Chas - your ideas that relying on the open market is like gambling says a lot.
Please accept this as my view.
Gambling is leaving something to chance. Responding to market signals is not gambling. According to the dictionary, gambling is defined as:
1. To take a risk in the hope of gaining an advantage or a benefit.
2. To expose to hazard; risk.
3. An act or undertaking of uncertain outcome; a risk.
By these definitions, farming is a gamble. Allowing someone else to make marketing decisions for you is a gamble. To act on market signals in the open market is NOT a gamble - to properly use the market signals and marketing tools available is to avoid risk - not a gamble.
If you grow a crop like canola where you can manage your risk - and you simply sell it in the elevator driveway when you deliver it - you are gambling. You have left to chance an outcome that you could have influenced. (Gambling definition #3)
The CWB does not insulate you from risk. You could have a crop failure. You could get lousy yields and/or quality. The market price could drop before you or the CWB had a chance to sell.
If you grow CWB wheat you are gambling. (Definition #3)
A number of times the the CWB has ended a crop year with a deficit - the final return in the pool was lower than the initial. The Canadian taxpayer had to make up the difference. The CWB goofed.
Sometimes mistakes can be hidden. Like a couple of years ago when the final payment in barley was about $4.50 per tonne in the same year as interest earnings from credit sales (made years earlier) put about $17 per tonne into the barley pool. In other words, without the federal government paying interest on outstanding invoices from many years before, the barley pool would have been about $13 per tonne in the hole. They goofed.
I personally know of a situation where a trading company operating in Canada sold wheat to an offshore country. Since there are few secrets in the grain trade, the traders at the CWB knew the sale had been made. When the company went to buy the grain from the CWB, the CWB refused to give a competitive offer - they tried to hold his feet to the fire and extract a higher price than was warranted. The company turned around and bought wheat from Australia. The sale contract specified "optional origin" which means they could provide wheat from any country. The CWB traders thought that since this company was working out of Canada, they would need to provide Canadian wheat. They goofed.
Makes me wonder about all the transactions and decisions the CWB has made on farmers' behalf that were the wrong decision. The may have goofed and you don't even know it.
Knowing that the CWB decision makers are human, and at times they are making very large deals, and that they goof every now and then, who is taking the gamble?
Chas, you seem solid on your idea that "marketing agencies would probably average you a better price over the long haul". But there is no evidence of this - just your trust. Is this trust based on any concrete evidence that a marketing agency (CWB) does better for you? Or is it based on your mistrust of the open market?
How would your marketing agency be different than the CWB?
cm
Please accept this as my view.
Gambling is leaving something to chance. Responding to market signals is not gambling. According to the dictionary, gambling is defined as:
1. To take a risk in the hope of gaining an advantage or a benefit.
2. To expose to hazard; risk.
3. An act or undertaking of uncertain outcome; a risk.
By these definitions, farming is a gamble. Allowing someone else to make marketing decisions for you is a gamble. To act on market signals in the open market is NOT a gamble - to properly use the market signals and marketing tools available is to avoid risk - not a gamble.
If you grow a crop like canola where you can manage your risk - and you simply sell it in the elevator driveway when you deliver it - you are gambling. You have left to chance an outcome that you could have influenced. (Gambling definition #3)
The CWB does not insulate you from risk. You could have a crop failure. You could get lousy yields and/or quality. The market price could drop before you or the CWB had a chance to sell.
If you grow CWB wheat you are gambling. (Definition #3)
A number of times the the CWB has ended a crop year with a deficit - the final return in the pool was lower than the initial. The Canadian taxpayer had to make up the difference. The CWB goofed.
Sometimes mistakes can be hidden. Like a couple of years ago when the final payment in barley was about $4.50 per tonne in the same year as interest earnings from credit sales (made years earlier) put about $17 per tonne into the barley pool. In other words, without the federal government paying interest on outstanding invoices from many years before, the barley pool would have been about $13 per tonne in the hole. They goofed.
I personally know of a situation where a trading company operating in Canada sold wheat to an offshore country. Since there are few secrets in the grain trade, the traders at the CWB knew the sale had been made. When the company went to buy the grain from the CWB, the CWB refused to give a competitive offer - they tried to hold his feet to the fire and extract a higher price than was warranted. The company turned around and bought wheat from Australia. The sale contract specified "optional origin" which means they could provide wheat from any country. The CWB traders thought that since this company was working out of Canada, they would need to provide Canadian wheat. They goofed.
Makes me wonder about all the transactions and decisions the CWB has made on farmers' behalf that were the wrong decision. The may have goofed and you don't even know it.
Knowing that the CWB decision makers are human, and at times they are making very large deals, and that they goof every now and then, who is taking the gamble?
Chas, you seem solid on your idea that "marketing agencies would probably average you a better price over the long haul". But there is no evidence of this - just your trust. Is this trust based on any concrete evidence that a marketing agency (CWB) does better for you? Or is it based on your mistrust of the open market?
How would your marketing agency be different than the CWB?
cm
Comment