TABLE OF CONTENTSThe Barley GrowerPublished by theWestern Barley Growers Association"The Voice of the Barley Grower"Membership $200 per yearAgriculture Centre - 97 East Lake Ramp N.E.Airdrie, AB T4A 0C3Phone: (403) 912-3998 Fax: (403) 948-2069www.wbga.org Email: firstname.lastname@example.orgPublications Mail Registration 72079EXECUTIVEPRESIDENTJeff NielsenRR #1, Site 12, Box 8Olds, AB T4H 1P2403/556-3035 (Res)403/556-5978 (Fax)403/556-0408 (Cell)VICE PRESIDENTTom HewsonRR #1Langbank, SK S0G 2X0306/538-4572 (Res)306/538-4467 (Fax)ALBERTAVICE PRESIDENTDoug RobertsonRR #2Carstairs, AB T0M 0N0403/337-2077 (Res)403/337-3063 (Fax)403/819-8372 (Cell)SASKATCHEWANVICE PRESIDENTArt WaldeBox 596Kindersley, SK S0L 1S0306/463-3302 (Res)306/463-6827 (Fax)306/463-8492 (Cell)TREASURERRick StrankmanBox 22Altario, AB T0C 0E0403/552-2106 (Res)403/552-2020 (Fax)780/753-1971 (Cell)PAST PRESIDENTDouglas McBainBox 68Cremona, AB T0M 0R0403/637-3880 (Res/Fax)403/816-0645 (Cell)DIRECTORSLionel BirdRR #2Carstairs, AB T0M 0N0403/337-2043 (Res)Alanna HermansonBox 41Standard, AB T0J 3G0403/644-2423 (Res)403/934-5585 (Fax)Gordon ReidBox 29Cremona, AB T0M 0R0403/637-2193 (Res/Fax)Roy SparksRR #4Innisfail, AB T4G 1T9403/227-2055 (Res)403/227-2740 (Fax)Buck Spencer30 Laurentian Place WestLethbridge, AB T1K 4G1403/327-8519 (Res)403/329-6044 (Fax)403/330-7904 (Cell)Mel SticklandRR #4Red Deer, AB T4N 5E4403/886-4875 (Res)403/886-2098 (Fax)403/506-3890 (Cell)Albert J. WagnerBox 2826Stony Plain, AB T7Z 1Y3780/963-7753 (Res)780/963-8753 (Fax)780/554-2380 (Cell)OFFICE97 East Lake Ramp N.E.Airdrie, AB T4A 0C3403email@example.comWBGA 32nd Annual ConventionFebruary 11 th , 12 th & 13 th , 2009See You There!President's Message - "Exploring the Future of Barley” . . . . . . 2, 3WBGA Invite you to Join . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Barley as a Biofuel: More than Sound Science Needed . . . . . . . . 5Research Money and Roundtables . . . . . . . . . . . . . . . . . . . . . . . . 6Alberta Barley Commission Chairman's Report . . . . . . . . . . 8, 13Tribute to Jim Chatenay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9A Must-Attend - “Exploring the Future of Barley” . . . . . . . . . . 14WBGA Goal to Launch Private Sector Clearinghousefor Agriculture Commodities is Alive. . . . . . . . . . . . . . . . . . 15, 16Evaluation of Producer Payment Security Options . . . . . . . . . . 17Treasurer's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Research Gives Farmers Choice and Control . . . . . . . . . . . . . . 19Acknowledging Our Sponsors. . . . . . . . . . . . . . . . . . . . . . . . . . 20Graphic Design & Production by: Faraci Design & Graphic ServicesThank you to Doug Robertson and Don Savage for taking thephotos inside this issue.
