Contracting and Grading of Malt

[Burbert]

So now I have to contact a malt guy/girl and suck up to him/her to sell malt barley, that is if it meets their high standards. All the minor details, such as quality are now out the window. If for instance, I were to buy a bottle of rum, to accompany my sample, I would stand a better chance of getting it selected, or perhaps include a $100 bill in the sample. Guess what it got selected. Or will the great comedian grain commission come to our rescue and still demand high/mighty standards, as in the past?

[gregpet]

Burbert, does this mean you only produce wheat and barley on your farm since the other types of crops are not under the CWB control? I honestly feel most people are over thinking a simple situation and take advantage of the opportunity that is in front of us.

[parsley]

PRESS RELEASE:

"Western Canadian Barley Farmers and Industry support Barley Choice

April 11, 2007, Airdrie, AB: - In Calgary today, the board members of the Western Barley Growers Association met with
Big Rock Brewery’s President Ed McNally;

Bob Sutton, Vice President - Grains and Logistics, RAHR Malting Canada Ltd.;

and Rod Green, an independent grain broker.

Discussions surrounded the announcement from the federal government to end the CWB’s monopoly on barley August 1 of this year.

Ed McNally, a long time supporter of marketing choice welcomes the new era of marketing choice.

“As Alberta’s leading independent brewer, I have supported our barley farmers and see nothing but advantages ahead for our barley farmers.”

Bob Sutton, RAHR Malting, whose facility is located at Alix, Alberta, has advocated greater interaction between his facility and farmers for a long time.

“Now we look forward to building stronger relations with farmers. By doing this with out going through the CWB, we can obtain high quality barley and assure producers an equitable return for their work producing it”.

Rod Green, Central Ag Marketing Ltd., a grain broker out of Airdrie, Alberta sees the opening of the CWB barley market to choice as a win-win for all those involved.

“The CWB has a strong reputation as a marketer and will remain a strong choice for farmers after August 1.

Yet more choice for producers, whether it be contracting directly with end users such as the Maltsters or perhaps exporting to the US or elsewhere, opens many new doors for producers to receive better returns to the farm gate”.

“We (the Western Barley Growers) have come a long way” states Jeff Nielsen, President WBGA.

“WBGA has, for 30 years now, advocated choice marketing allowing barley producers the right to access whatever markets they deem best.

Now with marketing choice arriving August 1, many new opportunities are just around the corner. With that we see more work being done in barley research, end use development and all along continuation of supplying our livestock sector with top quality barley”.

“WBGA welcome the support of our industry partners here today. We would like to thank Big Rock Brewery, RAHR Malting and Rod Green for their support of western Canadian barley farmers and look forward to all industry partners and farmers to build an even bigger and more prosperous barley future” concludes Nielsen.

For more information contact:

Jeff Nielsen President Phone: (403) 556-303

Tom Hewson Vice President
Langbank, SK
Phone: (306) 538-4572

Doug McBain Past President
Cremona, AB
Phone/Fax: (403) 637-3880"


Looks like the Western Barley growers are showing admirable leadership.

And so is industry!

Parsley

[nashty]

Since this is a moot point as we are not likely to see the purposed dual market enacted as of Aug 1, why not grow a malt variety and hedge your bets via a production contract with a floor price guarantee? The production contract specs I have seen are fairly standard to all industry players and shouldn't hold any surprises. In my mind we should use relationships we have established with line companies and malsters dictate where we market our barley this year. Chances of someone radically altering their approach at this stage in the game and pulling a fast one to entice malt growers to sign a production contract only to manipulate them in the end potentially would taint their name in years to come. Here are a few things I would consider in signing a production contract:
1)Have your had a good relationship in the past with the contracting company? The malsters value growers who consistently produce a quality product and deliver a representative version of what is selected.
2)What is the pricing history of the company in question? Are they consistently equal to the competition in return or do they offer more? Are there additional risks that are involved in this incremental reward?
3)Are there provisions for delivery and what are the rewards for the company not adhering to the contract delivery specs?
4)Are there any secondary clauses if your barley does not make malt? (is there a sale of feed barley clause, some line companies would like first crack at your malt and feed, likely not in your best interests)

The net per acre return in our area, assuming the latest PRO is realistic, (I am ducking now as I hear things being thrown) should make malt one of the best bets this year.

In summary, I say seed it, cross your fingers that Chuck S and his posse can get things organized in a hurry, and hope like hell we get a chance to lock in good values before the bubble bursts!

[charliep]

Apologize wd9 but I have to vent after a strange day.

1) Went to Phil Thomas Alberta canola industry and heard a presentation on the Canola Councils business plan for 15 MMT by 2015. Watched the industry work together to take on a challenge. I think the goal is achievable.

