Open market
The Canadian Wheat Board operates in a dual market environment for feed barley now. Extending this policy to the malt pool and the export market will not affect the viability or the operations of the CWB at all.
The changes required to allow direct malt company buying from producers is a policy decision at the board of directors level. No changes to legislation are required. This is highlighted by the change in wheat procurement policy of the CWB for small flour mills allowing for up to 500 tonnes to be purchased directly from producers. This was done on a whim at a regular board meeting in November. There was no consultation, no notice, no vote. The board just said this is the new policy, and it is completely within the CWB Act to do so. …
Read Also
Agriculture needs to prepare for government spending cuts
As government makes necessary cuts to spending, what can be reduced or restructured in the budgets for agriculture?
Another example is the export manufacturers feed agreement. Feed mills buy feed barley directly from producers, which they can process and export.
With the recent run up in domestic feed barley prices, the CWB is now out of the feed barley business altogether. The bungling of the malt barley market is going to put the CWB out of the malt business as well.
Maltsters took advantage of the CWB’s early bargain basement offers for malt barley and now farmers are expected to deliver malt barley at less than cash feed barley prices. The CWB can’t raise the PRO because of the low prices they have sold for and can’t make new sales because they can’t get anyone to contract at below the feed grain price.
A lot of contracted malt barley has gone out of condition, but there is no shortage of good malt barley. Rather than forcing malt companies to look off shore for higher priced replacement supplies, the CWB could allow malt companies to buy directly from farmers.
But the self-serving CWB would rather force maltsters out of the country than admit to its own marketing incompetence and allow farmers to receive higher prices on their own. This shows the failure of the single desk system to function in a rapidly changing market. Farmers lose out because the system cannot move to take advantage of price increases but locks farmers into low prices without a mechanism to hedge to cover price increases.
A functioning open market would supplement the CWB pooling system, farmers, industry, domestic and export markets and the CWB would all be better off, because we would all bring our strengths to the table rather than having our legislated weakness exploited.
– Douglas McBain,
Cremona, Alta.
No tampering
Recently, Canadian Wheat Board minister Chuck Strahl fired (CWB chief executive officer) Adrian Measner, in opposition to the CWB directors. Adrian Measner was highly respected and trusted, not only by Canadian grain producers, but also by importing countries around the world. Countries such as China spoke out against his dismissal.
The new CEO, Greg Arason, was appointed by Chuck Strahl. He is to be paid $30,000 per month. This salary is to be paid out of grain producers’ pockets.
Chuck Strahl’s appointment as minister of the CWB was made by prime minister Stephen Harper, whose sole objective is to destroy the CWB. These men both know the detrimental effects to the Canadian grain producers but are dedicated to the multinational corporations, who would gain millions of dollars annually and grain producers would be the losers.
The opposition parties in Ottawa are opposed to the tampering and destruction of the CWB, along with a large percentage of farmers who are producing the grain.
In the last few years, farmers have been producing their grain below the cost of production.
For the minister of the CWB to even tamper with the CWB will only add to further losses of our producers and should be a criminal offence.
– Bill Howse,
Porcupine Plain, Sask.
More information
Are we living in a free country?
If we are to give the farmer the freedom to sell his own grain the way he wants to, do not put them in jail. So if this is the case, we do not need a vote on the CWB.
If we are going to be voting, make the CWB come clean and help the farmer to decide. If the CWB sells wheat or barley, make them tell the media and the farmer for how much a bushel they sold it for and how much will the farmer get in his pocket.
Usually the CWB makes big announcements, “we sold multimillion dollars worth of wheat or barley,” that means nothing and is very misleading. Remember when oats was under the CWB, the farmer got 50 cents or less. As soon as it got off the board the farmer got $1.50 or more. The CWB should also tell the media and the farmers how much it costs the farmers to operate the CWB annually.
– James Wyne,
Melfort, Sask.
