Pricing Versus Marketing

[chas]

Freebird welcome to the thread. Freedom at last! Freedom at last! Who is this CWB that is forcing you to deal with them. Do they not listen to the people. Are they determent to bankrupt us all to obtain their dictatorship goals in this country. Could we possibly trust Cargil, Louie Dreyfeus, AgrPro, Agricore or anyone else to market our grain with our profitablity in mind. Free can also stand for no money get the drift. If you don't like the market don't use it, grow rye or hay there great free market commmodities. You want to export your grain to the USA I suspect because of the nighe markets that show up from time to time. Even if the CWB allowed that to happen the market would disappear in a moment because someone or some company would fill it before you could start your truck. Besides some American is going to shoot you if he sees you to often filling his market. Thats why there are tariffs and the World Trade Organization to try and sort out the disputes that take years to even talk about them and then Governments are involved and then a whole bunch of people we don't understand want their view point heard and on and on until the farmer goes broke. The farm crisis has been a continuing problem for 152 years. Thousands of farmers and wantabe farmers have disappeared, was this because of the CWB or the open market. The open market tells me there is a over supply in this commodity or that one but I'am not forced to hold any grain in the bin. I still have the same buyers buying it for less money but the end product they are making still remains at the same high price. Where is that freedom money going. Theres a surplus when no one wants to buy my grain and I have to store it, that hasn't happen in 26 years that I have farmed. Freedom comes with a high price tag. What makes you think your in jail if you have to cooperate with the majority. Democracy is the worst possible form of government except for all of the rest.(Winston Churchill)
Tom4cwb & Parsley freedom is a frame of mind and your not app to ever get it.
Your old chicken herder: Chas

[TOM4CWB]

Chas,

In my rotations, I need wheat and barley to grow to have a sustainable farm in the long term.

I grow Canola whenever possible because it has enough volume that speculators and mutual funds make a liquid market, and I can make a profitable living growing this crop when I have this liquid vibrant market.

I have freedom to market with Canola and usually sell to all the major grain co's so I have competition.

During harvest, my trucks will be heading in three directions at the same time from the same field, and this way I know, and more important they know I know, if the particular grain co I am delivering to is grading my Canola fairly!

When the CWB gets to a competitive system where buyers come asking for my wheat, like they already asked for all my Canola, 3 months before I have even seeded it, then maybe we will get somewhere.

Chas if you are so unhappy with the open market system, which I remind you the CWB is a part of and must sell to, then why do you grow grain?

[freebird]

Chas, I would not have the cheek to try
to tell you who you should sell your
grain to, all I ask is that you extend
me the same courtesy.

fb

[freebird]

Chas, I would not have the cheek to try
to tell you who you should sell your
grain to, all I ask is that you extend
me the same courtesy.

fb

[chas]

Freebird and Tom4cwb you are both 40's years or younger and both are addicted to gambling and don't know it. The open market is putting your whole farm at risk and you want every body to gamble their farm, thats why so many farmers have lost it all. Just be because you boys are such miracle price getters. Just look around can you replace every farmer who isn't or don't want to be a stressful price getter when marketing acgencies would probably average you a better price over the long haul.
Firebird I don't intent to be cheeky but I did give you a choice to market your grain. You can't always have your way give alittle it will make you feel better. We can make a deal that suits us all.
Tom4cwb you can't see the big picture. Chas

[chaffmeister]

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

[ianben]

Hi all
This thread was supposed to be about other ways to influence markets, I think you are leting this CWB argument blind you to other options.

1 Wheat as a fuel?
One bushel equals cost to heat your home for one day.
Let me know your answer cm. We already know you are a wiz on the futures.

2 Better market reports?
CWB tells the whole truth. Surly this is not in our best interest. They at least should try to talk UP the market.
Buyers read these reports too.

3 Better promotion and advertising?
I found out wheat was a fuel from a JD magazine. How many of you found out from Ed Baker on this site.
Do CWB know yet???

These are all things which could be done today and might make more difference to our bottom line than who markets our grain.
Regards Ian

[chaffmeister]

1 Wheat as a fuel?
The stoves need to be sold first before we see any increase in the demand for wheat. So, who's selling the stoves? Is Ed asking us to sell them or to buy them?

2 Better market reports?
Ian writes "CWB tells the whole truth. Surly this is not in our best interest. They at least should try to talk UP the market."
The CWB is not going to influence the market by putting their own spin on market reports. One of the quickest ways to lose credibility is to put out bias reports. Buyers read a lot of reports as well as do their own research.

