(October 8, 2013) Now that the Canadian Wheat Board is gone, how long will it be before the lights are turned off for export grain handling from Canadian ports? It may be sooner than many think.
Some years ago, when Lorne Hehn was the chief commissioner of the Canadian Wheat Board he examined alternative ways to get CWB grain to international markets. Moving grain across the prairies and over seven mountain ranges to the Pacific is expensive and so is loading grain into Lakers at Thunder Bay and then trans-loading it into deep water ships in Quebec.
He found a much cheaper alternative for the eastern prairies: down the Mississippi River to the Gulf coast. However there was no ability in the American system to segregate our higher quality grain or to provide quality assurance guarantees to our international customers. So any transportation savings were more than offset by the loss of the quality premiums for farmers.
That was then. Without the CWB single desk quality assurance is largely irrelevant to the private trade if for no other reason than the CWB is no longer there to set the bar. So the recent announcement by Louis Dreyfus that it intends to spend $150 million to create a world scale grain terminal in Louisiana on the Mississippi river comes as no great surprise. Those transportation savings found by Mr. Hehn are now potential profits for the owners of Dreyfus (astutely managed by the female heir to the family company).
When this facility is up and running, the Lakehead via Thunder Bay, Baie-Comeau, Montreal, Quebec City, and Trois-Rivières become largely irrelevant to western grain exports. Some high quality milling wheat for the Warburton bakery in England may still move through Churchill and the Lakehead but that volume is small.
For the central and western Canadian prairies Riverland Ag is among several companies looking to cash in. Riverland is developing a rail facility at Northgate, Sk. just north of the Canada-US border which they claim will be capable of handling forty million bushels of grain per year, running it south into the US for export or processing. Riverland’s owner, Ceres Global Ag Corp observes in its Annual Report:
“Riverland Ag is well positioned to benefit from this strategic shift of processing companies and is equally well positioned to benefit from increased North/South flow of grains as a result of the removal of the Canadian Wheat Board marketing monopoly in Canada.” (hyperlink added)
Couple all this with the just completed expansion of the giant $200 million grain terminal at Longview, in Washington State and the fact our railways are now both owned by US investment companies and you have to ask when the lights will go out for grain transportation in Vancouver and perhaps Prince Rupert as well? How soon will the jobs of Canadian stevedores, rail workers and others follow all those lost in grain inspection, marketing, scientific research, plant breeding and food inspection which have been trashed by Ottawa already?
Conservative Ag Policy book – may not be exactly as illustrated
So thanks to killing the farmer controlled single desk Canadian Wheat Board we have more jobs for Americans in handling and processing Canadian grain, more profits for international grain companies, and a much smaller share of the grain trade pie for western farmers – what’s not to like – unless you are a western Canadian grain producer?
Video link