Stalin laughs
As an individual who loves ironic humour, nothing could be funnier/sadder than listening to the braying mob telling everyone how democratic it is to legally force a farmer to sell his product to an arm of the government.
Stand and look in the mirror and say that to yourself 20 times.
Do they realize how insane that is? Why not force everyone in this country to sell everything they create to the government? What is the difference? Can anyone tell me?
Stalin must be laughing in his grave. I’m not a farmer, but having millionaire commies and their minions dictate who can sell what is about as close to communism as you can get, period. Orwell’s Animal Farm indeed. Forced labour camps anyone?
– Kirk Furniss,
Vancouver, B.C.
Fair questions
The three questions (federal Agriculture) Minister (Chuck) Strahl has introduced for the barley plebiscite and the (Canadian Wheat Board) are very honest, fair and real questions.
Questions that were not given to producers from the government of the day that forced all producers into the CWB’s iron-fisted monopoly back in the days of its inception. Remember the days when producers trying to freely market their own products were jailed for being free traders in a free country?
The fear mongering that is being promoted by the National Farmers Union and supporters of the left wing groups is nothing more than the claws of socialism trying to drag all producers down to a level of incompetence in world trading that has absolutely no place in the 21st century.
This kind of mentality does not and has never promoted any value added gains, transportation efficiencies or producer drive for improvements in our industry.
The decision for choice in grain marketing in the 21st century is one that has merit and simple common sense.
The time has come for agri-business to join the rest of the free world in trade and economic freedoms, not to be trapped behind the government boards that have stalled producers and value added companies from growing and improving this industry and adding to each citizen’s quality of life in this country.
– Lorne Ridgway,
Avonlea, Sask.
Underground power
There is a simple solution to the problems associated with building new power transmission lines. Put them underground.
Landowners are increasingly resistant to more and more large towers and overhead lines strung across their landscapes and over their homes. Aside from the inconvenience of farming around them and the obstruction of views, there are concerns about the health effects of electromagnetic fields.
Overhead lines also have higher maintenance costs. Some studies show maintenance costs over 20 years exceed the cost of the original construction.
We now know that European countries have been burying their transmission lines at similar or less cost using the latest technology available. These new underground high voltage systems can be direct-plowed into existing right-of-ways (roads, railways, pipelines, canals, etc). The benefits are great – no visual side effects, no new right-of-ways, no electromagnetic fields, less maintenance, less failure and less environmental damage. More information on these systems can be found at www.abb.com/hvdc.
I believe we have the responsibility to future generations to use the best technology available for these projects. There are currently three major transmission lines underway in southern Alberta, all with opposition from those living under them.
Let’s stand up and demand that best practices are used everywhere in our country.
– Raymond Nadeau,
Fort Macleod, Alta.
CWB applause
It is with great concern that I watch the systematic and co-ordinated attack by (Prime Minister) Stephen Harper, (Agriculture Minister) Chuck Strahl and pro-choice groups funded by the Alberta government to dismantle the Canadian Wheat Board.
Their tactics violate the basic Canadian principles of democracy, fairness and honesty.
The Canadian Wheat Board, as it currently exists, is an organization that must be applauded for the innovative and progressive programs it has developed to extract premiums in the international marketplace for Western Canada’s grain farmers. Their ability to do so supports domestic grain markets. To deny this is a blatant disregard of fact.
The removal of the monopoly selling power of the Canadian Wheat Board would make it a nonplayer in the international marketplace. Chuck Strahl and his appointed directors’ attempt to convince Western Canadian grain farmers that a Canadian Wheat Board without monopoly selling powers would be strong and viable is naive and dishonest.
To have even the faintest hope of success, a revisited Canadian Wheat Board would require four things. It would require elevators. Presently, we have overcapacity and it is unlikely that the multinationals would sell us any of theirs. It would require a port facility. Again it is unlikely that our competitors would make theirs available. It would also require some type of influence with the railways and an international presence in the marketplace. It would have neither.