2) Got an email from U of S talking the inability to get a low phytate feed barley registered. Most people don't know or care about the issue but will be an environmental factor in the future.

3) Read my western producer when I got home and see the headlines (firms urge gradual barley change). The references to the outstanding malt barley contracts to domestic maltsters are not a surprise/know they are there but the question is details/values of the contracts. I assume (tongue in cheek) the maltsters paid the same $27/tonne premium for the privilege of managing their risk that a farmer gets discounted for signing a fixed price contract/hedging their price. If the prices are at good levels and the CWB has the support indicated in the plebiscite, the CWB should have no trouble competing in an open market.

4) To date, no one (icluding the CWB) have dealt with the issues wd9 and others have raised in this thread. I see no creativity or innovation suggested in CWB contracts or pricing programs. I don't even see points for discussion.

5) And you are right, Parsley. A good article. A least there is some forward thinking people in the industry.

[wd9]

6) The rotating rail strikes announcement. Sheesh.

[kamichel]

Burbert? Are people not banging on your door for malt contracts this year? They are banging on mine and I keep telling them I am not growing barley this year. Like they don't hear me, I am not growing barley. WD9 lets not just focus on American demand because the american demand is small unless it is 6 row that you grow. Here most grow 2 row and the market is in Asia and should be huge this year. Burburt why should these markets disappear in an open market?

[kamichel]

As for current contracts I see nothing wrong with them. Base prices, plump specs, protein, and germ. IF don't meat them then can go anywhere else with the barley, not tied into delivery of feed at a discount for instance. And still leaves open if one is under spec that can still get sample sellected for malt possible.
I think that on a contract emphasis should be put more on delivery dates also and more storage payments. Current storage is not enough. In my opinion malt must be cooled, turned one month after harvest, make sure cool in the spring. IF this is done then it will keep. The current CWB prices and storage do not pay for the cost of doing this. too much malt these days is going into large piles and left because no incentive to bin it.

[charliep]

Good points.

Still hope an august 1 decision with the opportunity to sell malt barley off the combine/prior to the Aussie crop. The decision won't be any easier mid winter or August 1, 2008 and will get even more blended with other questions like a wheat plebiscite or a federal election.

Also hope for better signals around a street malt program for an export sale and an identity preserved program (storage in the bin and direct delivery to a malt plant with all risk the farmers). They are different. Currently all intertwined in the pooling system (except for the VIP program).

[wedino]

Good points re: contracts with maltsters. I contracted with a malt co. last year, if I didn't meet spec with it, I was out. Contract called for shipping via producer cars (saved me elevator charges). The surprise for me was the $12/MT they charged me to unload the cars. $15.75/ac just to get my barley moved from the producer cars & into their malt house. Make sure you're aware of all the terms of the contract you sign.

[parsley]

Good advice wedino. Mentally walk through every step of loading/unloading and possible expenses. Ask yourself, "Who does this", and ask "Who pays"?

Notate every step. It makes for good business, no surprises and no hard feelings on either side.

The devil is in the details. Memorize that phrase.

Parsley

[Burbert]

The only guys banging on my door (phone calls) have been from clip board agents, claiming to represent private grain companies, looking to make deals, offering low/low prices to pick up grain in our yard and pay the trucking. Cow guys trying to access cheap feed as usual. Malt guys have suggested that we come to them and get contract, business as usual, offering the right of first refusal (wow what a concept), a special deal. Same old, same old, cheat and steal the farmer, after all he has to sell it or smell it right and is very stupid! Wants to dismantle his own marketing system and go it alone, eh? If we all stick together, we'll get it cheap, grain business in action ethics Fu@##@##@#@ all, volume economics, after all Canada is the bread basket of the world, remember that sh@#$##$$.

[AdamSmith]

Burbert,

If you really think it's all that bad, and you're not just trolling here, my advice,

Call Ritchie Brothers,

Then go visit, your nearest RV and marine dealership, get the best deal you can on a Motorhome and boat.

Retire and go fishing.

I think You'd enjoy life much more.

Life is too short to be miserable all the time.

[just_wondering]

AdamSmith
That's not being fair to Burburt there are many other auctioneers who he should call, and maybe he doesn't like fishing.
It would be his choice if he just went out and worked for someone who actually had a plan how to stay in business post Aug. 1/07 Then when he turned off the key at the end of the day he could just walk away.

[parsley]

April 5, 2007

The Canadian Grain Commission on behalf of the Barley Development Council and the Master Brewers Association of the Americas,is pleased to announce a joint conference, The Science and Joy of Canadian Barley and Beer.

It will take place at York the Hotel in Winnipeg from June 25 to 29, 2007.

http://www.grainscanada.gc.ca/newsroom/news_releases/2007/2007-04-05-e.htm