One year after CWB

NEWS RELEASE

One year after CWB, private market fails farmers

(Regina, August 1, 2013)  “A year after the end of the single desk Canadian Wheat Board it is clear western farmers are no longer receiving the full value for their grain.  It is also clear most of the missing value is being taken by the private grain trade,” Bill Gehl, chairperson of the Canadian Wheat Board Alliance remarked on the one year anniversary of the loss of the Board.

“The 2012-2013 crop year is very much like the past 2010-2011 crop year where corn is in short supply and feed grain prices have risen.  The big difference is that when farmers used their single desk Canadian Wheat Board we got a $2.78 per bushel premium for high protein wheat (between 11.5% and 15.5%).  Today those premiums are largely missing in action” Gehl pointed out.

Gehl also noted another worrying change in Canada’s grain industry.  “Our major customers, including the Chinese and Japanese food agencies are now on record as complaining the private trade is not providing the same level of quality and customer care that our farmer-controlled Wheat Board did.”

“Ending the single desk threw away our international market niche of supplying the highest quality wheat and durum to the richest markets on the planet.  With the almost complete loss of protein premiums, western farmers are receiving what every other farmer gets from the lower end of the global grain market.”

“The private trade now takes ownership of our grain at the inland elevator and is free to take any higher protein premiums for their own profit while farmers are seeing higher freight and handling costs deducted for getting grain to customers.  It is no surprise we have seen a gold rush of takeovers and consolidation in the private grain handling and marketing sector to take advantage of farmers’ loss of market power.  The essential disappearance of protein premiums to farmers over the past year speaks for itself” Gehl said.

While prices this year have been better than expected Gehl is concerned these prices are masking the true reality that farmers face.  “Farmers who think this year’s apparently higher grain prices are the result of ending the Wheat Board are living in a fool’s paradise.  Grain prices are generally higher because the United States has suffered the worst drought and production failure since the 1930s.  When production reverts to normal, western farmers will find themselves facing a new and harsh reality” Gehl concluded.