Monday, October 18, 2010

CWB Elections: Those That Can Vote, Should Vote

There are farmers saying they won’t vote in the CWB elections because they don’t grow CWB crops.  They say that they really don’t care what the CWB does or doesn’t do because it doesn’t have anything to do with them. 

Well, it does.

Delivery of CWB grains is restricted by the CWB “calling” grain into the system – you’d like to deliver more but you can’t.  As most farm bills come due in the fall, farmers need to sell grain to pay the bills.  Since they can’t deliver enough CWB grains to pay the bills, they sell something else.

A friend once joked that he grew peas so that he could pay his durum production bills in the fall.  It’d be funny if it wasn’t true.  Between the low Initial Payment and 50% contract calls, there just isn’t the cash flow needed to cover the input costs. So peas or canola or some other crop carries the burden.

Canola is the big one – the big non-CWB crop that gets sold at harvest or shortly after to pay the bills.  The problem is that too much canola gets pushed into the system in the fall.  As canola stocks build in the primary elevator system to more than a million tonnes in most years, the basis can weaken by as much as $30/tonne (or more) – we’ve all seen it.  This is not elevator companies taking advantage of you because they know you need to sell - grain handlers use price to get farmers to slow down on deliveries and – at the same time – to get buyers to buy more (or attract price sensitive buyers, like Mexico).  Once the stocks in the elevators begin to get cleared up, the basis works its way back up to as much as even money to futures, as buyers look for prices that will now attract new deliveries into the system.

Feed barley is another big one.  I’ve already talked a few times about the current export feed barley program that is costing all feed barley producers – even those that don’t sell to the CWB – millions.

The CWB’s passive system of “inventory management” makes the whole system – for all crops – dysfunctional.  Whether they are manipulated, managed or free, markets provide signals and incentives to both buyers and sellers.  In western Canada, since they get the same price regardless of when they deliver, farmers have the incentive to deliver wheat early in the crop year (instead of holding it for later delivery); yet they can’t deliver any more than the CWB allows.  On the other hand, the canola market gives incentives (signals) to sell for delivery later in the year; yet many can’t as they need the cash now, not later.

When the CWB states it doesn’t distort markets, it’s wrong.  Among others, it distorts the markets for all the non-CWB crops grown in western Canada.  And it’s not to the benefit of the farmer.

Don’t think for a minute that because you don’t sell to the CWB that it doesn’t concern you.  It does.  If you’re a grain farmer, and even if you don’t sell grain to the CWB, your vote in the director’s election is important.


  1. Your "enlightened" views are merely a diversion from facts. There is no doubt that the cwb can do a better job. People can always do a better job. The Cwb needs to be held under scrutiny as does any organization that is working for us. They are not above reproach.
    The fact is this. The majority of voters in cwb elections support the single desk. They believe in it and see its advantages. Do they believe its perfect? No, but they see the alternative of fighting grain companies and countries to market our grain as an unwinnable battle. They aren't niave, simple minded yes men, as you would like to have people believe.
    I know many people who oppose the cwb that fit the definition of niave a lot better.
    Does it not make sense for farmers to work together to get a higher price for there product. Could you find anyone who would disagree with this statement? Yet you would suggest that farmers can do it better on thier own or as an induvidual marketing in a world market. I'm sorry but that seems hugely arrogant and misguided.
    There is definately some western canadian farmers who are very talented marketers. But if we believe that our product is high quality and desired around the world(which I see great evidence for) should we not take advantage of this and work together to get the highest price?Why let a grain company realize this marketing advantage?
    If we believe the wheat board is not doing the best for us then we need to elect people to the board who will do a better job at it. Not try to destroy it. Don't throw the cwb away over idealogical b s. Losing it will will give the advantage to massive, established, corporations who are very well positioned to take over the canadian wheat market. If you think you can get ahead of them then you are the one who is being niave. The american farmers are in the control of these corps, why do we want to follow ?

  2. What's naive is to think that CWB director elections are an accurate measurement for the support of the single desk. They're not. Tonnage and acres planted are what matters. Farmers all over Western Canada are growing less board crops all the time. Over the last 20 years the decline has been dramatic.

    In stark contrast look at Ontario and more recently Australia both of which have seen an impressive rise in wheat acres after they moved away from a single desk to a competitive system.

    There's nothing wrong with farmers working together. But if you have to put a gun against their heads to do it, it's just not going to work. And surprise, surprise in Western Canada it doesn't.


  4. Look at Australia, who's wheat price fell substantialy, as companies fought for export market share when the single desk was removed.

  5. Interesting, how would select a voting list based on acreage and tonnage?

  6. I'm one of those naive citizens, anon.

    And a farmer.

    I simply don't appreciate a legislative gun to my head when I pick out my business partners.

    Most business people don't.

    We just happen to like willing sellers and willing buyers.


    Like...ah... marriage.

    The CWB has no place in either buying or selling function because in my farmer's view, their only interest is:

    *** in guaranteeing high salaries for their employees, incremental raises, and increasing benefits;
    ***catering to the federal government's trade deficits;
    ***providing a stepping stone to ambitious politico-wanna be's;
    ***acting as a funding mamma for leftwing activities;
    ***and liberally splashing producers' money throughout the city of Winnipeg.

    With farmers' money

    In my humble opinion, anons.

    My very best, Parsley