THE NEW NEXUS:
PLANTING CORN:
Climate change, energy and water » Pg 22-23
Making every seed count » Pg 33
MARCH 27, 2014
SERVING MANITOBA FARMERS SINCE 1925 | VOL. 72, NO. 13
Canadian Grain Commission seeks fairer funding model One-third of the production is paying twothirds of the costs
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MANITOBACOOPERATOR.CA
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Transportation crisis boosts grain company profits There’s an extraordinary difference between country and port prices
By Allan Dawson CO-OPERATOR STAFF/ SELKIRK
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new checkoff on grain deliveries might be a fairer way to fund the Canadian Grain Commission (CGC), says assistant chief CGC commissioner Jim Smolik. But he is open to suggestions. “I think the simplest is a dealer point deduction,” Smolik told Winter Cereals Manitoba’s annual meeting March 12. “Is there a better model, something that you guys see as fairer?” As of last Aug. 1 the CGC, the government-mandated grainSee CGC on page 8 »
A farmer blows a path in to some of his grain bins, but with industry officials now predicting this year’s backlog of grain movements pushing well into 2015, it’s not clear when he’ll be hauling the grain out. PHOTO: JEANNETTE GREAVES By Allan Dawson CO-OPERATOR STAFF
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armers unable to move crops this winter have had plenty of time to notice the difference between what grain companies are paying in the country and selling for off the West Coast. “Our calculations demonstrate the grain companies have taken over $1.6 billion in excess profits from wheat alone so far this crop year,” said CWBA spokesman and former Canadian Wheat Board director Kyle Korneychuk last week. University of Saskatchewan agricultural economist Richard Gray independently reached a similar conclusion after compar-
ing prices in the country, where elevators are plugged, against export sales at West Coast ports where prices are in some cases double. The result is unprecedented grain company margins, despite what is expected to be record demurrage costs. The CWBA estimates grain companies are earning almost $169 a tonne in excess profit from wheat, based on exports of 9.7 million tonnes to date. (See sidebar for calculations.) Gray’s calculations put company profits at $160 per tonne. “These record-high basis levels (gap between futures and elevator prices) are costing farmers $100 to $200 per acre in forgone revenue and several billion dollars in total,” Gray wrote in an op-ed piece
published in this week’s edition. “At the same time, these margins have substantially increased the bottom line of grain companies and processors (and they) will likely post record profits this year.”
Question the numbers
The Western Grain Elevators Association denies grain companies are profiting from the transportation crisis. “Grain companies don’t make money if they can’t move grain,” executive director Wade Sobkowich said in a statement. “We question the numbers put forward by the CWB Alliance.”
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For more information call: Cory Bourdeaud’hui 1.204.390.2340 Javan Davis 1.306.590.8600 Jim Vancha 1.306.951.7008 UAP at 1.800.561.5444 www.gowanco.com
See GRAIN PROFITS on page 6 »