Has post-CWB marketing freedom been good for farmers?

Has the Canadian Wheat Board monopoly really been gone five years?


For such a revolutionary change in western Canadian wheat marketing, the Aug. 1 “marketing freedom” five-year anniversary passed relatively quietly. Farmers and marketing advisers, whether fierce partisans or neutral stakeholders, looked back on the massive changes to western Canadian wheat and barley marketing wrought in 2012 and agreed on a few things:


  • Access to the U.S. market has become a significant factor for farmers near the border but not for those far away.

  • Farmers exist in local wheat markets now, driven by regional dynamics, rather than inside a prairie-wide market as in the CWB days.

  • It’s unfortunate that a liquid Canadian futures market for wheat and barley has not evolved.

  • Grain companies appear to have evolved a functioning wheat pricing and delivery system, at least in terms of clearing the crop.

  • Rail transportation woes were not cured by the end of the CWB monopoly.

  • The decline of wheat as a competitive option versus other crops did not end with the CWB monopoly.


To Brian Voth, a marketing adviser with IntelliFARM in Ste. Agathe, Man., the most important bottom-line conclusion is that farmers need to take marketing wheat and barley seriously.


“Marketing wheat is not easy,” said Voth, who advised farmers both before and since the CWB monopoly ended. “It’s a lot more work.”


That work has been worth it for many of his clients because they have many local elevators, plus the United States is just down the road, providing many ways to find the right buyer.


While marketing wheat and barley in the post-CWB world is more challenging, analyst Chuck Penner of LeftField Commodity Research said the transition has gone better than many expected, even with the hellish transportation woes of 2013-14.


“It was a lot less difficult than some thought it would be,” said Penner.


The transition from CWB to free market occurred in the midst of a maelstrom of factors that make its net impact for farmers extremely difficult to assess. 


The U.S. Midwest drought of 2012-13 created high prices and strong demand for the free market’s first year, and the huge Canadian crop and nightmare winter of 2013-14 created a glutted elevator system and broken down rail system for year two. 


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Big crop years created more stability, but now this drought-hit summer is likely to throw its own monkey wrenches into calculations about the true marketing impact for farmers.


For farmers of fierce pro- and anti-monopoly sentiments in 2012, nothing in the past five years has affected their view of whether the change was good for farmer returns.


“I think it’s all been good,” said central Alberta farmer Jeff Nielsen, a former CWB director who is now president of free-market-oriented Grain Growers of Canada.


He said farmers can now manage their farms better with the same control over their wheat marketing as with all their other crops, and they can take advantage of opportunities denied to them inside the bureaucratic and policy-dominated confines of the monopoly.


Bill Gehl, the southern Saskatchewan farmer who is chair of the Saskatchewan Wheat Development Commission, couldn’t see things more differently.


“The grain companies, they’re the winners in this,” said Gehl.


“The premiums for quality wheat have all but disappeared.”


When Nielsen looks at his local market, he sees new grain elevators offering him aggressive new buyers for the crops he grows, following more than a decade of grain industry stagnation in the CWB’s last decade.


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Now, not only has new concrete been poured near his farm, but lots more concrete is being poured for export terminal expansion and new builds on the West Coast.


That has and should lead to growing demand for quality wheat and barley from buyers who want to source and move it.


When Gehl looks around him, he sees a complete lack of the dynamism that monopoly opponents promised.


“How about all the new pasta plants built in Saskatchewan?” Gehl said with a rueful chuckle about the non-existent processing plants that monopoly opponents often promised.


He not only sees little new investment but also signs of fat margins for the monopoly-like grain companies and railways that have taken over the post-CWB grain marketing world.


Where Nielsen sees a transportation system free of the CWB’s costly interference, Gehl sees a system robbed of an important farmer advocate.


Nielsen sees new opportunities and values in supplying the specific types of wheat and barley to the specific buyers who want it; Gehl sees Canada’s traditional quality and consistency premiums disappearing.


While they don’t agree about much on the CWB, they agreed on two issues: more needs to be done to make wheat an attractive option for farmers, and the grain transportation system needs to operate in a way that allows farmers to benefit from the value of the crops they grow.


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  • ed

    With the at the farm gate price of wheat hovering around the 50-60% of the port price it truly is a no brainer as to whether farmers are better off with or without a CWB single desk monopoly marketing agency delivering the best price for their wheat until it is released from the farmers ownership at a foeighn terminal in another country with guaranteed financial vehicles in place and foeighn currencies locked in months in advance to bullet proof the sale. Their (the CWB’s) long term track record of returning 89-93% of the port price to Western farmers at their farm gate was quite incredible, and as Brian mentions and it is obviously without any wonder that he has identified that wheat acres are in decline. If you are a grain company it is fantastic as shown by their $4 billion dollars of extra profit annually upon the demise of the CWB. For marketing agencies it has been good as well as they have been able to get in on a cut of the tattered remaining wheat value left behind by those companies. And their are some farmers that like to see their neighbors in peril, believing that in tough times they will remain standing and finally get their hands on some weaker farmers land, maybe some 50 cents on the buck machinery and perhaps their sons or daughters as some excellent labour to run those conglomerates while they are in Arizona for the winter. It is not hard to see why some disaster capitalists wanted the CWB gone. Hopefully their new hired hands sons or daughters can fill our the far end of the bench at the hockey arena, so there is still community, right. The $12.64 at the farm gate #2 15.5 protein RSW prices of the 07/08 crop year seems to be missing in this lazy market and adjusted for inflation should probably be over $16 now. There truly is no debate unless you are trying to deceive.

