Canada: End of CWB’s monopoly in August next year no sure thing - expert

While the Canadian prime minister has vowed to take away the Canadian Wheat Board's monopoly over sales of wheat and barley by August 2012, it's no sure thing, Mike Leslie, CEO of the Alberta Barley Commission told American barley growers on June, 21 in Great Falls, Greatfallstribune.com reports.

"Don't start dancing in your red shoes 'til you know the witch is dead,'" he said, noting that the Canadian Supreme Court rejected a similar plan three years ago.

U.S. barley growers who farm near the Canadian border, including outgoing National Barley Growers Association President Dave Henderson, who farms near Cut Bank, are concerned that allowing individual Canadian farmers to sell barley could flood northern Montana grain elevators with barley.

But the Montana Grain Growers traditionally supports eliminating monopolistic sales by the Wheat Board, which can be hard for individual U.S. farmers to compete against, said Lola Raska, the Grain Growers executive vice president.

Leslie said Canadian farmers within 100 miles of the border would truck their barley across the border to U.S. elevators for better prices for a year or so, but things will eventually even out when Canadian elevators raise their prices to meet U.S. rates.
He said younger Canadian farmers with larger acreage would like to market their own grain, while older farmers with smaller fields are content to let the Wheat Board sell it.

Leslie said Canadian barley production has fallen from about 15 million metric tons to 7 million metric tons over the last 15 years.

He said factors spurring the drop include the reduced size of Canadian beef herds after mad-cow disease struck, and the rising Canadian dollar, which reduced exports. Both factors led farmers to select other crops, especially canola.

Raska said U.S. barley production also saw a similar reduction of 50 percent from 359,000 bushels in 1995, to 180,000 bushels in 2010.

Leslie said about 50 percent of Canadian barley is planted for malting and 50 percent for livestock feed. But, because of weather issues, only about 20 percent is actually used for beer malting, while 80 percent is used for feed.

In recent years, about 60 percent of barley acres in Montana were planted to malting verities, with the remainder for livestock feed, Raska said.

Leslie said Australian malting companies are concerned about a new trend in Chinese beer making. The Chinese are importing lesser grades of malting barley and making them directly into a cheaper, ethanol-type beer without malting. They are trying to improve the flavor and color that malting typically provides by adding enzymes, he said.

22 June, 2011