Old Crop PRO

[crusher]

Since contracting my wheat to the CWB last fall, on about 2,500 tonnes I've lost over $20,000 based on the board's PRO. With the current board marketing system, I was wondering if someone (Lee), would like to comment on some risk management strategies that I could have used to protect this value.

I was amused yesterday with the new PRO's coming out with the increases in wheat prices for new crop, and then they lowered the basis - Tom what's up with that?

Question - what's worse than a CWB marketer? The answer appears to be my mutual fund manager?

My only suggestion to farmers out there is GET EDUCATED and take responsibility for your farm. Make a marketing plan and stick with it. I've taken many courses and seen lots of info on marktet fundamentals but the key is to know the expenses and cash flows on your farm. If you make a decision stick with it and try to follow it up. Don't be swayed by the coffee shop or any other expert. For example I bought the Canadian Dollar this spring to protect my crop out in the field. When the dollar went up my broker suggested I raise my stop but I told him to just leave it - it was a hedge. We finally agreed to move it up to where I had bought in at 64.58. Sure enough last week it dips down to 64.55 and takes me out of the market. Now what do I do? I would have been a lot more comfortable just sticking with my original plan. I least I could say I did my best.

P.S. Fortunately for Tom and I, we farm in a sure crop area and have a lot less production risk than many others.

[TOM4CWB]

crusher,

I think the my old saying that nobody ever went broke making a profit must be put into action here!!!

If you made a profit on the 2500t of wheat, you still did allright!!!

I could have told you two months ago that the CWB was politicing on the PRO's and chances are good they are still not facing reality!!!

Weather might end up making me into a liar, but I would say chances are good that I will be closer to reality than they are.

PRO numbers have more to do with the FPC system, I strongly believe it is skuing the whole CWB system, plus they are desparate to buy acres and volume!!

What cheaper way to buy acres than through a PRO that means nothing especially on the old crop!!!

I think it stinks that the CWB did not maintain a more reasonable basis, especially with the risk we must take to commit to a CWB 2001-02 contract now!!

If I end up with feed wheat, this contract will be a albatros around my farms proverbial neck!!!

The CWB feed wheat discount on top of absurd low price to begin with is unforgivable!!!!

The Feed Barley FPC is a bad joke.

Anyone who took last years feed barley contract with the CWB should have learnt there lesson, now lets not make the same mistake too!!!!

This last PRO is proof that the CWB has been playing with our minds once again!!!

When will we learn that a low average pool price is not as good as a well thought out marketing plan that provides a profit for our farms!????