Why is the CWB not meeting our needs???

[TOM4CWB]

Charlie,

As you know, the CWB study submitted to the ITC said;

"Wheat prices around the world are established through negotiated sales between commercial suppliers, including both private grain merchants and STEs [State Trading Enterprises such as the CWB], and buyers. Many times, such prices are linked to spot prices on grain exchanges, such as the MGE [Minneapolis Grain Exchange], simply because these organizations efficiently assimilate and reflect information bearing on market fundamentals such as crop production levels, weather, and so on."

"As in any essentially competitive market, as a general proposition, price trends are determined by the broad balance of supply and demand... Although prices may be negotiated individually, buyers have no reason to agree to pay more than the "market" price…"

Now the CWB says there is no reason why they should ask less than the "market price".

They are not reflecting practical reality when the CWB says this.

1. The CWB price discriminates the prices it pays grain producers, as this institution will naturally try to have the easiest product to sell produced. Further the buyers of Canadian wheat and barley will naturally request the highest quality at rock bottom prices. The CWB sales dept. will strive to meet these needs.

This will only be natural as the buyers are the people the CWB sales dept. talks to each day, and have personal relationships with!!!

2. The CWB is not directly financially responsible to "designated area" grain producers, other than for the initial price. Therefore the CWB considers any revenue above the initial price as a "profit" they created for grain producers.

Obviously "designated area" grain producers look at it in the opposite light, anything withheld in the pooling accounts is revenue owed from the market to grain producers.

3. The most contact the CWB sales dept. have with the 20% of “designated area” grain producers who produce 80% of the grain they sell, is in conflict situations and in the court system telling us they will put us in jail, if we don’t stop asking and trying to get higher prices for our wheat and barley!!!

Please tell me how to expect they respect us when it is known that they have a special room in the CWB with our pictures pinned up, so they can go each day and frown and shake their fingers at us and tell us what “bad” terrible people growers are for making the CWB sales dept’s job so difficult each day?


The lack of financial accountability the pooling accounts create allows the CWB great latitude to sell at less than market value. This is reflected in the fact that the CWB says the pools are to be saved at any and all costs!!!

It is clear to me the Ontario Wheat Board has not taken this approach. In Ontario, the grower is first, and grower flexibility is more important than the pooling accounts!!!

Much is made about how good the CWB sales dept. is at extracting a premium!

My question is how does the CWB know what a premium price is?

If the buyers buying "designated area" wheat and barley tell the CWB that they are asking too much, and really haggle and balk at the CWB price, is this an indication of a premium price?

I think NOT!!!

These buyers will always haggle and complain, no matter if the CWB gives them the moon on a silver platter!!!

Knowing true value comes from personal investment and knowledge of and in a specific product.

It also comes from knowing and respecting the needs and aspirations of the producers of the products being sold.

Please tell us where the CWB collects this info, and how this info is communicated back to the "designated area" grain producers?

When everyone is treated the "same" is anyone’s needs being met sufficiently?

We all have different needs, and the Canola marketing system accommodates all these needs, without even a complaint, and in an equitable manner!

Please tell me how many Canadian Canola growers have had their trucks taken, or been put in jail, for just trying to get a higher price for their own Canola, that they grew themselves?

You know the answer is not ONE!!!!!!!!

Please tell me how the CWB proposes to respect us the same way the Canola Marketing system does?

Does the CWB ask me when I need and plan to deliver my CWB grain?

Does the CWB ask me at what time of year I would like to sell my grain to them?

Why would the CWB end the PPO pricing options when I am still very unsure of both quality and quantity? Ontario certainly takes these needs of their wheat farmers and strives to meet them!!!

Is it not absurd to have to make a final decision today on how much I will sell through the PPO system?

Canola buyers are very fair if there is a good reason to cancel a basis contract, they do it with no problem, because they respect growers, and want our business next year!!!

Why is the CWB so slow at offering the pricing options year round, and the flexibility that the Ontario Wheat board does?

Is it because the CWB doesn’t have to meet our needs, so they won’t?

[charliep]

Good points Tom4cwb. I will leave for others to discuss at this point. I suspect we have others watching this site and this should provide some things to think about as they are harvesting this fall.

