Canadian millers would not be upset if the Canadian Wheat Board gave the owners of a proposed pasta plant a rebate on their grain.
Prairie Pasta Producers wants the wheat board to refund to its farmer-owners the spread between the price the board pays them for their grain and the domestic human consumption price it would charge the proposed mill to buy back that grain.
At first the wheat board gave the group a flat-out no to the idea. But now the board said it’s “revisiting” its new generation co-op policy and may give the DHC spread back to the owners of groups like Prairie Pasta.
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The Canadian National Millers Association said it doesn’t care what goes on behind the scenes, as long as new generation co-op mills pay the same domestic human consumption price for their grain.
“The milling industry is not opposed to new investment or new capacity with the industry where all the participants essentially face the same rules of marketing and conduct,” said CNMA president Gordon Harrison.
Harrison said it’s more of a producer issue than a processor issue.
The price spread would be returned to the farmer-owners of Prairie Pasta and not the plant itself.
Mike Greer is the general manager of the Ellison Milling Company in Lethbridge, Alta. It is one of nine mills in Canada that can process durum wheat. Those nine mills consume 280,000 tonnes of CWB durum each year.
Greer said as long as there’s a level playing field in the industry he doesn’t care what the board does with new generation co-ops.
“If they’re paying the same as me, I guess it’s none of my business.”
But he is puzzled about why the DHC spread is such a big issue for the proposed plant that Prairie Pasta touts as a $120 million investment.
“That’s going to make or break this whole thing? I mean what’s going on? I think somebody’s getting buffaloed here.”
He said the DHC spread would amount to hundreds of thousands of dollars on a $120 million investment, which shouldn’t affect the return on investment that much.
CWB program manager Earl Geddes said the DHC spread is a number that can bounce around a fair bit, but in three of the last four years it would have worked out to a negative number for the proposed Weyburn, Sask., plant, so nothing would be returned to producers in those years.
Geddes also bristles at the suggestion the plant will bring jobs and a $120 million investment to Western Canada.
“We perpetuate this myth that there’s going to be the potential for this huge pasta plant when their own business plan says go and buy something that’s operating in the U.S.”
