New wheat board opens

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COLE BREILAND / WINNIPEG FREE PRESS In Tuesday's protest outside CWB headquarters, Matt Aiken (right) plays the former wheat board negotiating the best price for grain farmers.

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COLE BREILAND / WINNIPEG FREE PRESS CEO Ian White ushers in the new CWB era.

Today marks the dawn of a new era for the Canadian Wheat Board and the end of its decades-old monopoly on wheat and barley sales in Canada.

Board officials expressed confidence Tuesday the new CWB can more than hold its own in its new, competitive environment.

"We begin the new era in a position of strength and a climate of optimism," CWB president and CEO Ian White told reporters as the board unveiled a colourful redesign of its logo and announced it has reached a grain-handling agreement with another major grain company, Louis Dreyfus Canada Ltd.

"We have a brand-new look, a solid business model and the support of thousands of farmers who have told us they intend to market grain with the CWB," White said. "That makes the future bright."

Although he refused to reveal how many farmers have signed contracts with the board, he said it expects to handle 35 to 40 per cent of this year's wheat and barley crop.

Nearby, about 25 protesters donned top hats and brandished sheaves of wheat while declaring their opposition to the wheat board's loss of its monopoly on Prairie wheat and barley sales.

"Citizens need to take (the board) back, people need to take it back and recognize their role to speak out," said Dean Harder, the protest's organizer and a farmer from Lowe Farm, about 85 kilometres south of Winnipeg. "We want to explain what the decision means and make it clearer to citizens."

The protesters playing the farmers took their wheat to the person representing the former wheat board, who got a fair price from the grain companies -- men in top hats. But after the wheat board disappeared, gambling tables were set up where farmers lost the best prices for their wheat.

White told reporters at the news conference that while he understands the protesters' concerns, it's too late to turn back the clock and return to a CWB monopoly.

"That's a previous era... and the times have changed and the legislation has changed," he said. "We have to move on with our business, and that is what we are doing."

White and other board officials said the transition to an open-market system, where Prairie farmers can sell their wheat, durum and barley to anyone they like, comes at an interesting time.

The board estimates Prairie farmers are looking at their biggest crop in more than three years. Grain prices are at near-record highs and could climb even higher because of a severe drought in other key grain-producing markets, including the United States and eastern Europe.

The CWB said it expects western Canadian farmers to harvest 24.2 million tonnes of wheat this year, 4.5 million tonnes of durum and eight million tonnes of barley. It said that's a significant improvement from the 22.7 million tonnes of wheat, 4.2 million tonnes of durum and 7.3 million tonnes of barley harvested in 2011.

It also released its latest sales figures for the 2011-12 crop year, which ended Tuesday. The board said it's expecting one of the highest farmer payouts on record, at about $6.3 billion.

The CWB said that during the last crop year, it exported about 18.1 million tonnes of grain, including 13 million tonnes of wheat, 3.6 million tonnes of durum and 1.1 million tonnes of barley. Within Canada, it sold 2.15 million tonnes of wheat, 225,000 tonnes of durum and one million tonnes of malting barley.

The federal government forced the controversial switch to a free-market system when it passed legislation last December ending the CWB's 75-year monopoly on the sale of those crops as of Aug. 1 -- the start of the new crop year in Canada.

Board officials and their supporters cried foul, warning it could kill the CWB because it doesn't have its own grain-handling infrastructure, such as grain elevators and port terminals, as most of the big grain companies do.

But White said when the government pushed ahead and enacted the legislation, the board began to prepare for the new reality by downsizing and streamlining its operations and forging new partnerships with the grain-handling companies.

It also began aggressively courting Prairie farmers by unveiling a number of pool and cash options for producers of milling wheat, malting barley and feed barley and revealing its plans to launch a canola pool in the near future, and possibly a peas and lentils pool.

Those moves gave the CWB the only price-averaging pool options on the market -- a feature that guarantees farmers will get a price that averages out the highs and lows in a volatile market.

White said the addition of Louis Dreyfus's 10 high-throughput grain terminals in Western Canada, including two in Manitoba, gives CWB customers 130 locations in the West where they can deliver their grain.

Board officials are confident they will soon reach similar agreements with the remaining grain companies, including Richardson International Ltd., Parrish and Hembecker and Paterson Global Foods.

murray.mcneill@freepress.mb.ca

-- with files from Jenny Ford

Republished from the Winnipeg Free Press print edition August 1, 2012 A3