Concerns on grain transportation, initial grain payments and the future viability of the Canadian Wheat Board were among the topics raised by Weyburn area producers with the CEO and local director for the CWB at a corporate accountability meeting held Wednesday at McKenna Hall.

As one of a series of such meetings being held by all of the farmer-elected directors of the CWB across the prairies, local director Rod Flaman and CEO Adrian Measner explained how the past and current crop years are going, and also provided an outlook for the coming crop year.

In answering concerns, ranging from the plan to cut 135 positions from the CWB to the trade challenges coming from the United States, Measner acknowledged some of these are ongoing issues and are not resolved, and agreed they need addressing.

More than one producer raised concerns over extremely low initial payments, far lower than the price indicated in the Pool Return Outlooks (PRO) issued monthly by the CWB, and one former director asked if the Wheat Board should separate itself from the government over the issue.

Sedley producer Bob Baker said he was "just floored" when he saw the initial payments for feed barley was only 47¢ a bushel, while the non-board price was $1.77.

"I'm just wondering why you would announce initial payments like that; that's just a slap in the face as far as I'm concerned," he told Measner.

The CEO acknowledged the low initial payment was ridiculous, but noted the CWB asked the government to guarantee a better payment. The government's view is the volatility of the market made it too risky to offer a higher initial payment, and part of that shyness was due to a deficit of $85 million from the 2002-03 crop year when payments were guaranteed to producers, but the end payment from customers for grain was far lower.

Terry Hanson, a Fillmore producer who served as CWB director before he was defeated by Flaman in 2000, suggested the board should consider going on its own for initial payments, and not rely on the government to guarantee it.

He agreed with Baker on the ridiculously low initial payment levels, and said, "I'm wondering if it's time to divorce ourselves from the federal government. We have to be realistic here ... Producers are in a really tight cash flow situation because the feds got burned. Is it really worth having the irritant of the U.S. government challenging the CWB? What's the cost of doing away with the government guarantee?"

Measner responded that the board is looking at a couple of options around signing up farmers to an early payment option (EPO) contract, and extending the sign-up deadline to allow more producers to sign on to it. He said currently there is a deadline of July 31, but many producers have indicated they can't sign on because they don't know how much of their crop would be available come harvest-time; extending the deadline to Oct. 1 would allow more farmers to know the size of their respective crops.

On assuming the overall guarantee for the initial payment, which is currently guaranteed by the federal government, Measner said the board would want some form of compensation to cover their risk.

Producer Tom Webb from Pangman, a board member for Red Coat Road and Rail, questioned the statement that service would be better when the CWB is cutting 135 positions. If that is possible, he said, perhaps farmers would have been better off if the move had been made years ago, cutting administration costs.

Measner responded first by commending Red Coat Road and Rail for their work, saying it provides an innovation that is needed in the agricultural industry. On cutting staff, he explained, "What we did was step back and look at the road map for the next five years. It's not something we had a clear vision on previously. We asked what do we need to focus on in the next five years. ... If we provide worse service because of this change, I'm going to pay the price, because I told the board that wouldn't happen. We need to make sure staff can respond to the concerns of producers, and we're trying to do it as efficiently as we can."

He added that he believes the structural changes made in cutting these positions will be a step forward for the CWB.

Weyburn producer Alf Robinson asked if the CWB is in a "no-win situation" with the U.S., considering their size and persistence in attacking the Wheat Board with trade challenges.

"I don't think it's no-win. There's no question they have attacked us on every side they can, and I don't think they're going to stop what they've been doing. They've taken our overall operation to the WTO (World Trade Organization) and that's the highest court they can go to," responded the CEO, adding the Wheat Board has been consistent in complying with GATT rules and will continue to do so.

Webb raised another concern, related to the long turn-around time for producer cars. He noted the last car he sent from Pangman took five weeks to get to Thunder Bay, adding the comment, "I thought the cars were pulled by locomotive, not by dogsleds."

"We were uncomfortable with how producer cars were treated," answered Measner. "We've had discussions with CP and with the grain commission on that. I agree with you, that wasn't the best scenario."

On the issue of tendering of grain cars, Measner told the producers that most grain companies were unhappy with having 50 per cent of the cars tendered out; a new agreement has been reached, signed on by 24 of 26 grain companies, to tender out a maximum of 20 per cent.

"One issue is some thought this would reduce the savings generated on the transportation side. As of the second quarter just released, our transportation savings are $19 million, so we haven't seen a reduction on that," added the CEO.

Looking to challenges in the current 2003-04 crop year, Measner noted one major factor is how much China will buy, and the costs of ocean freight. In the past year, ocean freights have tripled, he said, going from $25 to $75 a tonne, giving a competitive advantage to closer exporters like Australia by as much as $10 to $15 a tonne.

Measner noted that China needs 100 million tonnes to sustain their domestic market for wheat; the question for the coming crop year is whether they will just buy enough for this year's demand, or if they will be rebuilding some of their stocks.

The winter weather which has included two major blizzards on the Prairies has affected grain transportation, said Measner. Due to the snow and cold, there were fewer locomotives available, and the CWB was able to ship about one-third less than they were hoping to in February. Meanwhile, the demand for producer cars has jumped significantly from last year; only 1,100 producer cars were shipped a year ago, and so far in this crop year there have been 4,100 cars shipped. Measner said that number could reach as high as 10,000 cars by the end of the crop year on July 31.

Looking ahead to the 2004-05 crop year, durum will have one of the weaker markets, mainly due to an above-average crop from North Africa, which has provided one of the main markets in the past, along with an expected improved crop from Canada.

For feed barley, a big crop is expected in Canada and the U.S., assuming improved growing conditions, with weak demand expected from North Africa and the Middle East. The biggest factor for feed barley will be the BSE crisis, and whether or when the U.S. border will reopen to Canadian beef.

For malting barley, the CWB is expecting better sales but stiff competition, with a big crop expected in Australia and improved crops in Europe. Global import demand is expected to remain flat.