[chas]

Hi Tom and Charliep: I'am finally back from a long crop tour to Radville Sask and back to Camrose. We look like the garden of Eden compared to the middle part of Sask. From Kerrobert to Swift Current it looks real bad with drought and from just North of Regina to Saskatoon is not good. South of Regina looks fair to good with some places with to much rain. Wilkie Sask West into Alberta looks average to very good. Here at Camrose wheat is excellent barley average and canola and peas average to below average because of poor spring start.
Tom, I agree with your thoughts on the CWB. The CWB is a government agency that was formed by government to control wheat supply. It has created farmers who are uninformed marketers of wheat and barley. Its a lazys mans way to market his product and in alot of cases have led farmers to financial disaster because they failed to divestify into growing other products for sale. (such as different grades and varieties of wheat that the CWB has no or shows no interest in marketing to the world but does not allow an open market on). The lack of an open market keeps well informed farms growing what the CWB wants them to grow. I think we would be better off growing thinks that an open market would deside whether it makes money or not. We must be freer to grow what we want if the government control under the CWB does not want to subsidize the agricultural industry.
The WTO is a joke and for all the other political and bureaucratic incompetence that goes on, if there ever was a common sense agreement made with World TRade in agriculture 7/8 of these people would become unemployed. At least they wouldn't last ten minutes around my place with their indecision making abilities. Its time to open our markets up to the better informed farmer, governments do not need to be involved in every trans action in the wheat market. Lets let commodities and markets determine our success, (change one or the other for success).
But who am I, the dumb farmer Chas.

[ianben]

Hi Chas
Nice to hear from you.
Sounds like you had quite a trip.
I have not seen much of area you traveled.
Got as far east as Saskatoon from Calgary and west as far as Yorkton/Melville from Winnipeg.

Tom and I have been having a good debate on the future down in "CWB debunks myth it extracts a premium"

I would value the opinion of a dumb farmer like myself.
How are we going to make a difference??

Regards Ian

[TOM4CWB]

Chas,

Glad to see you are back!!

Our crop at Killam is just like yours, we feel very blessed that the dought missed us.

I think the really sad part of this situation is that if the CWB respected us grain producers like the Ontario Wheat Board does their wheat farmers, what a different world it would be!!!

Chas have you seen any diamond back worms eating your canola?

At Killam the Canola crops are just on the threshhold of spraying, but I would rather lose a couple of bushels an acre than kill all the good insects that will help me next year! Dapp is at this same state.

Choices Choices!!!!

I figure my first field of Canola at Killam will be ready to swath in about 10 days with normal heat! If the worms and hail stay away they will be very nice crops!

We will need until Sept 15th for most of our Sherwood Park crops, unless it turns really warm. Lots of moisture here, but Killam is getting "dry" compared to Sherwood Park!

This has been quite a year!!!

[chas]

Tom: No diamond back mothe worms. Checked five quarters last weedend and found 4 worms in the lavera stage takes 12 days to go from mothe to worm again. Doesn't look like it should be a problem here. We had a little hail on 400 acres of wheat but looks like damage will lonely be 5 to 10%. Peas should be ready to disicate on the 18-20th of Aug. Wheat and canola need three to four more weeks unless the weather is real good.
Ian: the answer to our problems are simple, keep governments at arms lenght with policy making and requlations. Cut out any form of subsidises what so every. If you want to farm you will find a way an a commodity that will make you a profit. We are no different than anyother family or small buisness. Let the free market really be a free market, it hasn,t been for half century or more now and its not working when it is manipulated by subsidises and far from correct supply estimates.
Hows that for dumb. Chas (Don't consider my spelling or my grammer on the dumb part).

[hsiemens]

For one, salespeople with high salaries and backs on their chairs don't have much motivation to be the best. As a farm journalist and sales trainer, we were always told that a news salesman can have a chair, but without a back. I recently asked Charlie Swanson, past president of Agricore and MPE whether the narrow-mindedness of directors kept the wheat board from better performance. While accusing me of loading the question, he admitted first, off the record, that yes, that's the case. On the record, he said both sides need to back off on ideology and do what's best for the producer. Getting back to selling, one insider told me several years ago, that it's a farce to think the CWB is a single desk system. He said that there are several desks within competing with one another. Sometimes so, that to keep ahead of the other, they would be willing to jeopardize the other, which would, in fact keep sales lower. With CWB critics before and changing in a hurry like Earl Geddes and Lorne Hehn, Ken Ritter when getting involved, makes me think that the marching order says, fit into the mold quickly and pick up your inflated cheque. Do I sound cynical, yes, but 'thems the facts.

