Tom,

When you post here all I hear is "BlahBlahBlahBlahBlahBlahBlahBlahBlahBlahBlahBlahB lahBlahBlahBlahBlahBlahBlahBlahBlahBlahBlahBlahBla hBlahBlah"

You need to take some type of remedial classes to help you with you english and your logic.

[chaffmeister]

Ration-Al:

Since you've opened the door to making personal suggestions, may I suggest you do a few things:

1. Read Tom's post again. (I read it only once and it was perfectly clear to me.) Then read yours again. Which one is more optimistic? Which one addresses issues with ideas that can work? Which one does nothing but perhaps makes the reader depressed just by reading it? Bottom line, which series of postings - Tom's or yours - do I believe contributes more?

I appreciate Tom's posting here - have for a number of years. Tom is unique in his undauntingly positive approach to his farm operation - no, his life and community - and I often see his approach as inspirational.

When Tom's posting are confusing or hard to follow (and yes, sometimes they are), this is often because he is far ahead of the curve and he assumes others are on the same page. Tom challenges the status quo and forces you to think.

I'm not a farmer but I've been in this industry for 25 years and let me say - we need more people like Tom who have a cooperative approach (where everyone wins as opposed to the current CWB environment where some people win more than others) and are willing to give more than what he expects to receive in return.

If I could vote in this CWB election, you can be sure that Mr. Ritter would not get my vote. Tom is constantly looking for ways to improve - from my experience, Mr. Ritter is not. In the name of improving the CWB, I find Mr. Ritter's approach nothing more than defensive, reflecting the siege mentality we all see at the CWB.

2. Finish what you start. On another thread we were discussing whether the CWB adds value - you were asked a question by Tom and challenged by me to respond to some "real" logic - and you have since disappeared. If the CWB adds value and you believe it to be so, then prove it.

Tom, 1 : Ration-Al, 0.

3. Take a "remedial" course on tact and diplomacy.

[Incognito]

Do they offer that course at CIGI, Chaff?

FYI: Voter apathy seems to be alive again this year. Turnout in Biggar, SK last night for Tom's, Ritter's and Strankman's debate - 14. Including a reporter from the W. Producer and CBC.

[Ration-Al]

Perhaps a seige mentality is what some of us are guilty of. If the facts depress you then perhaps you have to invent some sort of lala land scenario where you can keep your dreams alive.

I think that we need to look at the facts and live in the real world.

Canada produces large volumes of grain that is destined for the export market. The world population is at 6 billion and heading for 9 billion by some accounts. Vast numbers of those mouths will want basic sustenance at the lowest possible cost. The world will compete for those markets. Will Canada continue to play that game?

We could focus exclusively on the high end market where folks who demand IP or traceability will pay a premium. That will only take a very small percentage of our current productive capacity. What will we do with the rest of our acres and the farmers who are currenly living on that land?

I am sorry I do not see Tom as a visionary. I sometimes dream and I applaud Tom for that ability but it needs to be tempered in the near term with a generous dose of realism.

he

[TOM4CWB]

Incognito;

8 farmers at 7:30pm had entered the door at the Biggar Community Centre.

A CBC Reporter and then a younger Couple came in 20 minutes later...

It was quite a meeting!

Really good questions were asked in written form... and answered one by one... a very well run meeting... Hats off to the MNP chairman!

Do these forums even matter?

RationAL seems to think not... no constructive reason to change... but what about grain farmers?

Should grain farmers care?

If we hide in our bunkers... will anyone else in the world care? I think not.

Yet the bunker mentality is where most farmers have retreated to... sadly for the democratic process.

A people without a vision will perish.

It is leadership that must push the vision... of what is constructive and a real opportunity, and practically make a way possible for others to prosper.

Thanks for the words of kindness Chaffmeister... it perked me up... the words of RationAL are hard to swallow... but people somewhere are echoing him in his vision.

Where do we want to go?

Is Western Canada hopeless?

I for one think not.

After a trip to Nipawin SK. to deliver 40mt our HEAR (specialty canola), I attended the CWB Forum.

I am thankful for those of vision who built the Canola crushing plants in western Canada. ADM is one operator Bunge is another now. They add value in our communities... and pay profitable farm gate prices!

A Vision fulfilled (in the canola industry)RationAL... one that allows my farm to remain profitable and upgrade equipment.

Cheers to those of vision who broke ground to make this possible.

Hope I can be of simular vision and service to western Canadian farmers in the future!

[tower]

Do you understand the concept of loss leaders? As an example the grocery store, in competition with another, will make one product or more appealing by manipulating the price in order to pull in the customers. The customers then pay more for their groceries in total because the rest of the groceries are priced to cover the loss leaders.

ADM does not bring on processing in order that you can make a profit. Nor does the fact that the processing is there mean that it is responsible for the returns to farmers. There are a variety of reasons for canola pricing.

In the same way the CWB is not responsible for low grain prices. WE who are prepared to sell it at a loss are partially responsible.

