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To contract or not?

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    To contract or not?

    I once read that doing nothing was a marketing tool. It tells the buyers that you aren't satisfied with their price. I think that a lot of us have crop insurance money coming in to live on and have some decent HRS that will probably go to the board. I say make them pay through the nose. The whole world is short on milling wheat right now. Don't put it all on the "A". Make them sweat a little and hold as much back as you can. Any thoughts?

    #2
    I second that motion.

    Comment


      #3
      Rosco for CWB Director!!!!!!!!!!!!!

      Comment


        #4
        Rosco;

        I am afraid we are digging ourselves a very big whole.

        CWRS at over $8.00/bu should be a sell in the real world... and I know we aren't able to get to the market...

        Now when millions of tonnes of wheat EXTRA get grown in the next year... from nontraditional suppliers ...

        How long will it take us to dig out of the next humungous surplus that is bound to be created...??? 10years???

        We will be hurting those we are supposed to have a close relationship with... OUR customers!

        And the CWB staffers and directors could care less... they will ALL BE PAID VERY WELL ALL WINTER TO SIT AND WATCH US.

        There is no question that the present system of contracting really stinks...

        But how do we meet our customers needs... and overcome the CWB?

        Refuse to contract, but offer grain to customers... only ... on a one to one basis... to create a personal relationship on the other side of the CWB wall?

        Comment


          #5
          Did the CWB presell at lower prices?

          If so how much?

          Did the CWB take a licken going short wheat in Chicago, Minniapolis and KC?

          These are all valid questions which the CWB will never awnswer with factual documentation. Oh they will awnswer the questions with statements of indignation for those who ask, they will awnswer with rhetoric, they will blither and blather about commercial sensitivity. But reality is we're not going to know for sure until Jan 2004.

          Transplant the word canola for wheat and suppose this professional third party marketer sold 85% of a farmers production in May and the farmer wasn't told about it and when he finally inquired about it his questions were balked at? How many of you experts would think that would be acceptable??

          The advise would be to never deal with those people again and the farmer would be thought of as an idiot for entering into an arrangement like that wouldn't he??

          Why is wheat and malt barley so different???

          Should we sell our cash crops like canola for a unspecified price? Which one of you advisors would think that's prudent???

          Why would any advisor suggest farmers do just that with wheat and malt barley???

          It makes no sense.


          Tell the CWB to stick they're contracts someplace warm,dark and moist.


          The maddess ends only when farmers refuse to deal with the CWB, and that starts by not signing A series contracts.

          Comment


            #6
            Perfect. And tell your neighbor that you're not contracting.

            Parsley

            Comment


              #7
              TOM4CWB;
              Digging ourselves a big hole? I still say opportunity to cash in. You want to sell your HRS at $5 to keep Japan and the states happy, go ahead. I'll wait for 7$. Yes, the whole world is going to shift acres to wheat and out of something else, such as canola, peas, or feed grain. Canada's wheat crop is small and of poor quality. Our traditional customers are going to be shopping elsewhere as it is. We're short and thats that. If the board can't fill obligations then they will have to buy from someone else to fill the contracts.

              Comment


                #8
                Rosco,

                It is your decision, so you should be the one to make the decision.

                I am simply stating the obvious consequences to holding supplies off the market, the long term result.

                The same thing is happening in Alberta with hay right now. AS more and more supply fills the limited market, at some point surplus will drive the price right back down. Market arbitage is an amazing thing to watch happen, as liquid assets flow into profitable products, and create supply at an unbelievable rate.

                As the old saying goes;

                "High prices fix High prices"

                Comment


                  #9
                  TOM4CWB
                  Yes, high prices do fix high prices. The trick is to sell before the buyer tries to find a lower cost alternative. The high prices won't last forever. As for hay, the price will eventually be driven down by cattlemen finding those lower cost alternatives. This year it's silage and greenfeed. Or they will sell cattle when they can't pencil it out. So, what will the mills do when they feel the price of our HRS is too high? They can't go to many other sources, because the whole world is short. And there isn't a LCA you can use for flour. Wheat is the only raw material. So the price must eventually climb if we hold our wheat. And price of bakes goods will climb, and the consumer will pay. One thing that I have noticed this year. Every value-added ag-business in Canada is based on a cheap supply of grain, oilseeds and pulses. When the price goes up, they say they can't compete with the world. does this mean we as producers are destined by politcs to growing cheap resources for the value-adders?

                  Comment


                    #10
                    Rosco;

                    Now we get to a community based value adding industry, which we know is needed, just as our primary production is needed.

                    How do we exist, when it appears that there must always be a winner and a loser?