[TOM4CWB]

Chas,

Glad to hear the worms are leaving you alone for the most part!

We do need a long open fall, that is for sure!

Hsiemens,

Glad to hear another perspective!

I hope the CWB can wake up and smell the coffee, I see the Ontario Board forgave all the people who broke it's monopoly rules last year!

Isn't it about time the CWB forgave the farmers from four years ago?

Wouldn't this show good faith on the part of the CWB that they now understand there is a problem, and will actually do something constructive to fix it, and get to the stage of rebuilding trust?

I hope the new CWB appointed director MS. DUPONT can bring some of this rebuilding perspective to the CWB table! She certainly has the background and knowledge to help this happen if she tries, but will the rest of the think alike directors get it and allow progress?

[charliep]

Hi Harry - It has been a while since I have chatted with you.

I try to stay out of the CWB debate but sometimes I like to step and talk about proecess/help people see the inner working. Your comments about the sales/competition within provide a good opportunity to talk about the CWB sales process.

The basics of the CWB sales department process is their sales plan. The sales plan trys to match the wheat being produced within western Canada with the transportation/logistics constraints. The other part of the sales plan is a list of world and domestic customers (down to the mill level) who require the type of grain we produce. These customers are then rated by the price they would pay for the grain relative to other potential customers. The customers are then rated with the highest priced/more strategic customers getting the highest priority.

The end result is a sales that everyone in the sales department and logistics areas is aware of. Within the parameters of the plan, the merchants responsible for the different areas are able to make sales decisions (no different than the process in a private grain company). The plan is under constant review as situations change/new opportunities present themselves. The process is very tightly controlled by the executive director of the sales department- sales have to be consistent with the plan or they don't go/there is accountability to the merchant.

This is a really quick description given most meeting room participants are busy. Hopefully it will be picked up again this winter. Thanks for your comments in the other areas.

[TOM4CWB]

Charlie,

Is it possible that other grain merchants besides the CWB is capable of rating sales and customers and combining to acheive the maximum?

As a seller, is it possible that even I will go through this process?

If I have learnt the CWB is one of my "lower price markets" that I am trying to avoid, with the monopoly, how do I get around dealing with them?

Now when my other buyers know I will go to jail if I try to get more from my product than the CWB will pay me, why would they pay a premium to the CWB? They don't even have to pay me a premium, all they have to do is be nicer to me than the CWB, and presto they get the product!

Please tell me how being brought down to a low average helps anyone in the system?

I have watched the American grain companies sell grain, and it seems to me they have a much easier time extracting more from the buyer, simply because they honestly tell them what they must pay to get the grain from the farmer, and if it is at all reasonable the buyer will pay the price if they need the product!

How can the CWB do this when everyone knows they have a monopoly, and will put their grain producers in jail for trying to get more rather than competing and paying more than other grain merchants for the product?

Isn't it clear if the grain buyer is an expert at buying, that they can easily call the CWB's bluff, with no penalty?

If the buyer is dealing with a multi-national, Is it not likely that these well connected organisations will more easily know when a buyer is bluffing, plus they have costs that are fixed and can't lose money or the fellow sellng the grain will be fired? Where is this kind of life and death accountability in the CWB sales system, please show me!

[TOM4CWB]

Charlie and hsiemens,

What is the legislative mandate of the CWB?

The In MJ Farms, (Jake Heoppner’s legal challenge to the CWB) the Canadian Courts ruled that the CWB “had no duty of care” to the “designated area” to maximize grain producer’s returns. The CWB Lawyers and staff are well aware of this legal president.

The CWB Act is obviously therefore useless as protection for “designated area” grain producers to assure a reasonable job is being done with the hard earned grain they produce.

It is further obvious that the Canadian Government has no intention of changing the CWB Act to place “duty of care” upon the CWB to maximize “designated area” grain producer’s returns from the sale of wheat and barley in interprovincial and international markets. With the drought in Ontario, what better "Canadian" institution than the CWB to insure low cost feed stocks to the industrialized supply managed Agriculture? Milk producers are now boasting about how cheap Canadian milk is.

On what other farmer's back?

US corn producers that must compete with cheap "designated area" feed barley and feed wheat are hurt just like this "designated area" slave!

And these effects aren't just in my mind, the George Morris center, and the Western Grain Marketing Pannel both sponsored by the Canadian Governemt itself state these absurd facts!

