Producer meeting calls for CWB return

A group of producers hopes to reverse a decision made nearly five years ago: the termination of the Canadian Wheat Board’s monopoly on wheat and export barley sales.

A former CWB director and other board supporters met Feb. 10 in Swan River, Man., where more than 50 producers called on the federal government to re-establish the CWB single desk.

“The fact a farm meeting of this size could unanimously pass this resolution is a strong indication to Ottawa that farmers are now feeling the loss of the CWB in their pocketbooks,” said Kyle Korneychuk, who farms near Pelly, Sask., and is the spokesperson for the Canadian Wheat Board Alliance.

In a release, the CWBA said the Conservative government’s decision to eliminate the single desk has cost prairie producers billions in lost revenue, based on a study by University of Saskatchewan agricultural economist Richard Gray.

Ken Sigurdson, a Swan River producer, said when the CWB was in place producers captured 90 percent of the port price.

“Now without the single-desk farmers are only receiving between 40-60 percent of the port price for their wheat.”

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Breaking it down to a region, farmers in Manitoba’s Swan River Valley lost $70 million in the last two years, Sigurdson said.

The decades-long controversy over the CWB and single desk selling came to an end last year, when the federal government finalized the sale of CWB assets.

G3, a company owned by Bunge and Saudi Arabian investors, acquired a 50.1 percent stake in the CWB for $250 million. The remaining 49.9 percent is held in trust for western Canadian farmers who do business with G3. Producers are allocated five dollars in equity in the trust for every tonne of grain delivered.

Contact robert.arnason@producer.com

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  • Bruce

    They must have bused in every NFU member in western Canada for the meeting. In my part of the country you wouldn’t get a soul to attend a CWB meeting. The price of wheat in western Manitoba / eastern Saskatchewan is 60% of port price for one reason, freight. When futures prices drop below $5/b and freight costs are close to $2/b the math isn’t pretty. Low prairie prices are not due to the “loss” of the single desk, they’re due to freight costs and always have been.

    • ed

      Some area’s are more lame at looking out for themselves than others. It is easier to get your wife to pick up more shifts than it is to explain to her that your own hair brain thinking made it necessary.

      • Stephen Daniels

        I had to get two wives ,Ed cause one couldn’t pick up enough shifts but between the two of them we are making a go without the CWB.

        • ed

          Yes, you are starting to get it now. It shouldn’t have had to come to that.

    • ed

      CWB always controlled those freight costs so the farmer received 93% of the port price. So you are kind of right, kind of very wrong. It is not the loss of the words CWB or single desk but rather the theft that has been allowed to occur with out it or something identical to it, even with a different name (say “Anti-crime squad for vigilant and non vigilant farmers in solidarity to preserve and protect the value of their wheat and barley sales” for instance) in its place. It was not the fact that the vault door was left open as much as it was the fact that people that you thought you could trust came in to help themselves. Bad assumption were made by a few farmer like yourself. It’s ok. You didn’t know!

    • Guest

      With producers of wheat now receiving 60% of port price. And the single desk CWB controlling freight as they must have your price this year with the single desk CWB would be some where around $7.00 per bushel for wheat.

      • ed

        Yes, that is an extra 50-70 cents / bushel. and with all the other cost savings the 93% of port price would be as easy to attain now as it was in 2008 with high prices, or the mid 80’s when the price of wheat was lower at $2-3 / bushel. 93% of port price is just that, 93% of port price. The CWB did it consistently, but industry can’t do it because they just can’t keep their hands out of the farmers cookie jar once you take the lid off it for them.

        • Bakn Blak

          The CWB were the ones stealing from the cookie jar.

          • ed

            The CWB extracting more from our wheat buyer’s cookie jars, and returning it to the farm gate on our behalf was the only cookie jar that they actually had access to. I wouldn’t exactly call that stealing, but I was ok with it.

  • Here are the hard facts and no on has disputed Richard Gray’s analysis on the losses to farmers caused by the CWB elimination.

    Richard Gray, Agricultural Economist, U of S, August 2015 paper, explained farmer losses in 2013/14 and 2014/15 years:

    “The resulting increase in export basis is reflected in a lower price paid to producers and reduced farm revenues. A conservative basis impact of $5.05 billion, in addition to the $1.43 billion price differential for Canadian wheat relative to US wheat in Portland, means that the minimum total value of loss to producers is approximately $6.5 billion dollars.”

