WINNIPEG (Staff) – Canadian companies that buy wheat and barley want a panel looking at the future of the Canadian Wheat Board to keep one thing in mind when making its recommendations: The customer is always right.
“To proceed to redefine Canada’s grain marketing system on any other basis than what customers demand and perceive … is simply an error in thinking on the part of those who seek to change the system,” said Howard Rowley, chair of the Canadian National Millers Association.
Millers, bakers, maltsters and brewers spoke highly of the wheat board at the Western Grain Marketing Panel hearings here last week.
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Officials from malting companies in particular said the wheat board has helped the industry increase exports from 40,000 tonnes a decade ago to the current level of almost 600,000 tonnes.
Processing industry representatives said while they have sometimes had a love-hate relationship with the CWB, they agreed it has learned to make changes for domestic customers.
They said the board helps them manage risks and assures them of supply. They also said prices the board sets for wheat and barley are transparent and reflect current North American market values.
Eliminate tariffs
Paul Pickard, purchasing manager for Labatt Breweries, said while brewers are satisfied with the way the wheat board prices malting barley, they would like to eliminate tariffs keeping U.S. barley out of Canada.
Pickard explained if brewers had the option of buying U.S. barley, it would ensure wheat board pricing stays transparent.
Robert Chappell, general manager of Prairie Malt Ltd., said the wheat board helped maltsters get into growth markets such as Brazil. In the early 1990s, the CWB gave maltsters lower prices so they could get a foothold in Brazil.
Today, Chappell said Canadian maltsters are shipping more than 100,000 tonnes per year into the country at attractive margins.
Millers and maltsters told the panel they are opposed to a dual market system for wheat and barley.
Rowley said a dual market could distort prices and would put existing value-added industry at risk.
Jim Venn said maltsters fear delivery problems and lost export sales in a dual market. The senior official with Dominion Malting recalled the short-lived continental barley market of 1993 when prices plummeted.
“It is a fact that the more sellers there are involved in a market, the more downward pressure there is on price,” Venn said.
Panel member Avery Sahl noted many farmers say the board stifles rather than encourages value-added industry.
Phil de Kemp, president of the Malting Industry Association of Canada, said his group must do a better job of beating its own drum.
