Husky, What are we (and the CWB) going to do with them?

[TOM4CWB]

Vader;

On Friday I heard the Husky Ethanol presentation, Again.

700,000t of wheat of good quality; a year, will be needed.

The largest single buyer/consumer of "designated area" wheat and or barley.

Husky has almost unlimited capital funding, just spent $250m on the Minedeosa and Lloyd plants...


NOW

The CWB has an moral obligation to "maximise" our returns on these 2 plants... in an "orderly manner" and since the use of wheat for ethanol is no different than distilling, or brewing malt/beer...

That it goes in a person's car or stomach is not relevant to the CWB Act.

It is being consumed by humans... if that ever did matter... it is certainly not being drunk by our livestock.

The Ethanol exemption is CWB policy...

NOT mandated in the CWB Act specifically.

Now;

If the CWB Act is to be implemented to "maximise" "single desk" returns to all "designated area" wheat and barley growers...

Doesn't the CWB have an obligation to use the "single desk" "Orderly marketing" tool on Husky?

[Vader]

Well Tom, tell us what you think would be best. How much do you think that Husky should pay for the wheat they are buying?

[wmoebis]

I think it will be a good show for all to see what marketing outside the CWB will be like.

Will farmers hold out for more than the CWB offers for same grain/grade or will they sell for offered price? What will that price be? How will it be set? Who will set it buyer/seller?

Maybe farmers could start a cartel to control wheat sold to ethanol plants.

[TOM4CWB]

Vader;

That was certainly not the answer to the question I asked.

Great admission that the CWB "single desk" is a matter of convenience... not of the rule of fact & law.

Vader, we have missed the boat. The ruskies are loading large cargo's of high quality wheat... that will soon knock out the CWB "single desk" from premium Hard Red markets.

So, is your plan to ride the "single desk" pony into oblivion... and take generations of "designated area" farmers into the black hole with you?

Husky should pay a fair competitive price. When we have disposed of the "single desk" issue... I would expect that the CWB could certainly be the best most effective supplier to Husky.

Until then?

We will all lose big time... because a lazy "single desk"... without reason or enthusiasm... is our worst nightmare.

IS the CWB going to be part of the solution, or part of the problem?

[food4u]

Attended an ethanol meeting at Strongfield,Sk. on thursday(16th) and left the meeting with the impression that the CWB would not be involved in the pricing of grain for these ethanol plants because it is considered domestic market.

[agstar77]

There is no guarantee Husky will use wheat. They will use the cheapest grain they can. So you are competing against U.S. corn. That will set the price. This gets us back to the trade challenge on corn. How ironic!!

[charliep]

food4u

My assumption has been the ethanol plants mainly want CPS wheat. Is this what they were asking for? When will the plant open? What prices are they offering? Is Husky offering forward contracts (production and/or price)?

An additional 700,000 tonnes of demand will make things interesting. This will have an interesting impact both on seeding decisions this spring and pricing over the coming years. More reason for visible pricing around mid quality and feed wheats.

[Vader]

Tom, we have a "dual market" in feed wheat. Now to the best of my knowledge Husky did not even ask the CWB for a price for their 6-7 hundred thousand tonnes of grain. My understanding is that Agricore United has provided Husky with some type of supply arrangement.

Now why do you suppose that is? As one of the previous posts suggests Husky will be looking to acquire their feedstock at the lowest possible price. I would assume that Husky knows that the CWB mandate is to maximize revenues for producers. In an open competitive market why would Husky even consider buying grain from the CWB? This is how a "dual/open" market functions. The CWB is completely powerless to add value for producers when someone else is willing to bid lower.

[charliep]

Just curious as to how the CWB would price wheat into a ethanol plant? You highlighted farmer investment opportunities in the ethanol industry. Would the CWB price differently into a farmer owned facility versus one owned by other types of investers/a multi national? Would the ethanol plant be treated the same as members of the Canadian National Millers Association?

Perhaps the best thing for farmers would be to have the CWB move to cash pricing for CPS wheat to provide a viable pricing signal/marketing alternative to an ethanol plant. I think the expression from the movie "Jerry Maquire" was "SHOW ME THE MONEY".

Just out of curiousity, what wheat classes, grades and proteins will be applied to the Iraq sale?

[TOM4CWB]

Vader;

Your logic astounds me.

According to you US Millers would pay the lowest price on the planet for the wheat to supply their mills...

Instead US Millers pay the highest price; because they buy from a competitive market, and a CWB "dual market" at that!

The CWB obviously has a competitive advantage... in that it's cost of sales are less than any other grain buyer on the face of this planet.

Vader, feed wheat the CWB buys, is up to $1/bu less than open market price in the middle of SK. The CWB could clean our clocks... and shut us out in an instant from these Husky plants.

So have the Inland Terminals got a sweatheart deal with the CWB... to switch and cash in mega time on stock swaps Board to non-board feed wheat?

You guys.