    The real grain price situation for farmers got substantially worse in 2015. Grain is priced in US dollars and because the Canadian dollar has lost 30% of its value the domestic grain price (in Canadian dollars) for western farmers should have increased accordingly but it did not.

    Instead the price for number one wheat in Manitoba is effectively $4.30 US a bushel, a price not seen for decades, and is close to Great Depression levels once it is adjusted for inflation. With the loss of the CWB and Stats Canada reporting a record 90 billion dollar farm debt rural Canada faces a perilous future.

    • Stephen Daniels

      Guess those Manitoba farmers should truck it south.Thanks to no CWB they are able to now,

      • Guest

        Manitoba farmers will only truck grain south of the Canadian border when the U.S. allows such trucking. When the United States wishes no more Canadian grains across their border. Whether with the single desk CWB or the open market system. No more Canadian grain will be shipped to the United States.

      • ed

        Most that trucked wheat to the US, didn’t do it long. The CWB was known to chuck a couple of dozen 100 car units down there when the price turned favorable. 1/60th the freight costs as compared to trucking and able to lock in relatively hugh volumes, (200 or 300,000 tonnes), before the spot premium disappeared. These premiums were not available often, but always captured even if only in 200-300,000 acres worth of wheat increments.

    • neil

      I think you have the exchange formula backwards. If our dollars were at par then we would be getting $4.80/bu for our wheat but since our dollar has lost 30% we are offered $6.30 in Canadian dollars. In otherwords we are fortunate the dollar has gone down or there would be a lot more hurt selling wheat in Canada right now.

      • ed

        It works both ways l guess. My conversion calculator does. Given that the world price is strong and good quality wheat prices are strong, the Canadian price of wheat should have gone to about $8.37/bu. vs a $6.30/bu US price. With the CWB single desk in place 93% of our present Vancouver Port price would be somewhere north of $10.50/bushel farm gate and a couple of bucks more if you had real good protein levels. Now mind, your initial price might only be $7.50 a bushel or so and with a couple of interim bumps through out the crop year up to only about $9.50 or so, and you would have to wait about 4 long months for that last $2-3/bu to trickle in, in early Dec. That could be hard on cash flow, but given the values received, maybe not? Many farmers under the previous CWB single desk system had been deferring all their income long before that point in the year. Are you still feeling fortunate?

  • dusty

    50 producers eh? They should accurately represent the 80 to 90000 of us farmers in western Canada. Shotty and lazy reporting on this story. I’m sure I could roundup a few hundred that would love to never hear of the cwb again.

    • ed

      You would be surprised. The wind bags have mostly gone into hiding.

    • Guest

      Not much use inflating numbers. The single desk CWB used the number of about 70,000 grain producers in western Canada

  • John Fefchak

    As the World turns , 90 years later, the fickleness of some grain producers reveals itself once again. Their family of past grandfathers suffered the consequences of grain buyers greed, lack of competition in transportation, lack of transparency, etc, etc. and devised a plan.

    Former Conservative Prime Minister, John Diefenbaker,understood that
    legislation could be changed and so did Stephen Harper, but not on
    Diefenbaker’s terms. Harper and Ritz not only betrayed the legacy of respect for Western Canadian farmers, they also showed total disregard for current producer opinion and democracy.

    Which bring us to the present situation,where voices are being heard that things are not, as was predicted to be.

    Will a new Phoenix be fostered and arise from the ashes of the former Canadian Wheat Board, or will the Grain Companies become the Masters and our farmers will be their landlords.? Or is it already too late?

