Signaling a desire for more market efficiency, the boards of directors of U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) each passed a resolution on Jan. 29 calling for an open border with Canada that provides reciprocal bilateral wheat trade.
Under a December 2011 law, which still faces some legal challenges, the Canadian Wheat Board (CWB) will lose its grain marketing monopoly Aug. 1, allowing western Canadian farmers to sell their wheat and barley in the open market.
(Speculation is there will be dramatic change in wheat marketing and that story can be found at http://southwestfarmpress.com/markets/dramatic-change-wheat-marketing-coming-year).
The United States is routinely Canada's top wheat export market, but Canada's open market changes could affect the ways wheat moves into the United States.
“We believe that in an open market, some Canadian wheat will move to U.S. country elevators near the border,” said Gordon Stoner, a Montana wheat farmer who serves as the head of the USW/NAWG Joint International Trade Policy Committee.
“Our wheat farmers are ready to accept that outcome as long as we similarly have a fair opportunity to deliver into the Canadian handling system. This resolution gives NAWG and USW the authority to work with farmers, the grain trade and government agencies here and in Canada to give U.S. farmers reciprocal access to the Canadian market.
“We seek an open border — in both directions.”
Stoner said some key issues must be resolved before U.S. farmers could sell their wheat to cash markets in Canada, such as Canada’s narrow wheat class variety eligibility lists that do not allow most U.S. varieties to be marketed in the country as top grade milling wheat.
“Ultimately, open trade across the border will be good for both Canadian and U.S. wheat farmers by adding efficiency and allowing Canadian and U.S. wheat handlers, users and growers to compete on the basis of quality and location,” Stoner said.
"At the same time, with the CWB monopoly gone, the international market that determines our prices will become more transparent, fair and efficient."
USW is the industry’s market development organization working in more than 100 countries. USW activities are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by USDA’s Foreign Agricultural Service.