In the face of a U.S./Canada grain commission's recommendations and expectations of a good harvest, Montana wheat growers look forward to a profitable year.
According to the Montana Agricultural Statistics Service, Montana wheat growers are likely to produce the second largest crop on record, trailing only the 1993 record harvest. Total production for all Montana wheat, which accounts for 65 percent of cash receipts from crops, is estimated at 188.8 million bushels, up nearly 11 percent from last year.
But as good as the crop and the market look for US wheat, what Montana growers see as unfair competition from Canadian wheat growers has created cross-border tensions. Montana growers contend that the Canadian Wheat Board, which controls that nation's wheat market, has been undercutting prices and flooding US markets.
That situation may change, however, as a result of the joint US/Canada commission's preliminary report issued in June. The report suggests that both the United States and Canada should end export subsidies and grain-pricing practices; a consultation commission to address cross- border issues should be created, and Canada should lift restrictions on US barley and barley products.
"We have no problem competing with Canadian producers," says Randy Johnson, executive vice president, Montana Grain Growers Association, "as long as they sell at competitive prices."
And for now, it looks like competition with Canadian growers will continue. A Canadian transportation subsidy expires in August that has allowed Canadian farmers to ship their wheat cheaply to seacoasts for export. Without the subsidy, Canadian growers close to the US border will likely move more grain into the United States. In addition, current Canadian limits on exports of wheat to the United States expire in September, creating the potential for more Canadian wheat to move into the US market. The effects on Montana growers, Johnson says, is that when you get huge amounts of grain coming down from Canada, that clogs transportation and elevator systems.
In anticipation of Canadian wheat policy changes, General Mills Inc. and the Alberta Wheat Pool announced plans to build a $1 million grain terminal just south of the Canadian border in Sweetgrass.
The terminal, which is expected to be completed in late fall, will handle a 52-car unit train and up to 400 tons of grain per hour. Canadian farmers will truck grain to Sweetgrass, where it will be will be transported by Burlington Northern trains. The terminal will be owned jointly, but operated by General Mills.
Canadian wheat is already trucked to elevators in Montana, and the border terminal is expected to decrease the lines of trucks at smaller US terminals, says Kerry Schaefer, regional manager of the northwest region for General Mills Grain Operations.
Schaefer says that with large cattle feedlots in Lethbridge and Calgary, movement of US feed grains through the terminal to the north is a possibility.
The new terminal at Sweetgrass, Johnson says, may not be a bad thing for US growers, if the operations are open and fair. And it means more tax dollars for Montana, Johnson adds. "Realistically, all we can look forward to sending to Canada is feed barley," if both countries adopt the commission's recommendation to allow US barley into Canada.
—Kathy Cobb