PRESIDENT’S MESSAGEEXPLORING THE FUTUREOF BARLEYWhatcanweexpect barley to be in 5,10 or 20 years fromnow? Still just acheap feed stock orsmall value addedmalting aspect? Orcan we finally look atincreased returns toour barley producersas we know are thereand are rightfully deserved. I believewe do have a good profitable and creativefuture in barley production andcontinuing to develop strong end usefor it.Now, how we get there is a differentstory. The future holds many excitingpromises and in barley what we as producerscan do with it is just as exciting.As we explored in last year’s convention,we saw the possible benefits ofbarley in the Barley BioproductsOpportunity Project. A well receivedproject sponsored in part by theAlberta Barley Commission and theWestern Barley Growers Association.This one project on its own showedthat barley could successfully be usedfor ethanol production and be fractionatedso the beta-glucan component canbe used as a health additive to foodproducts.Barley adaptation and exploring thefuture of that continues not just todrive us as producers yet should be achallenge to all our industry partners,from end users such as the livestocksector right up to consumers that wantsafe environmentally friendly foods.We need a continued focus on thebasics of barley too, starting from theseed. This means a refocus and commitmentto stronger barley breedingand research. Government researchmust continue, with the same matchinggrant structure we currently have. Thisalong with a complimentary privatesector research will continue to developthe barley varieties we will need inthe future.I believe we have the industry partnerseager to further their explorationof the future of barley, this coupledwith true marketing freedom will providea strong future for us all.Year in reviewLast year at this time our theme wasBarley Going Global: Food - Fuel- Feed: Barley does it all! Itshowed us many advantageousways for allplayers in the barleyvalue chainto be successfuland profitable.Yet inreflectionoverthe year we still are shackled in manyways to see that success and profit.Once again, we failed to see the lightof barley marketing freedom. SeveralBills of Parliament were introduced.One most notably was Bill C-46 –which would have removed barleyfrom the CWB Act. And Bill C-57which would have amended the CWBdirector elections so that only producerswho grew 120 tonnes over a twoyear period would receive a ballot inany CWB director election.Unfortunately there was no supportfrom any of the federal opposition partiesto allow complete passage of theseBills prior to the call of this falls federalelection. WBGA members alongwith others made several trips toOttawa to lobby opposition membersto show them the need for marketingchoice yet to no avail.World trade talks sputtered and werecontinued on page 3The Barley Grower • 2
PRESIDENT’S MESSAGE - continuedthought to come to full conclusion twice inthe year. The first attempt in the spring didnot even get off the ground. Then a fullMinisterial at the end of July saw a powerstruggle between developing nations suchas India and Brazil over run the strongdesire of the developed countries such asthe EU and the US to actually come to aconclusion of the Doha Round.This failure could set trade talks backyears, as we knew at the time there wereseveral factors such as the US Presidentialelections would take any emphasis awayfrom the talks. There is some life left inDoha still, as of writing these negotiationscontinue.What happened to our high commoditiesprices? Speculators in the commodity marketslast spring brought some profits forprairie producer in higher canola prices andsome excellent contracts for new cropcanola. Prices for wheat and barley rosesome too, yet we could not achieve the samehighs our American cousins could due tothe constraints of the CWB.Yet the economic crisis of this past fallhas seen crop prices fall drastically. Inputprices have yet to follow that lead, and it ishope they will by spring of 09. The food vs.fuel debate went into overdrive. Yet now thatcommodity prices have fallen the consumerhas yet to see the same at their grocerystore.We did see some encouragement in there-election of the Conservative Party andPrime Minister Harper’s re affirmation ofGerry Ritz as Minister of Agriculture andAgri-Food and Minister for the CanadianWheat Board. With this we will see thecommitment of our government in movingforward in providing marketing choice towheat and barley producers.In closing, this will be my last President’smessage. I have fully enjoyed the past threeyears as President, working with the strongboard of directors and members - to them Ithank immensely. Also much thanks mustgo to Dianne Savage, our office managerextraordinaire! Without Dianne, I would belost most of the time. The work WBGA hasdone in its lobbying efforts and projectsinvolving the growth potentials of barleyhave been some of the benefits, andrewards, I have fully enjoyed as being partof the WBGA.Thank you all,Jeff NielsenAlberta Grain Commission (AGC)We are:An agency of the Ministry of Agriculture and Rural Development, comprised of eight farmers from various parts of the province,two representatives from the Ministry.Our mandate:• To examine all facets of the grain industry from producer to end user• To make policy recommendations to the Minister on any matters pertaining to the grain industry• To maintain liaison with other governments, groups, or boards within and outside Alberta• To carry out other such assignments related to the matters above, and as may be specified by the MinisterYou may know us as:• Advocators for a competitive marketing system• Providers of price information through radio stations, voice messaging (780/422-3591)and the InternetWorking to enable a prosperous, market driven and sustainable farm and agri-food sector.Alberta Grain Commission(780) 427-7329 Edmontonwww.agric.gov.ab.ca/agcThe Barley Grower • 3
