Winter wheat generally accounts for well under five percent of Western Canada’s wheat production and attracts a modest amount of attention.
But that’s changed recently, as the Canadian Wheat Board has come under criticism for its marketing and pricing of winter wheat.
First the Western Canadian Wheat Growers Association issued a July 14 press release taking the board to task over winter wheat prices under the board’s fixed price contract.
Then an Aug. 24 letter to the editor published in The Western Producer from a director of the Alberta Winter Wheat Producers Commission accused the board of selling winter wheat too cheaply, and of understating the quality of Canada Western red winter wheat.
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“It should not be surprising that many winter wheat producers are supporters of a dual market,” said commission director Craig Shaw of Lacombe, Alta.
“The CWB has failed and continues to fail in marketing Canadian winter wheat.”
Those are fighting words, as far as the board is concerned.
“Winter wheat has become the latest whipping boy for the anti-CWB forces,” said board spokesperson Maureen Fitzhenry.
The critics contend that U.S. farmers are receiving from $1 to $1.60 a bushel more for winter wheat than their Canadian counterparts.
The wheat board disputes that.
Lawrence Klusa, the board’s commodity risk manager, said the Aug. 4 price for CWRW Select 11.5 percent protein at Emerson, Man., was $3.87 per bu.
For U.S. hard red winter 11.5 percent protein at Devils Lake, N.D., the price was $3.94 a bu. in Canadian funds.
“You can’t truck to Devils Lake for seven cents a bu., so you’re better off dealing in Canada,” said Klusa. “There is no premium in the U.S.”
If the price difference between Canada and the U.S. was anywhere near $1 a bu., then winter wheat producers could be locking in U.S. prices through CWB contracts and moving it into the U.S. through the producer direct sales program. That’s not happening, said Klusa.
“They’re spouting about higher prices but no one’s taking it across the border,” he said. “It’s not real. It’s all just driven by politics.”
His only explanation is that people may be comparing the board’s pool return outlook for generic No. 1 CWRW with a U.S. high protein product.
“That is not going to be favourable for Canada because the straight grade is not very highly regarded by millers in Canada or the U.S.,” he said.
“The proper comparison is with Select.”
Critics have voiced other complaints about the board’s winter wheat program:
They say the board must do a better job marketing and promoting winter wheat and targeting high value markets.
They also say Ontario does a better job selling winter wheat to U.S. and overseas buyers. The board maintains that Ontario sells mainly soft wheat, and generally disposes of it at rock-bottom prices, such as a recent sale of soft white winter to Egypt for $146 a tonne in-store.