3 Better promotion and advertising?
I found out wheat was a fuel from a JD magazine. How many of you found out from Ed Baker on this site.
Do CWB know yet???

I knew about using grain or other biomass as fuel - I was not aware of the stove until Ed.

Sorry to be negative - this is just the way I see things.

cm

[chas]

Chaffmeister you have alot of information about the CWB dealings. Now tell me about all the grain companies and their dealings. You will not find that information and thats where the gamble comes in, are your getting a fair price. Remember the CWB in limited getting a higher price by the exsistance of the commodities market. We have to develop trust and that can be obtained by having farmers elected to the farmer controlled marketing agency. Private grain buyers are not allowing this to happen on their boards.
Read what Rockpile said on the Farmer Association Thread.
AND DON'T BELIEVE THAT THE COMMODITIES MARKET IS THE ONLY WAY TO DISCOVER PRICE. Use your thinker on how to develop another way to discover price that would cover the cost of production in downtown Saskatchwan. Keeping in mind that the picture on price is alot bigger then Canadian Farmers it takes in farmers world wide. Chas

[ianben]

Hi cm
Thanks for the reply. I respect your views.
I HAVE feedom to sell but don,t see it as an advantage and certainly not the solution.
When U.K. started to export wheat we set up B.C.E.British Cereal Exports to promote our produce because we thought CWB gave you an advantage.
Perhaps the grass is always greener.
I too knew wheat or any crop could be a fuel but it is the value of wheat as a fuel which suprises me.
I did not realise it was now worth MORE as a fuel than for food. Did you?
Or is this not so in Canada?
However with rising energy prices and the fossil fuel global warming issues.
how long will it be before it is.
I think we should be telling customers now! New customers more demand higher prices.
So what value do Ed's and JD's figures put on your wheat?
Have you ever sold for less like me?

Re Market reports you don't think they could be improved in ANY way???

Looking forward to your reply.

Regards Ian.

[TOM4CWB]

Ian,

Your wheat for fuel is an interesting concept, too bad the CWB has a "monopoly" and can force this use of wheat through the "single desk".

The only exemptions to CWB marketing is for the feeding of livestock.

That is right, check the CWB Act. Wheat and barley usage for anything else is against the law, if interprovincial or export sales are involved!

The CWB created their own illegal exemption for the ethanol industry, which is another reason that large plants will not set up in western Canada, which would depend on exporting their "wheat or barley products" the ethanol!

We are so good at recking ourselves aren't we?

[ianben]

Hi Tom
Could you give me some figures on the Canadian prices?
You know one bushel equals cost to heat house/day or 3tonnes equal 1000 litres oil.
Have you ever sold for less like me?

Regards Ian

[TOM4CWB]

Ian,

Without our Alberta gov subsidy, and net of the Federal 4 cent tax, diesel is worth about 42 cents a litre.

I guess that means $140.00/t. if it take 3 tonnes to make 1000 L.

I would expect my average selling price for human consumption wheat to be over $160/t.

Does this help?

[ianben]

Thanks Tom
I was begining to think this information was a trade secert.

I think this information helps a lot it might even be a solution.

I think we can use the price of feed wheat in this equation. Ed says any grade will do.
I presume your milling wheat prices are based on feed plus depending on quality.
Here they range from £3 for biscuit wheat to £20 for what we call milling 76kg/hl 250 Hagberg min. 13% protein.
I don't know how this compares with your prices in Canada,but if it is similar wheat in Alberta must be worth MORE now as fuel than food.

I know your wheat is some of the best in world. We eat only Warbuton's bread you can taste the sunshine!!!! It costs about 80p a loaf,the cheapest supermarket loaf is 30p,so you can charge for quality.

Perhaps we should check out these J.D. figures first,but wheat as a fuel looks a like the start of a PRACTICALsolution to me.

A green fuel will have a premium global warming Kyoto agreement all we have to do is market it.

A job for CWB WHILE you try to change it????

Those profits recentlyanounced by Shell
etc.truly were immoral,perhaps we can create some real competion.

What do you think?
Would these prices be the same im Sask. and Manitoba?

Regards Ian

[TOM4CWB]

Ian,

I guess part of our problem is that natural gas is piped into everyones house, and is really simple. Turn up the thermostat! Further gas has been much cheaper than heating fuel.

If anyone was really worried they could have hedged their gas last fall at "cheap" long term prices!

Sask and Manitoba I am told have a regulated market, and are still working with "cheap" gas costs.

I find it curious to consider burning wheat, as I find it difficult to beleive a net "green" benefit after fuel inputs to grow the crop are added up.

What is the net cost of energy to grow 60 lbs of wheat?