Timing critical for new CWB agreements


Grain growers take wait-and-see approach | CWB was ‘optimistic’ in estimating grain handling

The CWB continues to negotiate grain handling agreements with major grain companies, CWB officials said last week.

However, farmers and industry insiders say that with less than two months remaining before the beginning of the new crop year, timing is becoming critical.

Kevin Bender, president of the Western Canadian Wheat Growers Association, said grain growers are interested in committing a portion of their 2012-13 wheat crop to CWB pools.

However, many are reluctant to sign up until the CWB concludes handling agreements with more companies, he added.

“It is certainly a valid concern,” said Bender.

“There are people that want to sign a CWB contract but if they’re … not near a Cargill or somebody that has a grain handling agreement with the CWB, what are they supposed to do?

“They (the CWB) said they were confident that they were going to have handling contracts with all the major handlers, but it hasn’t happened yet.

“There is some concern because farmers want to start signing up some contracts for off-combine delivery or harvest delivery.”

The CWB has concluded grain handling agreements with only two companies — Cargill and the South West Terminal near Gull Lake, Sask.

Cargill has primary elevators at 29 locations in Western Canada, including seven in Manitoba, 12 in Saskatchewan and 10 in Alberta.

It also owns grain export terminals in Thunder Bay and Vancouver.

The CWB unveiled details of its new pooling contracts in late March.

The harvest pool, which runs from Aug. 1, 2012, to July 31, 2013, is open to durum and malting barley, as well as Canada Western Red Spring, Canada Western Red Winter and Canada Prairie Spring Red wheat.

Signup for that pool ends Oct.31 and delivery is guaranteed by July 31.

The CWB’s other pooling option, the early delivery pool, runs from Aug. 1 to Jan. 31, 2013, and has a signup deadline of Sept. 28.

In a recent interview with Reuters News Agency, CWB president Ian White declined to say how much grain has been committed to the CWB since details of the pool programs were unveiled.

Earlier in the year, he estimated that a voluntary CWB could handle as much as one-third of the wheat produced in Western Canada during the 2012-13 campaign.

Bender said that appears to be optimistic.

“I’m not going to say he’s wrong … but I wouldn’t have estimated it to be that high,” he said.

“I would have thought 10 to 20 percent … would have been more realistic. Just from talking to farmers, I have trouble thinking they’re going to get that much grain.”

Ward Weisensel, the CWB’s chief operating officer, said CWB officials are mindful of the tight timelines.

“Discussions continue and we’re hopeful that we will be able to make announcements very soon.”

Wade Sobkowich, executive director of the Western Grain Elevators Association, said progress is being made between the CWB and WGEA members, which handle 90 percent of Canadian wheat destined for export markets.

However, negotiations are complex and the process is taking more time than anticipated, he added.

Sobkowich said the recent Canadian Pacific Railway strike, which caused logistical delays and delivery disruptions, created extra work for grain companies.

  • Landlords and interested parties who share in returns can no longer be included in the contract signed by the actual producer. Separate contracts must now be signed for each landlord and interested party sharing producer returns.
  • Ten-digit CWB producer ID numbers will become eight-digit customer numbers. For existing producer ID numbers, the customer number will be the same as before, minus the two-digit prefix (00- or 01-).
  • A CWB delivery permit is no longer required. Producers with existing producer ID numbers are not required to renew. New producers can call the CWB at 800-275-4292 to be assigned a CWB customer number.
  • As of June 18, cancellations of cash tickets will only be permitted within 15 calendar days of the issue date. This also applies to replacement cash tickets that change the class, grade and/or protein on previously issued cash tickets. Any protein changes must be within 0.5 percent of the original protein reported. These provisions apply for the remainder of the crop year.
  • As of Aug. 1, CWB will no longer issue export licences for shipments of wheat, durum and barley. All special licences issued on an annual basis will automatically expire July 31. For the current crop year, individual export licences will continue to be issued until July 31.