How do they expect an organization with $100 million to compete in the multibillion-dollar world of the international grain merchants?….
Do not be fooled, the trap has been baited and set, and we are one step away from falling into it.
There are only two choices in this sorry debacle. If we stay united our Canadian Wheat Board will continue to evolve and prosper, if we are divided we will be conquered. In the upcoming plebiscite make an informed and progressive choice, support one of the few remaining organizations that exists solely for our benefit.
– Doug Scott,
Waskatenau, Alta.
Beware the CWB
Saskatchewan and Manitoba farmers in support of single-desk – beware. If our present federal government is not successful in giving a huge number of farmers on the Prairies the freedom to market, you will see the demise of the Canadian Wheat Board. Agriculture Minister (Chuck) Strahl is not, as is widely contended, trying to bring down the Wheat Board. Instead, he has invited the CWB to be a part of transition and implementation of a market of choice.
In my opinion, the following is why the CWB will not exist in the future if forces for single-desk prevail.
In Alberta we have a commitment by the Alberta government for change. If no change is forthcoming federally, Alberta will give its producers change. An open market is going to happen in Alberta.
The reason we have a huge cattle feeding industry in Alberta is largely due to our government implementing the Crow Offset Program in the ’80s. That program paid the end user what the farmer had to pay to ship their barley to Vancouver. The results speak for themselves, a feeding industry to rival any in the world, and a market for the farmer’s barley that is consistently near the world’s highest prices.
In Alberta we have feedlots, packing plants, feed mills, distillers, millers, maltsters, crushers, sugar processing, spice mills, hay compressors, and more – all value-added industries. Manitoba and Saskatchewan have some of this but not on the scale of Alberta. Why? Because the climate for business in Alberta is what companies like to see.
Manitoba’s and Saskatchewan’s dabbling with socialistic, collective-minded governments is keeping you where you are.
That collective thinking of governments, the NFU, the Pools, and other farm groups is why no farmers in Western Canada received any compensation at the end of the Crow Rate. Seven billion dollars that had approval to be paid out was instead lost because of the above-mentioned groups opposing any change to the sacred Crow. Where are we today? We have no Crow, which is actually a good thing, but also we have seven billion less dollars in our pockets. Saying “no” to change of the single-desk will have a similar result.
I am a relatively small farmer by today’s standards, around 100,000 bushels. I have not sold a bushel of grain to the CWB for at least five years. I pocket the freight to Vancouver, the CWB administration, the elevation and cleaning, that has been as much as half the value of my grain. …
All farmers today have an abundance of information. We can see at a glance what the world is doing. The tools are there to price, to speculate if you want to, to hedge and protect your price. You are not getting what your grain is worth if you don’t understand markets and take control of marketing.
The secretive nature of CWB marketing makes it impossible to even know what the ask price is of your grain. …
I wrote these thoughts on the morning of Jan. 17, 2007, after reading the results of Manitoba’s vote on grain marketing choice (a question that begged the answer). At 5 p.m., I sat down to watch the Lethbridge local news. A top story – Dutch-based company has chosen Lethbridge as base for its first North American biofuel plant – obviously a researched position. But an obvious question, “Is the grain to feed the biofuel process going to have to be purchased through the CWB with the freight paid to Vancouver, the elevation and cleaning, and charge for administration?” I think those of us who are in this area already know.
That product is going to be purchased directly from the producers here and if we can’t keep up the supply, they will go to the Wheat Board designated area of Saskatchewan and Manitoba and purchase it for basically the same price, only the producer will have to deduct all the associated CWB charges. At today’s rates, he would receive about $1.50 per bushel less than his Alberta counterpart. I concede there might be a bit back out of the pool in a year’s time.
Forget about a vote for an open market being the demise of the CWB.