    • rayrohr

      We now have freedom of choice – pick who you want to get screwed by,

      • Harold

        If you are being “screwed” it is because you are lacking in choices and are arbitrarily forced to accept one of only a few choices offered. Freedom means that you have unlimited possibilities so therefore the “freedom of choice” you still do not have. The G-1 is the former CWB reduced to 49% and the other two G-1’s 51% who make up the G3 100% are foreign investors serving in their own interests ahead of Canadian interests and are also subsidized by Canadian taxpayer dollars and somewhat immune to the Supreme Court of Canada’s jurisdiction and our Democracy. Farmers once had the ability to steer the Canadian owned wheat board and to make them accountable if they made the effort to do so, but now there is no such ability and yet some farmers think that they have gained something far greater in value. Our inept and stupid politicians of the past who were entrusted to act with our taxpayer investment dollars have shown their incompetence when they have continuously failed to invest our tax dollars in something so important as our agriculture infrastructure and national natural resource. Now the foreign investors will do in Canada what our hapless government didn’t ever have the brains to do as foreign investment now owns the controlling interests of Canada’s agricultural resource.
        As a Canadian 4 stakes holder, did you or any other 4 stakes holder get a say or were we only showered with investor dollars for the repairs to our failed infrastructure. If we wipe their “green” from our eyes, what does this say about all of our former leaders and Agriculture Ministers?

        • ed

          Much like the screwing that Alberta is getting on their free trade oil. A 3% royalty, ( approx. 90 cents), on a $30 barrel of oil that contains roughly a years worth of hard labor for one man’s worth of energy in it. A barrel of oil contains about 2500 man hours of hard labor worth of energy or $27,500 in value at minimum wage rates. That is a complete tragedy and definitely a lesson on how not to market a product. Long story short, we have not learned much from that Alberta free market debacle.

          • Harold

            I believe that we have learned or that our inner feelings of numbness are speaking volumes but we are failing to do anything about it because we believe in how not to and acceptance. We have learned/feel that things were corrupt at the beginning and therefore by design they can only fail. Corrupt never stands the test of time. Foreign investment has led to Oil industry collapse. Every commodity is headed and steered by crime and fraud: a trail to the global Elite. (1%)
            Now foreign investment is dependent upon limited royalties. Increase the royalty and investment leaves the province.(ransom) For what Alberta lacks in royalties (crown term- Royal) the government (crown) taxes the hell out of it’s citizens for, at the pumps, related product, and now the carbon tax. A portion of the Royal in $Royalties is transfered out of Alberta to Ottawa to fulfill Alberta’s obligation (Constitution/equalization) to the crown corporation called Canada (added Alberta tax) The Alberta government cannot possibly give a damn either way because they cannot feel a thing; If Bill Smith is paying into one hand and Bill Black is paying into the other hand, what does it matter to you? Unlike the public, Government are a dead non-human entity; a Corporation. We have allowed the dead to control the living. For clarity, there are living people who work for government but their mistakes don’t hurt or cause suffrage at home. Politicians are given tax free wages (pay raise) and a pension after two terms (pay raise) to lessen the burden of the tax that the public pays. (law-makers/politician)
            What is the corruption? Oil is a Canada natural resource and it is owned by the ground that we walk on. Who has the god given right to extract it and gain from all of its benefits? The Queen? Foreigners? Government/Crown? If the people of Alberta owned the oil, what taxes would they ever have to pay? If all oil was owned by Canadians what taxes would have to be paid, and what industry and jobs would Canadians create? Where would the Canada Debt be and would we even be aware that there is a global shortage other than a higher demand for our products, and what would the price be at the pumps of an unlimited fuel supply. This is not wishful thinking; this is what Canadians have been robbed of and the illustration of voluntary slavery. What can we say about farming; is it the same?

    • Stephen Daniels

      Wonder if some people will ever tire of beating a dead horse?

  • Dayton

    we have 5 terminals within 50 km’s of our farm and a computer to access dozens more. Do we need the CWB monopoly? Not at all…..

    • ed

      If you don’t mind selling to thieving middlemen rather than to an actual customer at a far higher price, you may be right, however most farmers would rather have the extra money.

      • Dayton

        The CWB was the largest of all thieves.

        • ed

          The CWB was sort of like a Robin hood you might say. They robbed from the rich grain corporations and did give to the poor price taking farmer. If you want to be charitable and right what you think is unjust about that, and have the farmer share more with these corps please be honest about it. Just state the obvious. You want to share much more with them and feel that all farmers should be made to do like wise as you know best. Just say it. Maybe you or someone you know works for them or is a grain marketing guru or you are looking for more land. It “is” ok to admit that.

