CWB vice-president of grain procurement Gord Flaten says it’s mostly just growing pains and the system will work
Some grain handlers are refusing to accept CWB grain deliveries and promising better grades to farmers who bypass the new voluntary board, farmers said during a recent conference call with CWB officials Oct. 17.
During the conference-call meeting with more than 3,200 farmers, an Alberta producer (who identified himself only as John) said elevator employees in Medicine Hat, Stettler and Oyen, Alta., told him they would not be accepting CWB grain.
“I’d like to deliver my grain through the Canadian Wheat Board but if I can’t deliver it, I don’t have any choice,” said John.
“They’re all saying the same thing: ‘We’ve got lots of sales for our own grain so why would we take wheat board grain in when we don’t have rail cars for it right now?’”
Dual-market skeptics predicted these kinds of issues would surface when the new company relies on competitors to handle its grain.
A Saskatchewan farmer named Carl said be went to a Viterra and Pioneer elevator and was told they couldn’t accept CWB grain because the CWB hadn’t set a basis. Gord Flaten, the CWB’s vice-president of grain procurement, responded that grain companies, not the CWB, set elevation and freight charges.
In a later interview, Flaten said he has previously heard similar complaints, and acknowledged that, in some cases, companies are favouring their own grain.
“We recognize there’s an issue out there at a number of elevators, but I also don’t want to blow it out of proportion either,” he said. “There are lots of farmers getting their contracts signed and they’re making their deliveries, and things are going to work well.”
In another example, a farmer from Wawanesa, Man., said an elevator manager told him he’d get a better grade and price if he sold to him instead of the CWB. Flaten noted farmers can still get an official grade from the Canadian Grain Commission. He also stressed that farmers can shop their CWB pooled grain around to different companies to get the best deal on grades, freight and elevation.
The basis between different elevators handling CWB grain has varied by as much as $8 a tonne, but farmers can get help with this issue by contacting the new CWB, said Flaten.
“In fact we really want farmers to phone us so we can share that information,” he said. “That’s one of the helpful roles we can play — being a good source of information on things like that, that’s going to help farmers get a better deal.”
Sometimes grain companies won’t want to handle CWB grain, but another company will because it makes them money, Flaten said.
“It worked well for decades (under the monopoly) for handling companies to handle CWB tonnes,” he said. “It can still work well.”
Nevertheless, the CWB is thinking about buying some of its own handling facilities. “But it’s not likely something we’ll do this winter,” Flaten said.
More than 1,000 early CWB pool contracts have been delivered and 25 per cent of that grain has been moved, he added.
“We have a really good sales book right now all the way through Christmas and beyond so we are going to be moving a lot of grain,” he said. “There are going to be delivery opportunities coming up for sure.”
Some of farmers’ concerns stem from not being able to get a firm commitment on when they’ll be able to deliver, Flaten said. In the past, farmers signing a CWB contract knew when they’d deliver during a three- to four-month period. But as was the case during the monopoly, the CWB will supply grain to its customers throughout the crop year and that means some farmers will be delivering grain later. But Flaten stressed that anyone in the pool will be able to deliver their grain before the end of the crop year. Farmers will also be paid storage of 3.3 cents per tonne per day starting Feb. 1.
Later this crop year the CWB will explore marketing pulse crops, president and CEO Ian White said.
The CWB already has a canola pool, and 45 elevators across the West have agreed to take delivery of canola for the company. But more would be welcome, Flaten added.
“I think Year 1 is a bit of a test to see what level of interest is out there,” he said. “The other thing with canola, the yields are lower than what farmers expected. So they may have pre-sold a greater portion of their crop than they realized.”
The CWB has no immediate plans to sell itself to another grain company, White said.
“Our plan is to find ways of having farmers as shareholders and maybe some other companies as shareholders as well and looking for sources of capital,” he said.
“We aren’t out there necessarily just to make profits from marketing grain, we’re out there to make sure farmers have the best contracting options they possibly can and provide some additional competition in this marketplace, which has been changed now and will be forever.”