Milling Oats vs Milling Wheat

[Vader]

parsley,

Can we both agree that Canada could use "45 million euro, 220 employees and 58 per cent of sales"?

That's the important part. How then, do we get more 'Made in Canada' products?

I do agree. How do you do it? You do a lot of hard work. You do a feasibility study. You do a market analysis. You learn the business. You put a business plan together. You put up some of your own hard earned cash and you ask others to do likewise based on a sound business model. And go out into the big bad world and do business.

Robin Hood Flour Mills is not afraid. They expanded their plant in Saskatoon. In fact the business was so attractive it was recently bought out by American Giant Smuckers.
http://www.smuckers.com/fc/imc/imc1.asp

Neither is Rogers Flour afraid to expand their flour milling in Western Canada

"Mill officials, guests attend Rogers' Canadian flour mill opening
World-grain.com | Apr 7, 2005
CHILLIWACK, BRITISH COLUMBIA, CANADA , Officials of Rogers Foods Ltd. and parent company Nisshin Flour Mills of Japan gathered Tuesday in Chilliwack to celebrate the opening of a new flour mill there."

So where is the problem?

Are you afraid to do business where others are succeeding parsley? Do you need some help. Do we need to slant the playing field in your favor before you are willing to play. Are you a special case? Go ask your local government for a tax break or a start up grant. Perhaps they will see the merit in giving you "special" status so you can compete with Nisshen Flour, Smuckers, ADM and ConAgra Foods.

Or...... you could accept the fact that the CWB has already levelled the playing field. You can actually buy your wheat or barley from the CWB for exactly the same price as Nisshen, Smuckers, ADM and ConAgra. You wouldn't find that to be the case in the US of A. In the US of A you have to be one of the giants before you have enough purchasing power to compete. That is why the big get bigger. You can never be big enough to capitalize on the economies of scale. Smuckers swallows Robin Hood. Perhaps ADM will swallow Smuckers. Perhaps Nisshen will swallow ADM. Who knows. It is a world of corporate consolidation. But then you knew that before I started my rant.

[Vader]

Here is smuckers version of the Robin Hood History book. It all started in Moose Jaw, Saskatchewan in 1909

http://www.robinhood.ca/rh.timeline.asp?lid=1

The Edwardian Era



"Men wore boater hats and spats, women wore floor-length dresses and crinolines. The first gene was discovered. A man reached the North Pole and another flew across the English Channel. 1909 was a year of industry and discovery, and Francis Atherton Bean, President of International Milling in Minneapolis, decided it was a fertile time to buy a mill in Moose Jaw, Canada."

I don't know how much money Francis Atherton Bean, President of International Milling in Minneapolis brought with him. It is somewhat ironic that Canada's most successful flour mill was actually started by an American.

[Vader]

Does anyone out there labor under the assumption that Canada has an effective Competition Bureau?

http://www.ic.gc.ca/cmb/welcomeic.nsf/0/175ca41dbad3d81285256612004d9062?OpenDocument

This is from February 1997. Reminds me about that childhood story about the 10 litte indians.......And then there was one.

"ADM is acquiring MLM wheat flour mills in Calgary, Port Colborne and two mills
in Montreal. ADM and MLM are the two largest wheat flour millers in Canada."

"Competition Bureau Will Request a Tribunal Consent Order with Respect to ADM's Acquisition of Flour Mills from Maple Leaf Mills Inc.
OTTAWA, February 28, 1997 — Konrad von Finckenstein, Q.C., Director of Investigation and Research under the Competition Act, today responded to the closing of the transaction that involved the acquisition by ADM Agri-Industries Limited (ADM) of Toronto of certain flour milling assets of Maple Leaf Mills Incorporated (MLM) of Mississauga. ADM is acquiring MLM wheat flour mills in Calgary, Port Colborne and two mills in Montreal. ADM and MLM are the two largest wheat flour millers in Canada.

The Director, with the agreement of ADM, will be filing an application for a Consent Order before the Competition Tribunal shortly, seeking the divestiture of the MLM Oak Street mill in Montreal and requiring certain supply obligations by ADM to the eventual purchaser of the Oak Street mill. These remedies are aimed at resolving the substantial lessening of competition in the supply of bulk hard wheat flour in Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland ("Quebec/Atlantic Canada") which would likely arise from the merger. The terms of the Consent Order are subject to approval by the Tribunal. Pending the filing of the application, the parties were permitted to proceed with the merger following the receipt of an undertaking from ADM to hold separate and apart from ADM the mill which is to be divested.

In the Director's view if the transaction were permitted to proceed as structured, ADM would likely be able to significantly raise prices for hard wheat flour in Quebec/Atlantic Canada and consumers in these locations would likely pay more for bread and other related bakery products.

