CWB Name Your Sources Challenge

[Fransisco]

What are you thinking with this?

<blockquote> <i>Wouldn't a better comparison be between the average pool price and the overall average of spot prices through the year? </i></blockquote>

That's true if you want to compare just two different averaging schemes. There are many more than that.

Andersons original comparison is technically correct, under an open market scenario a producer is free to sell at whatever point he chooses.

If he is a 100% seller it could be (though would be unlikely)at the top of the market.

The most likely scenario is waiting until the price is first above ones cost of production and then selling incrementally from there. The size of the increments varies from producer to producer.

Its competition and choice that leads producers to decide what exactly works best for them and when.

Which is exactly what they don't have right now.

Besides which you're getting off topic, remember we're looking for the sources of the info the CWB used.

[TOM4CWB]

Fransisco,

There was a massive drought in the Northern US. The drought started early...

75% contracted... if it was this way... it was only because they grew 40% of a normal crop... which doesn't excuse the CWB for selling our "designated area" crop early when they knew the Americans and Ausies were in trouble.

Exactly how much Malt was sold in the spring through FPC? anything at all?

Shouldn't have this been a "little hint" that growers in the "designated area" didn't think the prices were high enough for Malt Barley?

The Australian 06-07 pool prices (there are a number of pools) for Malt, Port Adelaide, is between $291-299.35/t. Grain Corp prices last week were $275/t.

From my Ausie Callum Downs Newsletter Feb 13/07
"ABB Barley Pools Since our last newsletter ABB have
closed their No. 1 pools and opened new No. 2 pools.
Apparently Max Venning has been quoted as saying at silo
meetings that ABB received 110,00t of barley in their pools
this year in SA. Shipping schedules indicate that this, and
any carryover from last year, will move relatively quickly.

ABB Current Gross Pool Estimates
With shipping due from Pt Giles, ABB
have been
contacting growers with warehoused barley at Pt Giles to
try and entice them to either transfer to the new pool or to
sell for cash. Growers are reluctant because it will mean
taking lower returns than what they decided to reject back
at harvest time.
ABB Current Gross Pool Estimates
No. 1 Pool No. 2 Pool
Feed $246 $229
Malt $338 $333-338
At their last update of returns, Gary Spiel from ABB
suggested that there was more upside on malting returns,
but the feed market is stabilising."

ABB at Port Adelaide, Malt 1 Pool 1, was offering $296.47/t

The CWB statements are far fetched, and ring hollow especially after we examine what Australian growers pool values are.

Most Australian States are exempt from the "single desk" on Malt barley... why has this Dual market system performed so much better than the CWB did with the "single desk???

On Ausie Durum, Balak/Kulpara San Remo; D1 AH Based San Remo terms: $261/t Feb 13/07.

[Fransisco]

Could it be that the 75% number means <b>maltsters<b/>, not <b>farmers<b/>? And is for a specific time frame, say a month or two after harvest?

I could see where an individual maltster might want to lock up that much product for a certain time frame or when seasonally there is not a lot of product around.

There is a world of difference between maltsters and farmers. Is this another example of the wheat board playing fast and loose with the numbers, hoping that no one will notice?

Since no one has listed a source, what else can we assume?

[TOM4CWB]

Fransisco,

To Quote Sir Thomas Moore...

"Under the Law Silence is agreement."

Didn't help him much... they chopped off his head anyway!

[charliep]

Likely not a fair question for participants of the chat room - only the CWB could answer this question. Its their number.

Someone gave me heck for even making the question relevant. You have to go a lot deeper into the full malt barley contracting system in the US malt industry (Coors and Anheuser Busch early contracts are at a substantial premium to the plain Jane malt barley price). At the end of the day, a willing buyer and seller made an agreement last spring. The agreement has likely been kept/product has been delivered and additional supplies over and above the contracted volumes are now being sold at higher prices. I will let someone explain why the price of malt payments (noting projected payments) and feed barley (paid at delivery) are the same in western Canada.

[Fransisco]

Charlie if someone gave you heck, then it was definitely a relevant question.

Hey they put the number out there, they should be able to back it up with a source and the proper context.

Maybe the number is real but only when taken in a very specific context. One that is different than the board is using. It wouldn't be the first time.

[charliep]

Maybe I should shake everyone up and ask how the targets are calculated on page 40 of the annual report. Are they done externally (Richard Gray)? Is it an internal measure? What due dilegence is done on the process/number? Is it only comparing prices on the day sales are made? Is timing of sales included? Is the $6 to $9/tonne premium shown for the CWB system offset by the costs of the CWB system to that manager?

I note most businesses (including government) have performance measures. A key element is they are understood internally by staff, among stakeholders and by business partners. A key part is to understand the process of how developed and from there, the ability to varify by outside sources.

[parsley]

charliep, you ought to know!

During coffe break, the CWB marketing department each get a daisy, and as they pull off each petal, it goes like this:

We love farmers
We love them not

Been having bad plucking luck.
Parsley