Prairie farmers will earn an estimated $5.8 billion on the sale of last year’s wheat and barley crop – one of the highest returns in CWB history – despite one of the lowest export volumes in a decade.
At the CWB’s annual crop year-end news conference , president and CEO Ian White said the 2010-11 crop year that ended July 31 was challenging for farmers and their marketing organization.
“The 2010 growing season saw record rainfall levels that left millions of unseeded acres, leaving a small crop with one of the lowest quality profiles we’ve ever faced,” White said. “This was frustrating for farmers and posed difficult marketing challenges, made worse by grain-movement issues that stalled farmer deliveries and affected the supply chain for much of the year.
“Our focus was to find ways to satisfy valuable, quality-conscious grain customers in Canada and around the world, while finding markets for the unusually large quantities of lower-quality wheat and durum that we needed to sell. On both those fronts, we were successful.”
The CWB’s estimated net returns for farmers of $5.8 billion are the fourth-highest in history, he said, noting year-end accounting is not yet complete.
The CWB exported about 15.8 million tonnes (MT) of wheat, durum and barley during the crop year, the lowest volume in six years and three million tonnes below last year’s decade-high export total. Wheat exports were 11.2 MT, durum was 3.4 MT and barley 1.2 MT.
Sourcing, segregating and transporting grain to port were extremely complex last year, White said, due to a number of factors – including CP rail performance problems, weather that hampered farmer deliveries, and limited supplies of high-quality grain.
For malting barley, the issue was trying to find enough selectable barley to supply both the domestic market and traditional export customers, he said.
Turning to the new crop year, White said the production outlook for 2011-12 predicts a slightly larger all-wheat crop than last year, and a million more tonnes of barley.
All-wheat production in Western Canada is forecast at 21.3 MT for 2011-12, up from 21.0 MT last year. Durum is expected to be 3.9 MT, up from last year’s 3.0 MT. Total barley production is forecast at 8.0MT, up from 7.0 MT from 2010-11. CWB production estimates for wheat have been raised by a million tonnes from initial projections in June, due to improved growing conditions as the summer progressed.
The CWB’s preliminary export target is 18.0 MT, back to previous high levels.
Allen Oberg, chair of the CWB’s farmer-controlled board of directors, said the new year may be the last for the CWB. The federal government is expected to introduce legislation this fall to remove the single desk by the end of the crop year on July 31, 2012.
“Whatever the future holds, one thing is certain,” Oberg said. “If the single desk is eliminated, the landscape of Prairie wheat marketing will change drastically. The CWB will end. If a new organization is created, it will bear no resemblance to the CWB that exists today.
Results of the CWB’s own plebiscite, held to provide farmers with a means to have their say, will be released on September 9. Oberg said the CWB’s farmer-controlled board of directors is calling on the federal government to respect the results and abide by the wishes of Prairie farmers.
“We as Prairie farmers are facing an uncertain future. The government intends to take our marketing power away. We have not been consulted, nor has there been any government analysis of the impact on farm families and the grain industry from dismantling an economic model that adds an extra half billion dollars a year for Prairie farmers.”