In Ontario, the Director has concluded that the United States Milling Company in Buffalo would be a significant competitive presence in the foreseeable future. The Competition Bureau also did not find that the merger would substantially lessen or prevent competition in Western Canada in part due to planned or actual expansion by other flour mills in this market.

The Competition Bureau's review of the transaction involved the assistance of economic and industry experts and the cooperation of the parties. Information was also obtained from the flour milling industry, including Canadian bakers, Canadian and United States flour mills, associations and others related to the industry."

[parsley]

Vader,

You see, when I go out in the world with a new wht/blyproduct, or when Western farmer-companies go out into the world with their new w/b product, they know they have the CWB's monetary strike against them, yet you seem proud to say, "You can actually buy your wheat or barley from the CWB for exactly the same price as Nisshen, Smuckers, ADM and ConAgra"

Vader, it is my wheat! (Toyota's cars. IBM's computers).

Buying my wheat from the CWB eats up the profit potential. The investing potential. Organic farmers were paying $2.28/bu to own their own grain!(Don't give me the 'benefits of pooling' speech. Pooling was not effective, or the CWB wouldn't be abandoning it)

Organic pasta could have been be a vibrant auxillary to that proposed pasta plant that the CWB doomed. Potentially profitable? Yes. Risky? of course? But my risk.

What shut the door to the project? The CWB.

The organic industry, indeed pizza pops, would never have even 'got off the ground' if the investors, builders, and innovators, had your attitude that everything is hopeless. That Big Business will 'swallow us up'. That "They " are out to get us. That only YOUR planning has merit?

You imply only an elite few should pave the vision and path for the future. You are game to push and enforce your vision.

But herein lies the problem:

Your vision is not my vision, Vader.

Parsley

[TOM4CWB]

Vader;

Looks to me like the GOC is here to PROTECT the ADM's and Conagra's of the world with the CWB monopoly.

Any other paractical conclusion... NO.

A normal person would have to draw the same conclusion... IF the practical reality of industry buy-outs and allowances of anti-competitive actions by the grain industry.

Liberal actions make Mulroney look like a saint... if results of actions during governance periods are considered!

[Vader]

parsley,

what shut the door was the lack of a business plan that would convince investors to put their money into the project.

If you want to process your own wheat on your own farm and sell it locally there is an exemption. If you want to set up a commercial scale operation processing other farmers grain, you have to compete with other commercial operations. If you were purchasing grain cheaper than the other commercial operators there would be a trade challenge under NAFTA.

You seem to have missed my point earlier. In an unregulated environment you would find it hard to compete with the multi-nationals. The CWB prices grain to you at exactly the same level that it prices to the multi-national millers. You don't have to compete with them for sourcing your grain if you are a small miller. I would suggest that in this regard the CWB promotes value added processing for start-ups.

[parsley]

You seem to have missed my point earlier.

If I keep ownership of my wheat (and not have to buy it from the Board), it makes every thing you've said totally irrelevant.

1. The business plan becomes feasible.

2. I would not be purchasing cheaper than anyone, because I would not be purchasing; I'd be using my own grain.

3.NAFTA would not be contravened if I am not buying grain.

4.Thanks for losing sleep over how I can manage, but don't worry about how I can compete with the multi's, or how much I get for the old tomcat, or what salaries the kids are getting. I'm certain we'll get by. Might even have enough left over to buy you lunch.

5.Compete with the millers for sourcing my own grain? In fact, the CWB has even disallowed farmers from buying back their own grain.

Using a regulatory function to prompt me to surrender my property so that I may regain it again at a loss to me, certainly does not benefit me as a farmer; it only benefits Wheat Board staff, and their hired Liberal lobbyists.

Parsley

[silverback]

Ok Vader, clarification please.

If I build a flour mill or some other kind of business to process my own grain on my farm that is ok? I can then sell that grain to anyone I want? What if I turn it into some other product? Can I sell that product to someone else? What if the municipality does not allow such a structure to be built on my farmland? Can I build in town and use my grain there? What other CWB legal hurdles do I need to jump to do this?

[wmoebis]

I have had discussions with Asst. commissioners from the CGC regarding this. I was told that it is fine to process your own grain in your own mill and sell as flour, flakes or what have you. You can NOT mill others grain nor can you have your grain custom milled and sell it. You can have some of your grain custom milled for your own use.
As for the location of the mill this was not brought up in my conversation.

[parsley]

Silverback,

I can mill my own grain on my farm and sell it throughout Canada. It is non-Board grain.

But the CWB will not give me the license to export the flour.

Just like feed grain, the CWB's export prohibition policy is in contravention of NAFTA Article 309. Within Canada but not outside Canada.

The CWB purposefully breaks NAFTA rules.

I can only export flour that has been purchased/gone through the CWB

Once again, the CWB stops value-adding dead in it's tracks.

Parsley