          • Harold

            The article in my opinion is nonsense. How do you compare a non-entity fiction with a live entity to determine conclusively what each value would have been in today’s market place. Does someone have a crystal ball? You would need competition between an active CWB and an active G3 (G2) operating in today’s market place in order to form any reasonable conclusions. This article of illusion only creates a pissing contest and has the value of one.
            The articles presented today are deliberately absent of fact and they are nothing more than corporate fishing expeditions to gather what the public actually does know and what the majority has been; or is being swayed towards. You already know what happens when the public is being swayed by facts in the corporate or governmental wrong direction and then what happens next in print. It is Note worthy that If you want to hear facts you just need to “play dumb” and you will get facts whereas your secret partners can disassemble the fished for facts with “believable” contrary corporate propaganda. They play in both playgrounds at the same time and we are their victim. To stop the propaganda machine we need to keep our facts to ourselves and make statements that beg an answer to a question instead. When those in a conceived position of authority cannot answer a question they become ineffective and they are naturally dismissed. In contrast, when we present facts, valid or not, we are seen as those without a position of authority and we are easily dismissed, even though your quote may be from Einstein himself. It is all just a corporate game and it is made obvious when those who comment are displaying an extensive knowledge beyond that of the headliner article and its author.

          • ed

            Exactly. Eliminate completely the best option so choice is limited to the low end of the field and the new even poorer ones that pop up in that weak field of low life’s. They are only strong by sheer unbridled thief. Works for them and a few hat manufactures as trinket rewards for some farmer to keep any chance of those farmer being exposed to to much light.

          • Harold

            Thanks for your comment. Farmer’s are more powerful than they think they are but they just don’t know it. They believe the deceptions that have been hand crafted and offered to them by those of title, and they live in it’s stress. The farmer’s pursuit of profit is crafted to the pursuit of slavery to those of title. Although farmers may not be able to articulate this, they certainly feel it annually in their bones and farmer’s only need to look into their fields and gardens to see the deception. The farmer puts one dollar into that field and the field gives back the dollar plus creates brand new money from thin air and perhaps tenfold. The farmer is now the bank and the customer buys the product and the tenfold is his profit; farm size is irrelevant. Even a residential home garden applies; you invest a dollar and you save tenfold: everyone has to eat. What entities are siphoning off the tenfold, and what farmer gave them the authority to do so, and what farmer will allow them to continue to do so? Does the words voluntary slavery come to mind? How many fat cat governments and fat cat food organization authorities does it take to sell a glass of milk, a carrot, a chicken, a steak, and a loaf of bread to a consumer, and who ends up paying for their rent? Is the fat-cat responsible for the loss of small farms in order to satisfy their abundant farm greed? The farmer and consumer are creating new money from their labor, and the fat cats who do not of their own create any money, siphon money from both the farmer and consumer to fill their bank. The fat cat over-reaching is the reason that farmer’s and consumer live in stress and servitude. (money slavery) In slavery and servitude we admit to all that we each are “making a living” but in freedom from slavery we would say that we are “making a life”.

          • Dayton

            Oh, today all of my grain is sold directly to local and international processors FOB farmgate. No strings attached and no charges by your beloved CWB for doing nothing. Yes I’m still in an area where the large terminals are. Doesn’t mean I have to sell to any of them. CWB made you think that you did. Not at all today

          • ed

            You are still better to sell directly to the end user than to sell to someone that has all their middlemen friends taking a cut off that price before they set your artificially low farm gate price. The insurance premiums deducted from each load for all these parasitic middlemen is in itself a hugh discount to your farm gate price as compared to the bulk rate provided by a sole selling agency such as the CWB. Often near nothing in fact which can add dramatically to a farmers end price. Not as good for having your neighbor go broke and sell if that is what you are looking for however.

          • Dayton

            Seriously the only beneficiary of the CWB were administrators with great pension plans. The St Lawrence and Paul Martins fleet of out of country registered ships.

          • Harold

            Paul Martin came into power because the voters stared at the money instead of the hand that was feeding it. Its much like those who are now staring at the money of the G3 and don’t give a damn about the hand that is feeding them. They stupidly believe that “Satan” doesn’t carry cash; only the hand of “god” does. You cannot expect anyone to think that you are serious when all you can see of the subject matter is a pension plan. Looking up from a microscope, is a wide lens camera is too much information?

          • ed

            Actually the admin people’s wages and pensions were not as good as they are now. They are much much better now that most all of those people to whom you refer have moved to working for the big grain companies. They took the farmers marketing contacts and secrets with them to be used against the now price taker primary wheat farm producer. Part of the problem as well is the sheer # of new hires to duplicate what the wheat board was doing for the farmer, but only this time it is being done against the farmers better interest and for their new masters. Approximately 5 to 6 fold the 400 people that worked for the CAB on behalf of the farmers was hired by the big companies to do similar work against the farmers better financial interest. The top ones are being paid far higher to steal from the farmers and there is a lot of farm equity still untapped to be vacuumed off. It is a very cool process to watch from the outside when you know lots about it. Thanks!