What is in this article?:
- Dramatic change in wheat marketing coming this year
- Buyers must specify quality
- After nearly three quarters of a century of total control over milling wheat in the west, CWB's monopoly will end as of Aug. 1, 2012.
- Canada's wheat and barley farmers will now have the freedom to market their grain to whomever they choose.
Buyers must specify quality
Buyers will need to specify their quality needs more carefully in their contracts.
Multiple sellers means that products offered may differ as well.
A few buyers will see cheaper Canadian wheat prices than before, relative to comparable U.S. wheat prices, but many will see an increase as Canadian wheat market prices equalize with comparable U.S. values.
We look forward to the end of the CWB's administrative pricing and the many trade distortions it has caused in the international marketplace. We expect Canadian wheat will maintain a strong market presence, but with the open market guiding it to its destination far more fairly and efficiently than when under CWB management.
In the long-run that will benefit both users and producers of Canadian wheat and producers and exporters of U.S. wheat that have long suffered from arbitrarily discounted board prices in selected markets.
An important question to us is, “How will this affect U.S. wheat producers?” There are still key issues to be resolved, such as Canada's strict variety registration regime and other barriers to U.S. wheat moving into Canada.
Some of our international customers may not realize that the United States is already Canada's largest wheat export customer, but in a truly open market some wheat would indeed move north as well as south across our long border.
As one U.S. wheat producer who farms near the border put it, “I’d rather compete directly with farmers than with the CWB.”
In the future, we may see more Canadian wheat moving through the United States to our export ports and some U.S. wheat moving through Canada.
If the bilateral border barriers can be fully resolved, it is logical the United States and Canada will soon integrate into a single North American grain origination market.
Having urged the monopoly’s demise for so long, we at U.S. Wheat Associates (USW) are eager to to see it happen and hope any disruptions will be minimal.
Together with the U.S. Government, we are working toward that end. Properly managed, this change can benefit all the key parties: Canadian producers, U.S. producers, buyers and the trade.
We congratulate western Canadian producers on their newfound marketing freedom, and we congratulate the Harper Government for making it happen.