    • ed

      Boy did you get that right. “Voices are being heard that things are not, as was predicted to be” It is all on record at the Proceedings of the Senate Standing Committee on Agriculture and Forestry meetings of Dec. 7th, 2011 (www.parl.gc.ca/content/sen/committee/411AGFO/07EVB-49257-e.HTM) and Dec. 9th, 2011 (www.parl.gc.ca/content/sen/committee/411AGFO/09EVA-49259-e.HTM). All the highly qualified Harper Conservative Senators were there such as Mike Duffy PEI, Don Plett MB and David Tkachuk SK as well as the Chair of the Committee Percy Mockler NB, Fabian Manning Newfoundland and Labrador, Nicole Easton Ont., Kelvin Ogilvie NS and Michel Rivard Quebec. The Liberals had a sprinkling of representation with Terry Mercer NS, Bob Peterson SK, Fernand Robichaud NB, Joyce Fairbairn AB, Maria Chaput MB and Frank Mahovich Ontario. The Liberals were stifled by the Chair but the speaker for the most part were not. Speaking for the support of Democratic principles and the 47.1 vote were several farm producers from across the West. They detailed what would happen to the CWB if the legal vote were to be circumvented thru legislation and how the CWB would die and so to would the fortunes of farmers and towns and cities in the West as the theft rammed up. Speaking well and in articulate detail for all to read in defense of the CWB were Drew Baker, Brendan Sigurdson and Andrew Dennis of Manitoba, Matthew Gehl, Eric Wilmot, Gilbert Ferre and Bill Rosher or Saskatchewan as well as Laurence Nicholson and Ken Larsen of Alberta. If anything the impending doom and logistical nightmares coming were vastly under stated as we are all to aware of now with Economic Professor Richard Grey’s most recent study coming out of the U of S in Saskatoon Sk. Members of “the little white lie club” that spook at the forums included Wade Sobkowich, Executive Director for The Western Grain Elevators Association, Phil de Kemp, President of the Malting Industry Association of Canada, Fred Stile, Chair of the Thunder Bay Port Authority and Brad Chase, President of Omni TRAX. As you can probably guess already, none of their song and dance routine has come true at all. Surprise, surprise, right. No actual farm producers spook on what you would consider the anti wheat board sentiment at these proceedings. Why? And as a final point of clarification on unforeseen and what is being painted as unknown and disconnected consequences caused by the ramming Bill C-18, (The Reorganization of the CWB), through the House of Commons, 1st and 2nd reading, the Senate 1st and 2nd reading, Parliamentary Accent and Governor Generals signature in literally just days, I will leave you with a well done speech by Senator Grant Mitchell and read in the Senate on Oct. 18th, 2011, warning of the dire consequences of passing this Bill C-18 and the political foley of not following due Democratic principles and process. Available at; (senatorgrantmitchell.ca/speeches/14319.aspx) all will find it excellent reading and thought provoking. I urge any and all of you who read this, (especially print reporters), to endeavor to read and understand all the material above to the best of your abilities before carrying on in your quest to find the truth in this matter and determine what is causing what. Thank you for your time. P.S. Get yourself a very large cup of coffee for this, a pen and a note pad. Ask questions and get answers.

  • Bruce

    The CWB’s influence on freight rates is overstated. Under the CWB our local freight rate to Vancouver was about $1.65/bu, the current local rate is $1.20/bus (north central Sask).

    • ed

      So it is the elevators now that are doing all the stealing after all, because you types were originally blaming the railways. Thanks for the clarification.

      • Bruce

        It’s called a market Ed. No one is stealing from you or I. If we don’t like the price we don’t sell. If we can’t make a living growing wheat we grow something else. With record wheat stocks world wide you’re not going to see $7 or $8 wheat. The market is telling you to grow something else (peas, lentils, beans, malt). “Types” like me prefer to have the market direct our decisions while you and NFU crowd prefer to have the federal government direct your decisions through quotas and artificial pricing schemes. I’m not going back to your Utopia and neither are the vast majority of prairie farmers.

        • ed

          The world price of high quality RS wheat is very high right now. Blending up $2 US utility feed wheat with high quality $10 Canadian RS wheat purchased at our farm gates for $4 US value and sending it out into a world at a scalpers resale value that is screwing everyone involved may not be theft in your mind but is most definitely legalized criminal slight of hand. A free market is for the seller just another way of being asked to bend over for a financial screwing. Some people like that more than others apparently.

          • Bruce

            Canadian wheat isn’t worth $10 just because you think it should be. There are a handful of Japanese and European mills that buy limited quantities of Canadian or American hard red wheat (dark northern) and pay a premium for it. The vast majority of our hard red wheat is sold at a slight premium to other utility wheat. This premium is usually expressed in the premium of the Minneapolis market versus Chicago and Kansas City. Currently that premium is under $1US a bushel (some years when good quality wheat is scarce this spread increases accordingly). The limited market for high quality spring wheat is not large enough to lift the entire Canadian HRS crop to double digit values, especially in a year with record world wheat carry out. Limited market with plentiful supplies = low prices (add in our freight disadvantage and it looks even worse).

