Western Canadian durum growers are facing comparatively low returns and limited delivery opportunities this year under the Canadian Wheat Board’s restrictive monopoly.
The Canadian Wheat Board’s projected pool return for #1 durum (13.0% protein) now rests at $8.51 per bushel, basis Alberta , which is more than a dollar per bushel, or 12% below comparable U.S. prices. The elevator price in the “Golden Triangle” region of Montana has averaged Cdn $9.71 per bushel thus far in the current crop year.
“The CWB monopoly is costing me and other farmers a bundle,” says Stephen Vandervalk, Alberta Vice President for the Western Canadian Wheat Growers Association. “Not only are we forced to accept lower returns but we aren’t even allowed to deliver all our durum.”
In the current crop year, the CWB has accepted 74% of the tonnage amount contracted by durum growers. The CWB has indicated that it does not intend to make any further durum contract calls for the remainder of the crop year, ending July 31, 2009. This means that prairie farmers will be required to carry over their food quality durum into the next crop year or sell it into the lower-priced feed market.
The prospect of carrying over durum supplies means that farmers will incur extra storage costs. It also means that farmers will have to wait until December 2010 to receive full payment for their 2008 durum crop. Many farmers who purchased crop inputs in the fall of 2007 for their 2008 crop will end up paying interest on loans for over three years while waiting for the CWB to market their grain.
The Wheat Growers believe the decision on whether to carry over grain inventories to the following year should rest entirely in the hands of the individual farmer. The prairie region is the only area of Canada where farmers are compelled to carry over wheat supplies by a monopoly imposed by Parliament.
“CWB employees should not have the power to restrict my grain sales and limit my earnings,” says Cherilyn Jolly-Nagel, Past President of the Wheat Growers. “The decision to hold inventory or not is a basic business decision that should be left in the hands of the farmer.”
In a letter to the Hon. Gerry Ritz, federal Minister of Agriculture, the Wheat Growers are calling on the Minister to give prairie farmers the ability to sell directly into milling markets that portion of their 2008-09 CWB durum contracts that remains unaccepted by the CWB.
