Preparing for the future | Canadian Wheat Board expects first farmer contracts will be signed by the end of the month
The Canadian Wheat Board has signed an historic deal — its first commercial grain handling agreement with a major corporate player.
The CWB reached the agreement with Cargill, which has 30 country elevators in Western Canada and port facilities in Vancouver, Thunder Bay and Baie Comeau, Que.
The company also has a partial interest in a terminal facility in Prince Rupert, B.C. ,and is a joint owner of Prairie Malt in Biggar, Sask.
CWB president Ian White said it is an important first step that will clear the way for the formal rollout of new programs and post single-desk contracts.
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The CWB will continue to seek similar agreements with other grain handlers in hopes of improving delivery options for growers, he added.
“From our perspective, it (the Cargill agreement) is an important landmark … and now we’re obviously on to doing the same sorts of agreements with other companies.”
White said the CWB’s first farmer contracts are likely to be signed before the end of March.
“It’s probably going to be in the next couple of weeks,” he said.
Cargill is the third largest grain handler in Western Canada behind Viterra and Richardson Pioneer, which rank first and second, respectively.
Cargill’s total storage capacity at primary elevators on the Prairies is estimated at 665,000 tonnes, based on Canadian Grain Commission statistics.
That includes 30 primary elevators across the Prairies.
By comparison, Viterra’s capacity is 1.98 million tonnes at 92 primary elevators across the West. Richardson has 53 primary elevators in the West with total capacity of 936,000 tonnes.
Cargill also controls 176,000 tonnes of terminal capacity at Thunder Bay and 237,000 tonnes of capacity at Vancouver.
Cargill vice-president Peter Rowe said the new agreement means Cargill will offer the CWB’s complete portfolio of contracts to farmers.
He said it is still unclear how that volume will be affected in an open market environment.
“We’ve talked to a lot of our farmer customers and they indicated they were very interested in doing business still with the wheat board in some form or fashion, so we have to respond to that need.”
Critics of the federal government’s move to eliminate the wheat board’s sales monopoly on wheat, malt barley and export barley have suggested that grain handling companies would have no reason to sign agreements with a competing grain handler such as the CWB.
In a news release issued last week, federal agriculture minister Gerry Ritz said the agreement with Cargill suggests otherwise.
“The CWB’s first grain handling agreement is further proof that the CWB can be a viable and competitive marketing option for farmers,” Ritz said.
Meanwhile, White confirmed last week that the wheat board will be using the abbreviated version of its name, CWB, in the future .
“We are still the Canadian Wheat Board, that’s the name that we’re given by the act of Parliament … but we’re going into a new era now and there’s not going to be board and non-board grains any more,” White said.
“We still think there’s a lot of value in the name and a lot of people have been calling us the CWB anyway, so we just thought the thing to do was to continue with that branding and draw a bit of a distinction between the future and the past.”