          • ed

            Bruce, … The CWB received for the grain that they sold on behalf of the farmers 93% of the port price year in year out whether the prairie crop was 20% #1 high protein RSW and the rest something lower or it was 80% #1 high protein RSW and the rest feed. You guys, anti-types, always said Canadian wheat was a small part of the world export market. You were right on that perhaps, as the CWB never had a problem selling all of our high quality, high protein RSW at hugh premiums even in years where nearly the entire crop was in that category. That did as you have recognized drop smartly the instant that the companies got their greedy little hooks into the equation and not unlike drug gangs, determined their new ‘cut’ at all the various levels, and determined a new handling, elevation, propaganda and dog fortification rates to charge off to producers at the farm gate that was more in line with the times previous to the CWB, long, long ago when farmers on the prairies had to sell some cattle,pigs or chickens to get enough cash to pay the freight on a box car of wheat, because apparently the tale farmers were being told, the wheat in the box car was not worth enough to pay the freight and the debt with that company quite simply had to be cleared. What self respecting farmer not wanting to be black balled wouldn’t make right and man up and feed the wolf, right. The robber baron were building some beautiful mansions by the Red River in Winnipeg and some nice grain collection depots just like they are again today. Life is good right. Can you blame them. This gravy train couldn’t possibly last forever so they decided to make hay while the sun is shining. Sunny Days for them for sure, for now, but the sabers are rattling and when it all comes to an end, and it will, they will still be laughing, having piled up 50-75 years worth of income in a few short years. They must be urinating their nickers when they think of people like yourself and a few others helping facilitate such under handed tactics. But if you are a farmer, you obviously are not one of the ones paying attention to how this works. It is not a new thing, but it still can be hard to follow as the high bred version of the propaganda that accompanies it does predictably evolve so it constantly appears that we are in uncharted territory so the fix must be left to the industry experts. What could possibly go wrong there.

  • Tyler

    Don’t miss the cwb and never will. The world wheat stocks are at record highs right now and that is hurting the price but so what, we grow dozens of crops in canada, we are able to grow other crops at good prices and are able to contract a good part of them before the seed is even in the ground. I won’t even think of planting wheat until I can contract hard red for $7 before March.

    • Welderone

      So Tyler, you and Neil both have the correct answer. As you wrote world wheat stocks are at record highs. So any year a grain farmer found the price of wheat poor whether with the CWB or the open market system high carry over wheat stocks were the answer for poor prices. The same as Neil wrote, wheat is sold using the supply demand theory. So the answer is grow less wheat not more and you will receive a descent price from the buyers of wheat in the world.

  • ed

    We were the highest priced high quality wheat in the world. Our wheat blended with American garbage wheat now has to be the lowest price to get the sale. Very little understanding of how this is working. Many are too stubborn to listen to and face the facts. They accept being the victim and make excuses for and protect the perpetrators. Sad state of affairs. Sad farm gate prices.

  • Harold

    From where I stand, both sides of the discussion illustrate- how not to sell grain. The Government patented CWB didn’t go anywhere and remains in Canada, it merely changed hands to United States and Saudi controlling interests with 49.9 held in trust left to Canadian interests. However, when Farmers are selling on the “free Market” (49.9) it is likely to corporations who are subsidiary’s of USA and another countries interests. (I.e.. Cargill etc.) Canadians no longer own the rights nor the wealth to our own grains. Another example is “United States Canadian Pacific Railway” formerly known as Canadian Pacific Railways (CP) is 70% owned by United States interests and respectively 50% of USA/ Canadian National Railways (CN) is as well. Canadians do not own the rights to our own Rail systems yet it’s business as usual. In regards to the CWB, the Government cannot renege on it’s, and not our, “orchestrated back room” sale by giving control back to Canadians (legislation) because in doing so it would be considered hostile. [CWB not coming back, say Liberals] (CWB grain cars sold) That being said, our problem is not what has been done but rather what to do about it. As every person eats products originating from Farming, Farmers should be among the independent wealthiest That is a huge problem. what to do about it, it seems that an insignificant few, have the stomach for. What are the most passive, yet aggressive and progressive and deconstructing (wolves) solutions and measures that are possible for Canadian Farmers to take? (king is secure as long as we argue- very unsettled when we all stop and think) On the other hand, “Oh Canada….we stand on guard for thee”…. is another huge Identity problem. It is not our song to our Government nor the corporate – its a promise to ourselves. Its a sad day indeed when the corporate is protected by the Bill or Charter of Rights, as they now are. They are not a person as intended- they are but a piece of paper in a file cabinet. When this is allowed, I fear that we have become a piece of paper as well, with very little distinction.