NEWBURG, N.D. – Spring flooding in parts of North Dakota is increasing the demand for Canadian malting barley and rekindling the lingering debate over the Canadian Wheat Board’s monopoly in foreign market sales.
This spring, farmers in the north-central region of North Dakota seeded only about 20 percent of their grain land because of excess moisture.
Although many of the crops yielded good quality malting barley, volumes were down because of flooded acreage.
Faced with an unusually small supply of locally grown malting barley, the Souris River Grain Company, located 50 kilometres from the southwest corner of Manitoba, decided to tap the Canadian market.
Read Also
Canola oil transloading facility opens
DP World just opened its new canola oil transload facility at the Port of Vancouver. It can ship one million tonnes of the commodity per year.
This fall, the North Dakota company placed ads to buy malting barley from western Canadian producers.
Assistant manager Lonnie Zahn said they had “millions” of calls from Canadian growers interested in selling their crop south of the border.
But as of Dec. 9, only one Canadian farmer had delivered grain to the firm’s concrete terminal at Newburg.
Manager Tim Bullinger said several growers were frustrated with the Canadian Wheat Board’s monopoly over export malting barley. It makes it illegal for Canadian growers to sell malting barley directly to foreign buyers without going through the wheat board.
The Souris River Grain Company has a contract to supply three million bushels of malting barley to Froedtert Malt, a brewery in Milwaukee. Bullinger said they have until the fall of 2002 to fill the contract.
As of Dec. 16, the company was offering $3.65 per bushel (Cdn) for six-row malting barley, with 70 plump, 13.5 percent protein, 13.5 percent moisture and zero DON, or deoxynivalenol, a toxin produced by a fungal disease in barley. Zahn also quoted a price of $3.97 per bu. (Cdn) for two-row Harrington.
Those prices attracted the attention of the Canadian Wheat Board, which is considering whether it’s worth shipping some malting barley there by truck.
When marketing malting barley into the United States, the wheat board usually sells direct to end users. And the CWB tends to make more money for the grain pool by shipping barley south on rail rather than by truck.
However, the nearness of the Souris River Grain Company to Manitoba gives it some appeal.
“This one is an interesting one,” said Adrian Measner, CWB executive vice-president of marketing. “We want to see what the value is you get when you actually take some trucks down there.”
Art Waldie, Saskatchewan vice-president of the Western Barley Growers Association, wishes producers could ship direct to buyers such as the Souris River Grain company without going through the wheat board.
“If there was a possibility of getting it across the border, that’s the ideal,” Waldie said.
But he also knows the consequences of challenging the wheat board’s monopoly. He was among the prairie farmers convicted and fined for illegally exporting grain after they took part in a series of border runs in 1996. The participating farmers did not have wheat board permits to export grain.
“The injustice is there,” said Waldie, in reference to the court rulings that upheld the wheat board monopoly. “There’s no doubt about it.”
Wheat board chair Ken Ritter challenged the idea that the grass is greener on the other side of the border.
Ritter said the prices that sound so appealing often are those for top quality malting barley. He and Measner both agreed that getting those premiums can be a challenge.
“There’s a big difference sometimes between a quote and what they actually pay you when you get there,” Measner said.
