If the single desk is so effective - why is the CWB not using it domestically for feed barley and fe

[craig]

Agstar number of buyers and sellers is not what determines price. It is supply and demand. If you followed your argument through you could suggest that there are also many less sellers now because there are less farmers all the time. The CWB cannot extract so called premiums out of the domestic market becase buyers can just go across the line. In today's export market you can also build the same case. I would suggest that this what we are seeing in the world market right now. Lots of customers are quite prepared to subsitute lower grades of wheat because in a high priced market they cannot afford those price premiums. Sadly the board tries to maintain historic price spreads and not pay back producers of CPS and winter wheat what the market place reflects.

[Braveheart]

I tend to think that market theory dictates that price is dependent on the AMOUNT of a commodity available in ratio to level of demand, not necessarily the number of sellers. Economics 101 would teach that as supply decreases prices rise to ration supply. Of course the opposite is true if supply increases. The number of buyers and sellers would have an effect if there was only one of one or the other.

Herein lies the ultimate weakness of your argument Agstar. The CWB is only a single desk seller from western Canada. The don't have a single desk for the world or even the rest of Canada. Wheat and barley can and does originate elsewhere in the world. So ultimately the CWB is merely a price taker and you can see that rather than a single desk seller, really, the CWB is merely a single desk buyer.

[chaffmeister]

Agstar, you are confusing Economic Theory and Competition Theory. Reread Craig and Braveheart's last postings - they explain the relevant economics quite nicely.

When you start talking about the impact of the number of players involved in a market, you're talking Competition Theory. An atomistic market - many buyers and sellers - is best for efficiency and price transparency. At either end of the spectrum is monopoly and monopsony. As a market gets further away from atomistic and closer to either of the "mono's", it will continue to work efficiently over a broad range of scenarios until you get to a point where there is concentration of market power among one or more players.

Competition regulators use competition measurements such as the C4 index - a measure of market concentration among the 4 largest players. I have seen situations where the C4 was 100% - that is there were only 4 players on one side of the market - yet the regulators were not concerned because each was about the same size (no one was dominant) and there were no signs of artificial pricing or predatory actions among them. In other words, they competed.

So Agstar, you see, it's not linear. Simply moving to fewer and larger players does not in itself mean the market is working less and less well. You may be right about the concentration and market dominance in the hog industry, but last time I looked there were an awful lot of feed barley buyers out there - feed lots, feed mills, hog barns.

[Braveheart]

Chaffmeister, what an excellent explanation, and completely relevant to this discussion. That is the kind of experience and knowledge a CWB director should have. Would you like to have your name put forward as a nominee for the vacant appointed position?

[chaffmeister]

"Go ahead. Make my day."

[Incognito]

That would be great. Then we would have 2 CW Borg Directors and 1 CW Board Director posting in Agriville.

I suggest you hold off for a bit and mo money. The Queen Borg's job will be vacant shortly...