Only if the CWB is unresponsive to the world grain situation, only if the CWB is too bureaucratic, only if the CWB is not competitive, will it fail. If in fact it does fail, that is where it belongs. It’s not a vote for or against the CWB, but I am sure a vote for single-desk will be its end. …
– Lorne Cooley,
Pincher Creek, Alta.
Light in sight
Three cheers for Agriculture Minister (Chuck) Strahl.
Through 30 years of farming this farm has weathered terribly low prices, drought, hailstorms, floods, insect plagues, windstorms, blizzards and untimely frosts.
This farm has helped neighbours and neighbours have helped this farm, especially at times of accident or illness. Don’t tell me there are not 40 hours in a day because I have worked plenty of them. Bankers have been understanding and supportive and some haven’t. A large family is being raised and all the children are a credit to their parents.
Through all of this, the best financial light at the end of the tunnel is the hope we have that we will gain our marketing freedom through the brave efforts of Minister Strahl. The present system, like communism, has failed and needs a massive overhaul. High priced studies, empty promises of top notch performance, disciplinary action to those deserving, even on-farm durum audits looking for desperate farmers do not change the fact that it is time to courageously move forward with a new, accountable, transparent, marketing system.
I shudder to think of the implications of the fact that Liberal leader Mr. Dion states Quebec supports the CWB, but for over 60 years they have not wanted in on this gravy train. It is time to let accusations cease, tempers subside and for cooler heads and clearer thought to prevail. …
Thank-you Minister Strahl and Prime Minister Harper for having the courage to do what is right for agriculture and for the citizens of Canada. And after all the smoke clears, if you find you need someone to sell the wheat, call me. We can talk.
– John McKee,
Stirling, Alta.
Barley plebiscite
The upcoming barley plebiscite offers barley producers in Western Canada a once-in-a-lifetime opportunity to address the issue of how we want to market our barley.
This issue centres on what marketing model best fits producers’ needs to capture a price that covers off their production costs and returns a profit.
The (Canadian Wheat Board) claims that they garner premium prices for producers under their monopoly marketing structure.
The Richard Gray study appears to substantiate their claim. I do not know what sales figures Mr. Gray was using to substantiate their claim, but these fictitious premiums have not reached my farm.
Barley prices f.o.b. Shelby, Montana, in January of 2007 were $7.50 per cwt. This equates to $3.60 per bu. American or $4.25 per bu. Canadian net to the producer.
The malt price according to the CWB (Pool Return Outlook) is $205 per tonne, which after deducting freight and handling equates to $3.37 per bu. net to me.
If the CWB sells for premium prices, why is my malt barley selling for $0.88 per bu. less in our system?
The CWB’s ability to market feed barley is well documented and sadly lacking in showing its ability to return premium prices to my farm.
The CWB price for feed barley is consistently short of what I receive by selling into the feed market.
Again, I question what figures Mr. Gray was using for his study, as my experience calls into question the conclusions he arrived at to substantiate the CWB’s claims.
The CWB should quit squandering producer’s money on questionable studies to support their monopoly position and concentrate their efforts on marketing barley.
Until I see actual sales documentation from the CWB proving that they do sell for premium prices, no amount of economic study done by hired economists from the University of Saskatchewan will convince me otherwise. We need alternatives to market our barley and market choice will give that to us.
This question is directed to the CWB board of directors: Have you formulated a business plan which would enable the CWB to operate in a market choice environment? Your job as a director of the CWB is to guide and prepare the CWB to adapt to any market changes that occur.
It is time for this board to quit hiding their heads in the sand by saying that the CWB cannot survive in a market choice environment. They should be viewing the issue with a progressive approach as to how can the CWB change in order to be an effective marketer in a market choice scenario.
I would suggest that any CWB board member that is not capable of looking into the future and addressing the challenges of business with new and innovative solutions should resign and allow someone with these talents to take their place at the board table.
Your job is to put policy in place to enable the CWB to market grain and offer an effective marketing tool to producers under any marketing structure.