Now, what are we “designated area” slaves supposed to interpret from these clear signals from the Canadian Government?

1.The Canadian Government sets the prices “designated area” slaves get for their Wheat and Barley.

2.The Canadian Government retains total legislative and administrative control over the CWB corporate board and its actions, right down to approving the CWB’s budget and lending practices.

3.The upcoming Auditor General’s CWB Audit is “at the pleasure” of the CWB Minister and nothing either the CWB board, OR the Minister Responsible for the CWB want to remain unpublished will become public information.

Now please show me where any accountability to this “designated area” slave occurs at the CWB?

Canada is a free and democratic nation?

ONLY IN JEAN CRETIEN’S AND RALPH GOODALE’S MINDS AND the minds of other good Canadian Communists!!!

This is I believe 2001 isn’t it;

I OBJECT!!! This SLAVE is free only to do what he is told to do with his WHEAT and BARLEY.

[charliep]

Tom4CWB

My purpose is as moderator is to stimulate discussion and present ideas. I am not trying to represent the CWB but I think it is important to make sure everyone is aware of how things work now without taking sides. The good or bad is for others to talk about.

You present some good ideas about CWB activities for farm managers to think about as they put the harvest in the bin. I will let others discuss later this fall.

Charlie P>

[hsiemens]

Charlie: I appreciate your position as moderator. Often rules, regulations, policy or whatever else may influence operations like CWB directors, ideals and actual practice differ. I'm only repeating how one person saw it working from within.

[TOM4CWB]

Charlie,

You know I understand that you worked at the CWB, and I do appreciate your insights into operations at 423 Main in Winnipeg!

If the CWB would not operate like a bull in a china shop, and carefully respect "designated area" grain producers right to decide who to sell their grain to, then this whole argument would be moot.

The Ontario Wheat Producers Marketing Board has the power to even be more high handed than the CWB, but they choose to respect their farmers freedom of choice.

If the CWB would respect us the same way as the OWPMB, then I would be able to accept in good faith the trust that we all need with each other to have business relationships fulfilling and honourable.

Until the CWB learns to respect the "designated area" grain producers they are supposed to be serving, we will continue to have a huge problem.

Am I asking to much, to be treated like an Ontario Wheat Producer, instead of a pawn from the outer reaches of nowhere?

[TOM4CWB]

Well, this is interesting discussion. Charlie laid out a pretty good description of the sales planning process, so not much need to expand there. I will stand up for the current CWB, and here goes.

I think, Tom, that many of your comments are anchored in a view of an organization that doesn't exist. The CWB fundamentally changed in 1998. There are elected farmer directors comprising 10 of the 15 positions on the Board. Frankly, I think they would agree with some of the statements you make and that's why you're seeing the changes that you do.

I do take some offense on your characterization of the sales staff. One very strong motivation is that many of these people come from farm backgrounds, are actively engaged in farming or have immediate families who farm. As one sales marketing manager put it to me once in describing his motivation, "I approach every sale thinking that I am selling my mom and dad's grain."

Regarding past critics turned supporters, I find it hard to believe that free thinknin people like Lorne Hehn, Earl Geddes and Ken Ritter are the types to be persuaded by " fat cheques". Especially not when these individuals could be earning fatter cheques in the private trade, and in some cases were doing so.

Perhaps they have come to the realization that there is an economic benefit for western Canadian farmers of operating the CWB.

The protrayal of a government institution doesn't fit anymore. This legislation is in place for the benefit of farmers. If they feel the organization needs to be changed, they will elect different Directors who will push for that change. Ultimately, farmers could call for a vote on adding or deleting crops from the mandate of the CWB, so could dismantle it through a democratic process if they collectively wished to.

Regarding the perfectly functioning canola market, I have heard many negative comments about the widely fluctuating basis that exists. Also about the marketability of some of the varieties, and their negative impacts on accessing high value markets.

Regarding the Ontario Wheat Producers Marketing Board, Tom be careful what you are asking for. I don't think you would want to give up the domestic feed market that exists in western Canada, for example. Ontarians are required to sell their feed quality grain to the OWPMB, whereas here there is 5-7 million tonne traded annually in the open domestic feed market in western Canada.

So there is a role for a critic in a democracy, and many of the comments to this site serve that valuable purpose. Farmers overall may be stronger speaking with a united voice on the key issues though.

Tom