[crusher]

TOM4CWB,

I admire your passion for the agriculture industry and your constant attempts to move the industry forward, I don't have near the energy!
Good luck in your battle against the chairman of the board. I read in his Western Producer bio his farm is one third summerfallow, kinda lives in a different world - with different viewpoints.
ps - I might have to eat my words, we could be combining again soon, how about you?

[TOM4CWB]

Crusher;

Thanks!

Soon maybe finish off the last of double flat barley... got the beans off last Friday Dry!

On my trip to Nipawin... was surprised to see how much flax has been harvested recently!

Looks like next week could see many farmers finish off most harvest... if we can get a few more warm dry days!

Tower... look for opportunities... they are there for those who search them out!

Marketing is hard work I know... but can be just as fulfilling as any other part of our business... and is the key to a profitable farm!

Our IP Canola is not a lost leader... it is an opportunity to grow healthy products that people appreciate and pay a premium for!

This is a positive for all involved... faith, in our family and community;

hope that next year can bring prosperity;

And the love of being creative... growing a healthy crop that contributes to healthy lives and spirits...

This is the essence of a sucsessful farm!

[chaffmeister]

Ration-Al:

I can’t follow your logic when you say: “…world population is at 6 billion and heading for 9…”; “…vast numbers…will want basic sustenance at the lowest possible cost…”; “Will Canada continue to play that game?”; “What will we do…?”

You’re kidding, right? You’ve painted a scenario where demand for food outstrips the current (and projected) ability to supply. I’ll tell you what you’ll do – even as competition grows via production increases around the globe, you will sell every pound of grain you can produce for much higher prices as the world strives to survive. (Let’s not argue about how much the world can produce or who will be able to pay for it, etc – I’m sure that’s not where you were aiming anyway.)

In an earlier posting you said “When we get down to the last two or three bushels the buyers will get excited and compete to buy the last bushel”, I suppose to explain your theory of what needs to be done to get prices higher. But here in your latest posting you paint the scenario where there is demand for more wheat than what is likely going to be produced – and you wonder what we will do?

Is this your idea of “a generous dose of realism”? Or simply your version of la-la land.

For you to present your “reality” and then suggest that Tom’s ideas are just dreams that don’t come with a dose of realism, indicates quite strongly that your “reality” is quite different than what the rest of us see (well, some of us).

And what was the purpose of asking the question anyway? I didn’t see any solutions or positive ideas, without which this is just more fear mongering. I think I get it now – you’re hoping to make those who read your postings think that they are helpless and the situation is hopeless. That way, they will see the CWB as a white knight, there to protect hapless farmer-souls from the clutches of those evil multi-nationals and other vagaries of the world. Even when the world is banging on your door willing to pay almost anything for that last bushel of wheat, the CWB will be there to make sure it’s sold in an orderly fashion.

[Ration-Al]

Chaffmeister,

You are right. I was jumping ahead of myself. When the world population rises to 9 billion the demand will probably outstrip supply and I hope that all of the farmers in the world become millionaires.

Actually that will probably not happen as the world would see that as being patently unfair and governments will intervene. Farmers seem to be the last profession on earth that the would be allowed to make obscene profits. It is ok for doctors, lawyers, and other professionals. It is ok for unionized trades to make $25 or even $50.00 per hour. But as soon as farmers want a fair price for their labors the headlines start to read, "Farmers Cheat World of Cheap Bread" or "General public is being cheated of the bounty of nature.....hoarding the world's grain."

The point I was trying to make is that regardless of whether we have 6 million people or 9 million people there will be vast numbers of people who can ill afford the costs associated with high value commmodities. They will just need their daily caloric intake to survive.

Even today with IP programs like Warburtons and Navigator, hard white wheat and the newer varieties of milling quality winter wheat it is difficult to extract the premiums from the market place to incent the producers to participate. Certainly the Warburtons contracts are a success but I have spoken to many farmers who have looked at the premiums and consider them insufficient for all the additional work and costs.

[charliep]

Just a comment that farmers do not know what the premiums are. Through the pooling system, revenue from all sales (including IP contracts) are deposited in the CWB overall pool accounts.

The signal the farmer gets is initial payments, any adjustments and the final plus any premium for the IP. The IP premiums are established well before sales are made (including IP ones I suspect unless the CWB negotiates these premiums with customers in better basis in the spring).

My concern in these contracts do not receive true price signals for these contracts. For all people outside the CWB sales department know, actual premiums paid by the market for IP wheats could be bumping up pool returns and distributed to all farmers. Similarly, any discounts to establish for new wheats may also be born by the overall pool. Give the producer pricing options are tied to the CWB pools, they suffer the same problems.

Is there a commitment by the CWB to ensure the pool returns to IP crops accurately reflect the premiums/discounts actually paid for these crops in the market place? How would a farmer who grew an IP crop know they have been credited this benefit in their total payments?