WESTERN BARLEY GROWERS ASSOCIATION MEMBERSHIPWe Invite You to Join!The WBGA is a non-profit producer based commoditygroup. Our goal is to represent the barley producers ofwestern Canada. In terms of financial support thismeans we count heavily on the membership. Without astrong membership we have no funds to run the organization andworse, we do not have a large base to draw ideas and future directorsfrom.Each director spends anywhere from 20 to 90 days per year onWBGA activities. Directors do not receive a per diem, the WBGAis a willing volunteer effort.The directors represent the membership in areas of agriculturepolicy. As a farmer, you need farmers acting on you behalf, speakingfor your rights in boardrooms and communities across this country.With its ongoing commitment to freedom of choice, self-relianceand personal initiative, the WBGA will be your voice in the powercentres of the grains industry. As well, we will be on hand to supportyou and provide you with information on various proceedings.Good organizations do not just exist. They are always growing.We are always looking for new members and people who will workas directors. Being a producer organization means being involved.If you have a concern or feel we are not paying enough attentionto a particular issue, please contact any of our executive and we willhave someone discuss the issue with you.Listed below are some of the meetings and committees WBGA have participated in or hostedand initiatives taken over the last year.AgClearing – Commodity Clearinghouse ProjectAgricultural Policy Framework (APF) CommitteesBiofuels Opportunities for Producers InitiativeCanada Grains CouncilCanadian Grain Commission - Western StandardsCommitteeCropLife Canada ConferenceCereal Grains Value Chain Roundtable CommitteeFood Safety and Traceability CommitteeGrain Growers of Canada Annual & Summer MeetingsGrain Organization (not Commission) MeetingsGrainVisionInternational Food SymposiumLand Use FrameworkMalting Industry MeetingsMarket Signals – Barley Sector – Barley WorkingGroupMeetings with Honorable Geroge GroeneveldMeetings in Ottawa with various Ministers and MPsPresentation to Standing Committee on AgricultureWBGA Annual ConventionWestern Grains Research FoundationWorld Trade Organization Meetings - GenevaWBGA vs CWB Court ChallengeWestern Barley Growers Association welcomes comments and feedback.Please feel free to submit your concerns by contacting any of our Board.
BARLEY BIOFUELS OPPORTUNITIES PROJECTBARLEY AS A BIOFUEL:MORE THAN SOUND SCIENCE NEEDEDTwo years ago, the WesternBarley Growers Associationand the Alberta BarleyCommission decided to takea serious and scientific lookat barley’s potential as a biofuel. The BarleyBiofuels Opportunities Project (BBOP)looked beyond just ethanol production,delving into the technical feasibility andmarket potential of other barley biorefiningproducts such as distillers grains and valueaddedcomponents such as beta-glucans andantioxidants.On the technical side, BBOP’sresearchers found barley can be a viablefeedstock for ethanol production and canyield higher-quality distillers grains forlivestock feed and a range of nutrient-richcomponents for food additives, nutraceuticalsand cosmetics.However Barley’s technical feasibilityisn’t enough. The business must also be economicallyviable for members of the valuechain.“For barley to be a successful feedstockfor biorefining it must improve returns tofarmers, generate profits for biorefineryoperators and remain the grain of choice forits largest existing customer base, Alberta’slivestock feeders,” Mike Leslie, the CEO ofthe Alberta Barley Commission, says.As a feedstock, barley has some significant,but surmountable challenges, including:the Alberta livestock industry’s strugglesto remain competitive in export markets,worldwide economic uncertainty,debates about food versus fuel, and changingenergy policies and prices.Western Barley Growers Associationpresident Jeff Nielsen believes barley andthe barley industry can prevail.“BBOP’s research included a very thoroughbusiness feasibility study,” Nielsensays. “Based on that, we strongly feel barleybiorefining would result in a feed co-product(distiller’s grains) with a high-valuenutritional profile (high protein anddigestibility). This product would fit nicelyinto the cost versus quality ranges of existingfeed sources.Phil Madson, the president of KATZENInternational, a company that’s designedand built more than 150 biorefineriesaround the globe, including barley basedfacilities says in the past too many facilitieshave ignored distillers grains.“The biggest mistake in U.S. [biorefining]was producers forgot that about half ofwhat comes out of their plants is animalfeed,” Madsen says.After 25 years in the biorefining industry,Madson resolutely believes that any modelfor a barley based biorefinery has to bebased on generating revenue from both premiumlivestock feed (from distillers grains)and ethanol. He says the majority of thecorn-ethanol industry has cared so littleabout its distillers grains that it now routinelysells them for half of their true nutritionalvalue.