WINNIPEG (Staff) – Wheat board officials offered a concrete example last week of how they can get the highest profits possible out of the U.S. market for farmers.
In many cases, the board is able to extract a premium because of quality and consistency. But it also captures savings on transportation costs because it ships in volume, by rail, and direct to the end-user with no middleman costs, board officials said.
For example, the board shipped 22,000 tonnes of durum from Estevan to Huron, Ohio Sept. 19 and received $7.87 (Cdn) per bushel, basis in-store Thunder Bay. The net return basis Estevan was $7.03 per bushel.
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That same day, a farmer from Estevan, shipping directly to an elevator in Stanley, N.D., would have realized $6.48 per bushel once trucking and brokerage costs were deducted.
Wheat board officials conceded that a portion of that 55 cents per bushel or $20.21 per tonne price difference comes from the board’s ability to cash-in on subsidized freight rates by shipping the grain to Thunder Bay and back before shipping it into the U.S.
But it is still able to achieve a $10 to $12 per tonne advantage over U.S. elevator price quotes to individual farmers, said CWB representative Ward Weisensel.
