Drop inproducer car loadings alarms CWB Alliance

It’s estimated about 9,200 producer cars will move through the system this year, a drop of nearly 40 per cent from a year ago

Loadings of producer cars in Western Canada have dropped by 40 per cent since the end of the Canadian Wheat Board monopoly on wheat and barley sales last summer.

That’s added at least $5 million to farmers’ transportation costs and shows new legislation is needed to ensure farmers can continue to load their own cars, said Bill Gehl, chair of the Canadian Wheat Board Alliance.

“Clearly the private sector is exercising its control over port facilities to undermine both (Agriculture Minister Gerry) Ritz’s crippled grain company that was cobbled together from the wheat board and the access farmers once had to port facilities,” said Gehl.

It’s estimated there will be about 9,200 producer car shipments by the end of the crop year on July 31 — compared to 14,341 in 2011-12.

But the drop isn’t “a big surprise or indicative of a big problem yet,” said Mark Hemmes, a consultant hired by Ottawa to monitor grain movement in the post-wheat-board era. There’s less of a financial incentive for farmers to use producer cars, he said.

In the days of the CWB monopoly, farmers could save about $900 in board fees by loading the cars themselves. As well, the board provided administrative services for shipments.

“When the new CWB started up they were up front with producers,” said Hemmes. “They would continue to buy and market grains offered to them in producer cars, but they would no longer assume any of the risk (in) transit, grading or contamination. The payment schedule would remain the same.”

At the same time, high grain prices make the option of selling directly to a grain company far more attractive than taking an initial payment from the CWB and then waiting months for a final payment, said Hemmes.

“The grain company offers an especially attractive price, and you get the cash upon delivery to the country elevator as opposed to the producer car option where you go through the hassle of getting the car, loading it and then waiting until the car is unloaded at the destination terminal and a sample has been graded,” he said.

Producer car loadings “surged at the beginning of the crop year but really tailed off towards Christmas and have been languishing since,” he said.

That’s because farmers are being undermined by the absence of the CWB monopoly, said Gehl. “When the Harper government introduced legislation eliminating the CWB monopoly, Ritz poured scorn on the concern that without the access to port terminals provided by the single-desk wheat board, producer cars would be at risk,” he said.

“These numbers show he was wrong.”

However, Hemmes noted the numbers for this crop year will still be above those from a decade ago, which averaged about 3,400 cars annually. Two facilities in Saskatchewan and one in Alberta have accounted for about 60 per cent of the loadings in recent years, he said.

The end of the CWB monopoly has also seen the arrival of a number of new exporters and grain buyers that don’t own loading facilities, said Hemmes.

“This means they either contract through the grain companies or they make deals with the producer loading companies,” he said.

He said shipments in these dealer cars “have grown substantially” and he hopes to start tracking them in the next crop year.

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