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CWB books $6 billion in revenues for 2010-11

Prairie wheat and barley growers saw payments of about $5.5 billion for their deliveries to the Canadian Wheat Board during the 2010-11 crop year.

The CWB released its annual report for 2010-11 Feb. 21 showing $6.071 billion in combined pool revenue, with $3.792 billion paid out to pool participants, another $1.709 billion paid out through producer payment options (PPOs) and another $11.5 million to cash trading participants.

That’s up from $5.149 billion in total CWB revenues in 2009-10, from which $4.279 billion went to pool participants, $278.2 million to PPOs and $6.1 million to cash trading participants.

In the report, CWB CEO Ian White described the 2010-11 total payout to producers as the board’s fourth-highest on record, “despite the fact that the 2010-11 harvest produced one of the smallest and lowest-grade crops on record after a disappointing weather pattern for most of the growing season.”

Record rainfall, he wrote, led to millions of unseeded acres, delayed crop development and damaged harvest quality, while “significant rail transportation problems,” some of which were related to the heavy rainfall, “resulted in additional challenges for marketing the crop.”

The board’s total receipts of grain for 2010-11 included 13.668 million tonnes of wheat, down from 15.603 million in 2009-10. Durum receipts for 2010-11 totalled 3.965 million tonnes, up from 3.414 million in 2009-10.

Designated barley receipts were also down in 2010-11 at 681,100 tonnes, compared to 1.445 million in 2009-10. Feed barley pools A and B totalled 299,000 and 153,000 tonnes respectively, where no feed barley receipts were booked in 2009-10.

The CWB’s cash trading business, meanwhile, accounted for 735,200 tonnes of grain in 2010-11, up from 593,800 in the previous crop year.

Limited supplies

The CWB’s total exports for 2010-11 were 15.8 million tonnes of wheat, durum and barley, which White described as “the lowest volume in six years and three million tonnes below the previous year’s decade-high export total.”

One of the biggest challenges in 2010-11 involved moving Prairie grain to port, he said. “Sourcing, segregating and transporting grain were extremely complex due to factors including Canadian Pacific Railway performance problems, bad weather that hampered farmer deliveries, and limited supplies of high-quality grain.”

On the other hand, the CWB was able to generate direct savings of $35.1 million through commercial grain-handling contracts, White wrote.

The board also shipped a near-record number of producer cars, which White said led to additional savings of $14.5 million for producer-car users. The CWB was also able to move 600,000 tonnes of wheat through the Hudson Bay port of Churchill, Man., marking its second-highest volume since 1977.

In the malting barley market, he said, “the main issue was finding enough selectable barley on the Prairies to supply both the domestic market and traditional export customers.”

The CWB, he said, “successfully worked with customers to maximize acceptance of additional barley with lower-than-normal malting quality specifications.”

Malting and feed-grade barley prices also saw support during 2010-11 from “tighter world barley supplies and higher world feed prices, driven by tight supplies of U.S. corn.”

Costs, expenses

Against the CWB’s $6.071 billion in revenues the CWB booked $1.665 billion in grain purchases, $258.4 million in freight costs, $172.5 million in terminal handling costs and $99.4 million in inventory storage, plus other direct expenses for net revenue of $3.84 billion.

Along with that net revenue from operations, the board also reported $22.82 million in interest revenue and $265.16 million in other income such as recovered freight costs and lease revenue from CWB-owned hopper cars.

Against its net revenue, the CWB booked $72.28 million in administrative expenses, $14.94 million in interest expenses, $18.1 million in depreciation and amortization and $2.765 million in expenses related to grain industry organizations, among other expenses — for net earnings of $4.02 billion.

Events of the 2010-11 crop year took place before the federal government’s introduction in October and passage in December of Bill C-18, making sweeping changes to the CWB’s governance, business structure and operations and ending the board’s single marketing desk for Prairie wheat and barley.

About the author

Editor, Daily News

Dave Bedard

Writer and editor. A Saskatchewan transplant in Winnipeg.

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