Canadian Wheat Board

[TOM4CWB]

Nejar;

The Hard White wheat is a good case in point, and a conflict for the CWB.

CDN Hard White can easily replace CWRS in bread making, Ausie Hard White cannot do this.

But the CWB does not market our Hard WHite into bread markets I am told, to maintain the CWRS market I am told.

It is good to see the DPC come up $10/t in the last week, we are still short $15/t or the PRO is at least $10/t too high. At any rate making farmers sign up before quality is known is insane, and you know it Vader.

Still no comment VADER on the GOC initial CWB betrail of every grain farmer in western Canada.

I guess the minister will play the political game and increase initials when we go into the next federal election. SICK.

[Vader]

tom4cwb, I am not happy about low initials or low grain prices. Low initials are a function of the low grain prices and the GOC guarantees. When the GOC no longer has a financial interest in the CWB as a result of the WTO concession to give up the guarantees that will no longer be the case.

If you are unhappy with initial prices you can take a look at the EPO where you pick up the cost of guaranteeing a higher initial. You should take this very seriously since in the absence of GOC guarantees the EPO's will become much more of a fixture in doing business with the CWB.

I personally would like to see every CWB transaction done at a minimum 80% EPO. This would be less distortive for domestic pricing, would enhance farmers cash flow, and would eliminate the possibility of a deficit in the pool account.

The sun is shining (finally). Going combining today. Hopefully will not have time to be on Agri-ville for the next couple of weeks.

[nejar]

I was also wondering if the stories of the CWB low ballin the price of grain around the world in order to make sales were substantiated.
This seems to be one of the complaints from other trading partners. Any thoughts

[Vader]

Lentils started out yesterday at 17.3% moisture but got down to 13.9% by days end. Looks like a great forecast. Might actually get the rest of harvest done and not have to use the aeration fans.

nejar, I would guess that someone like you made up that rumor and 10 more like you will pat you on the back and say how right you are.

After 10 or 11 trade injury cases by the Americans they have not been able to provide one shred of evidence to support what you are suggesting. In fact after surveying their own mills in the US the Department of Commerce found that US mills paid more for Canadian Durum wheat than for US durum 59 out of 60 months over the period in question.

[silverback]

You see Nejar, the CWB is the best marketer of our grain as they always get the highest price - always.

Just ask Vader.

We need to stop asking so many questions and just roll over and go back to sleep for the next 50 years - again.

[Vader]

silverback, you are putting words in my mouth. I did not say always. But if you look at my previous post, there is hard evidence that at least in durum wheat into US mills it is rare for the CWB not to get a premium.

Think about gasoline. How often would you find that premium gas was being sold cheaper than unleaded. When the CWB has a premium product then the selling price will always have that premium attached to it. If you can compare apples to apples, ie., exactly the same quality specs, the same delivery position, the same finance package etc. etc. then I am sure that you would find very small premiums accruing to CWB sales. Perhaps the value is more on the flip-side in that the absence of the CWB would allow farmer to farmer competition to drive down prices especially in those high value markets where the single desk premium is greatest such as Japan.

Customers have told the CWB that they value the quality of the Canadian product but not as highly as the CWB values it. In fact what drives customers to pay a premium to the CWB is as much to do with the service as with the product. And that service is a package which includes Canada's variety registration system, the Canadian Grain Commission and even our pesticide management system. So again you see the value is not so much created by the CWB as it is preserved by orderly marketing. It is like the water runing through a Hydoelectric dam. Either with the dam or without the dam the water is going to run downstream (grain flowing to the market place). But with the dam in place you control the flow and generate a lot of power that would not be there otherwise. The CWB creates a resevoir of energy that enables farmers to have more market power through the orderly release of grain through its marketing system.

[silverback]

Are you saying the wheat board is in charge of the Grain Commission and the pesticide management agency? How good is the wheat board at assuring world wide customers of easy, prompt access to the grain they want? I believe that our transportation system is not efficient enough and constantly creates problems for our customers. If I need to buy something, I will sometimes pay a little more or buy something of lesser quality if I don't have to go through the hassle of a vendor who makes it difficult for me to get it home.

One more question Vader. You think the Wheat Board is the only thing we need in Western Canada. What would happen to the board if it only marketed 2/3 of what it does now? If the volumes of a crop year were cut by 1/3? I am guessing they would find a way to survive. Why then would it be wrong to compete to buy that 1/3 from an open market? If the board is so good at what they do there should be no reason to fear that scenario, everyone would sell through the board anyway, right?

[Vader]

No, silverback, I did not say that the board is in charge of the Grain Commission or the PRMA, I said that they form a package of services. And yes that package includes transportation which time and again has given us a black eye. That part of the package does not do us any great service and certainly causes our customers to want to consider alternate suppliers. The railroads and the west coast grain handlers are not "team players".

As far as handling 2/3 of the grain it would be the same as in my hydroelectric dam analogy, if 1/3 of the water is leaking away you don't generate nearly as much power.

People always ask why the board is afraid to compete. Fear is not the right description. The CWB's position is simply that competition is not good for farmers. Competition is good for the people who are buying the product. If we were not in an oversupply situation perhaps it would be different. If our customers were beating down our doors for the last scraps of grain in the bins then competition would drive prices up. Right now as the world produces the largest crops in the history of the planet competition drives prices down.

[nejar]

Vader
What gives the CWB the right to arbtrarily say that competition is not good for Western Canadian Farmers. You sounf like Pierre Trudeau.

[silverback]

Once again I stand in awe of the comments made by you Vader.

"Competition is not good for farmers". How utterly ridiculous that comment is. You are obviously saying that the grain companies are evil entities that are going to destroy the farmers of Western Canada, and the CWB is going to save us by controlling our lives and our grain. Right?

If this is the position of the CWB, why don't you put out a press release to all farmers clarifying your point?