                    As a wise man said at a meeting last Monday, the value chain must be flat or horizontal, not up and down with primary production at the bottom of the value chain, with value adders at the top making the most money.

                    We need a healthy primary production AND healthy further processing industry.

                    How do we arrive at a "Fair" return for all partners in the production thru to consumer value chain?

                    I am amazed the Dairy sector sold there part of the manufacturing value chain, obviously there is more to dairy products than drumsticks, ice cream bars, and chocolate milk profits, much more.

                    What is a fair price for our products?

                    How can we become reliable suppliers that are paid a reasonable price for our products, long term.

                    To create wealth for our communities, and build an economy that is profitable for all, we as primary producers MUST connect with the other end of the value chain, and build trust relationships that will sustain all of us in the chain over the long term. Organic Producers have figured this part out.

                    How exactly we get through the CWB block is a chalenge, but marketing and building relationships is a chalenge for anyone in any industry.

                    Building a trust relationship with a grain product consumer now could produce big benefits when surpluses return down the road.


                    Does this make any sense Rosco?

                    Comment


                      #11
                      TOM4CWB;
                      You use organic farming as an example of value-adding where everyone wins. The reason is that they are placing a product on the shelf that is perceived to be better for you. The price is 95% hype and 5% product. We both grow common ag commodities that are inconsistant in quality from year to year. The average consumer won't pay a penny more than they have to for the necessities but have no qualms about paying the moon for things that they dream about. Shoppers bitch about paying $1.25 for eggs they need but will snap up $3 organic eggs because they "want" them. I wish consumers placed the same value on having a full stomach as they did on having a full size SUV. You say the CWB is to blame for depressed grain prices. Maybe it's the consumer who has never been the least bit hungry.

                      Comment


                        #12
                        Rosco;

                        It is amazing what people will do for the privilege of growing food.

                        The CWB is one part in a big picture, that needs to be fine tuned and complementary to our marketing tool box, not be the sole marketer who knows it all, because they can't know what our needs are.

                        Every farm has different costs and profit potentials.

                        THerefore every farm needs a different marketing strategy.

                        We need marketing flexibility and transparency to insure we all use our limited resourses to the best of our abilities.

                        THis is the duty of a marketer who cares, to insure the creater of the products they sell are able to survive and prosper, so the marketer will have a continious supply into the future.

                        Then CWB with Barley and the lower value wheat products is NOT fulfilling this obligation!!!

                        And our customers know our system is failing badly, now what do we do about it???

                        Comment


                          #13
                          rosco,

                          I'll bet you went out and bought a fancy-cut rock that was priced, "95% hype and 5% product", and put it on the little woman'sfinger! A rock! Somebody did some good marketing to make you do that. But you had a choice in that you could have bought her something else "of value". A freezer full of meat. Or a rock-picker. Or a bin full of wheat.

                          Gets us back to what we think is valuable, doesn't it? If you want something to be valuable, first of all you have to take ownership of it. And then you have to make other people think it is valuable.

                          Parsley

                          Comment


                            #14
                            TOM4CWB;
                            yes it would be nice if the buyer was worried about the producer and his continued success. But I have noticed that the grain companies are more worried about shareholders and dividends than my return on investment. They want my product as cheap as they can get it, and it is up to me to hold out until I get my price.
                            You say the CWB is not getting you a good price on barley or feed wheat. The street price for feed barley is $4 and feed wheat is $5 at my bin. How much more do you want? I read that Canada bought feed wheat from russia and malt barley from Denmark. Why? My guess is that the buyers got it cheaper. Loyalty to Canadian suppliers will only last so many cents. If you want the freedom to sell to the world then you have to be prepared for the world to sell in your back yard too.
                            Parsley;
                            Yeah, I bought her a rock. The rock picker wouldn't have gone over too well! I expect you bought your wife a rock too. Both taken by the same sales pitch!
                            Now, I've got a few thousand bushels of produce that I've told my banker is valuable. In a global market-place competing with a few million other producers, how do I convince the buyer that mine is more valuable than Pablo's or Sven's?

                            Comment


                              #15
                              Parsley,

                              You tricked ole Rosco... you sneeky charmer you!!!

                              You must know all about those rocks...

                              The Deburs Diamond Monopoly, is what you were getting at?

                              Rosco;

                              Just take one look at what good malt barley is worth in the US, far more than what the CWB is paying now.

                              You can bet your bottom dollar that the malt barley being imported will cost far more than what the CWB is charging, if present value is included...


                              THIS is a disaster for the maltsters, no questions asked... ONLY farmers have the right to sell... so pick your time, and SMILE if you have any grain to sell!!!

                              Comment

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