I will be voting for market choice. I encourage every barley producer to cast their ballot.
This is your chance, if you grow barley, to vote to change the system. This is not a time to be complacent – cast your ballot.
The poor CWB marketing performance and the misguided efforts of the CWB’s board of directors indicate to me that the future of my farm and your farms demand that change is needed and that change has to be Market Choice.
– Brian Otto,
Warner, Alta.
Gopher infestation
If an Irish entrepreneur has managed to sell 160,000 12-ounce bags of sanitized Irish soil to Americans for $15 US apiece (Editorial Notebook, Feb. 1, 2007), surely farmers with fields overrun by gophers can create a foreign market for their pesky rodents in parts of Asia where rats feature on menus.
Last month McDonald’s in China opened its first of 30 planned drive-through restaurants, in partnership with a major Chinese oil company to exploit the country’s growing taste for both cars and Western fast food.
A healthy dose of professional (public relations) should persuade the Asian chain to exploit gophers as a primary bun-filler: the grain fed rodents grow to a standard size requiring no trimming with consequent wastage.
Just as farmers lease their land to oil exploration companies, farmers could lease their gopher-infested fields to a middleman who would deal with the logistics of capturing the nimble nibblers and transporting their bitty bodies to an abattoir, thus ridding the countryside of the odour of rotting carcasses that results from plying strychnine, and eliminating the risk of collateral damage to predators such as hawks, crows, and coyotes.
As for production costs, gophers are far easier to raise than Herefords or hogs. In fact, they raise themselves, as every farmer is only too aware. Gophers need no fences, barns, or crop rotation. They don’t require hormones, vaccinations, or antibiotics. No one has to brand, tag, or dehorn them. Gopher poop is unlikely to pollute water supplies. Nor has a gopher ever trampled, kicked, or squashed a farmer to death, which makes them ideal livestock for seniors.
But, you ask, what happens if – after a year or two – market demands cull the population until nary a whistle is heard from a bald knoll?
Not to worry. According to a Dec. 11, 2006, article in The New York Times reporting on a rampant gopher problem in Kansas, remnants of a decimated colony tend to multiply quickly, especially during droughts. Which should surely guarantee an inexhaustible supply of fresh cuisine for China or any other market.
It’s time gopher-glutted Saskatchewan farmers heed the maxim, “When life hands you a lemon, make lemonade.”
– Claudette Sandecki,
Terrace, B.C.
Vote for choice
I am writing to inform producers how efficient a dual market for wheat and barley worked from 1935-1943. It was a strong tool that gave farmers choice. This system put farmers right in the driver’s seat. They were able to determine what was best for them and their farms. Choice and competition was very good for the producer and this system worked very well.
The monopoly to sell wheat and barley was created by the federal government in 1943 to keep export sales of wheat to Europe and the domestic price of bread low.
Wheat prices on the open market were rising rapidly. The Canadian government had promised wheat at a fixed price to Europe.
Therefore, every time the wheat price rose by one cent per bushel on the open market, it cost the federal government $2.5 million.
This was draining the federal treasury. Therefore, the government stopped the trading of wheat on the Winnipeg Commodity exchange on Sept. 27, 1943. It froze the export price of wheat at $1.25 per bushel and the price to the domestic miller at 77 cents per bushel.
The federal government created the urban legend that they were protecting the producers from the grain merchants, while in reality it was that the wheat board monopoly was the key component of Ottawa’s cheap food policy. This was done on the backs of the Western Canadian farmers.
The historic reality is that the CWB was established not to serve and protect farmers but to force them to deliver their wheat to the government at a price the government was prepared to pay.
The wheat board monopoly is a total injustice to all producers. Not only does it keep food cheap, it also takes away individual freedom when producers market their wheat and barley.
Recent studies done by the George Morris Centre concluded that the CWB monopoly restricted Western Canada’s economic growth by $300 million to $1 billion per year.
