March 5, 2012

 

 

To be able to move the Canadian Wheat Board's (CWB) 2012/13 grains through Cargill's grain elevators and port facilities, an agreement has been made between CWB and Cargill, CWB said on Thursday (Mar 1).

 

The Wheat Board will lose its wheat and barley marketing monopoly in August for the next harvest, leaving it to compete to buy farmers' grain against companies like Cargill, Viterra and Richardson International.

 

The CWB lacks country elevators and port storage space, while grain handlers are eager to secure as much volume as possible.

 

Canada is the biggest exporter of spring wheat and durum.

 

"We can now move ahead to provide farmers with an exciting package of programmes they can use with confidence in this new era," said Wheat Board CEO Ian White.

 

The board will begin buying farmers' 2012/13 grain through cash and pool contracts for autumn delivery within a few weeks, he said.

 

The CWB is also seeking similar deals with other grain handlers.

 

"Farmers will be pleased to hear this because they want to start making some (planting) decisions and lock in some prices for 2012," said Manitoba farmer Doug Chorney, president of Keystone Agricultural Producers.

 

Farmers in Western Canada begin sowing crops as early as mid-April.

 

The CWB's expertise in pooling - a marketing method that captures prices over a defined period of time - is also attractive to farmers, Chorney said.

 

"(It's) really tough to time your sales at the peak (price) all the time."

 

The president of Cargill's Canadian subsidiary, Len Penner, said its deal with the Wheat Board allows growers to use more marketing options through Cargill.

 

US-based Cargill, the third-largest Canadian grain handler, has 30 grain elevators across Western Canada, along with port facilities at Vancouver, Thunder Bay, Ont., and Baie Comeau, Que.