In addition, removing the monopoly would stimulate the value-added industry to a tune of $1.4 billion to $2.8 billion per year, growing employment in the added-value industry from about 8,000 people to approximately 13,000 to 25,000 people.
The potential for economic growth and job creation by eliminating the CWB’s monopoly is huge. Producers will become the prime economic driver of the industry.
Let’s make some positive changes in the upcoming barley plebiscite by voting for choice. Let producers take back control of their own affairs. It’s a long time overdue.
– Charles Anderson,
Rose Valley, Sask.
Under attack
CWB’s (Canadian Wheat Board) single desk is under attack.
The latest combined efforts by our government and corporate leaders to undermine democracy to destroy our farmer’s single desk seller of grain is stunning at best.
And now they have muzzled the Wheat Board’s ability to defend itself against this onslaught …
This idea that farmers create a surplus is a lie perpetrated by the multinationals that stand to benefit from low farm prices.
Every ounce of farm production gets consumed worldwide and there are starving people in this world. So where is the surplus?
Truthfully, there never has been and never will be a real farm surplus.
A cost of production plus profit price means a parity price. There I said it – no one else will – and it needs to be looked at.
It means a parity price bill must be enacted for family-run, independently owned farms.
This parity must be in the form of a floor price set by a panel of farmer representatives, such as what we have in our present Canadian Wheat Board. The Canadian Wheat Board is the only type of agency with a single desk seller that could have the power to make the corporations pay the price without a taxpayer subsidy …
The Wheat Board is the only thing standing in the way of multinationals forming a de facto single desk buyer of farmers grain with the purpose of lowering prices even lower than they are now. A far different scenario than the farmer having the single desk seller on his side.
If anyone is opposed to the present government’s dismantling of the Wheat Board single desk, they should write to their MLA, (copy) the Minister of the Wheat Board, Minister of Agriculture and the Prime Minister – expressing their views before it’s too late. Once they change it, it’s too late, you can’t go back to a state-trading agency because of Section 11 of the free trade agreement. It would be illegal.
If they still refuse to back down on their plans to create a dual market, we must have a massive “On to Ottawa trek” to force them to change their minds.
If it’s about freedom, where is your freedom to sell canola, flax, etc. on the Wheat Board’s single desk pool should you choose to do so?
We must convince Chuck Strahl to reverse his plan. We have a choice now. Our grandchildren won’t have that choice if we don’t do the right thing today.
The opposite to parity is disparity. Which one will we choose?
– R. E. Kennedy,
Simpson, Sask.
Where’s the beef?
Remember the elderly grandmother that ordered the hamburger at a fast food outlet, and hollered “Where’s the Beef?”
Well, there are hundreds of wheat farmers hollering, “Where’s the money?” With feed grains doubling in price, corn prices expecting to be at $5 for 2007 fall delivery, canola market at all time high, what has happened to the wheat and durum market.
The latest Pool Return Outlook from the Wheat Board is an insult to western wheat producers. What did the sales department at the Wheat Board do? Sell all of the high grade wheat and durum at fire sale prices? What other explanation is there?
No wonder the importers from around the world are sending testimonials in support of single desk, after all, we have the reputation around the world of “we sell for less,” and we have Wheat Board directors believing that single desk returns more to the farmer, give me a break, are they living in la la land.
If any grain farmer believes that single desk returns more to them, go to any commodity broker’s website and look around or better yet go to the DTN and check. We in Western Canada are so far behind we think were ahead. The last time this happened was in 1995 and ’96, we lost millions of dollars when we gave it away, and we are doing it again. If I were Ken Ritter I … would resign ….
What a great time to have a plebiscite on barley, you have to be either a devoted National Farmers Union or be on drugs to vote for the status quo. If we don’t learn from history we are bound to repeat it.
– Herb Axten,
Minton, Sask.