“You need absolutely need cattle integratedwith your ethanol plant – in the winter,you can even give your animals warm watergenerated by the plant,” Madson says.Carman Read, the project manager ofBBOP, says major livestock feeders inWestern Canada would likely benefit frombarley or co-crop bio-refining, Businessleverage areas with integration modelsinclude:• Renewable energy source for fermentation& distillation processes• No/minimal energy requirement forDG’s- Feed wet DG’s directly including stilage or put into silo storage• Feedstock supply risks reduced• Co-product market risks avoided• Address manure nutrient loading issues• Far less water used than stand alonesytemsBenefits versus stand alone plants• Reduced operating costs – in ethanolplant and to the feeding operation• Reduce operation risk savings in traportation, process energy, water, etc• Increased revenue opportunities – ie:GHG credits“For Alberta barley producers and barleybiorefiners to be successful, cow/calf producersand livestock feeders must also besuccessful. They are critical customer segmentsfor our industry,” Leslie says. “At thesame time, we have to be realistic and recognizethat production costs will continue torise across the value chain. Finding ways tostrengthen the gross and net value of barleyat the farm gate and fed cattle at the othergate is the only way to strengthen the valueof assets for barley producers and cattlefeeders in the long run.”The recently formed Beef IndustryAlliance and the Alberta Meat & LivestockStrategy are examples of industry and governmentworking together for the long-termbenefit of agriculture.Nielsen says a similar approach must betaken for barley biorefining. “Barley growers,biofiners and cattle feeders need to havea better understanding of the benefits theystand to gain. And they needs to worktogether to realize those benefits,” Nielsensays.The Barley Grower • 5
GRAINS COMMISSION PROPOSALRESEARCH MONEYAND ROUNDTABLESCheck-offs are a sensitivesubject and a potentialminefield. Most farmerssupport public moneybeing spent on research.We are less united on how much, if any, ofthat public money is to come from producercheck-offs. There are likely to be even moredifferences of opinion on changing theexisting check-off structure.The Canada Grains Council has proposeda roundtable group to support recommendationson innovation. As part of its work, thisgroup would look for agreement onresearch questions. The continued abilityto have Western Grains ResearchFoundation money deducted from CWBfinal payments on wheat and barley is aconcern to some. The roundtable could bean opportunity for barley growers to add ourvoice and influence the outcome.Roundtable working groups were supporteda few years ago by Agriculture andAgri-Food Canada. They were an effort toget farmers, industry and governments toagree. WBGA took part in the cerealgrains roundtable. At that time, differencesover support for CWB monopoly marketingled to considerable acrimony and difficultyin reaching agreement.More recently, a roundtable group was arecommendation of the Compas review ofthe Canada Grains Act and GrainCommission. The review noted the mistrustand farmer suspicion resulting from grainsindustry practice in the past.Before the last session of parliament wasdissolved, a bill for changes to the CanadaGrains Act was presented but left unpassed.This bill did not include the Compas recommendationfor a Grains Commission supportedroundtable.The Grains Commission proposal for aroundtable on science and innovation hasthe best chance of going forward. If thereare no major hitches, the roundtable mightbe able to get agreement on particularissues in the January to April period of2009. Success or failure of this roundtablewould be a guide of where WBGA might goin support of other roundtables.Thomas HewsonVice President ~ WBGAThe Western BarleyGrowers Association andGrain Growers of Canada supportbroadening the check-offon wheat and barley sales,with additional revenuesbeing added to the existingcheck-offs administered bythe Western Grains ResearchFoundation or the AlbertaBarley Commission as is currentlythe case.The WGRF has fundedwheat and barley basedresearch for over 20 years andcontinues to enjoy over 90%producer support. WithinAlberta, and specifically barley,the Alberta BarleyCommission has been investingin barley research, policyand market development since1991 and in that 17 year historyhas also held an average92 % level of support.The 70,000 producers GGCrepresent are looking forwardto working with the governmentand its goals for improvingproducer’s income whichwill only be enhanced withbetter wheat and barley varietiesfor food, feed, andbio-fuels.Meeting of the Minds - Grain Growers of Canada (GGC) SummerMeeting - June 2008: Steve, Bob Jeff & RossThe Barley Grower • 6
ALBERTA BARLEY COMMISSION CHAIRMAN’S REPORTThis year, thanks in partto more check-off dollarssubmitted, anongoing campaign toget more feedlots tosubmit the levies they are requiredto deduct by law, and deep cost-cuttingmeasures to recover last year’sdeficit, the ABC ended the year witha slight surplus.To help do that we significantlyreduced our investment in newresearch projects and some areas ofmarket development and membercommunications. Overall though, wemaintained our support of existingprojects and commitments, forexample our annual research fundingof $250,000 for the Field CropDevelopment Centre in Lacombe.We were not able to fund any majornew research projects in the face offunding cutbacks and reallocationsby the Province of Alberta, in particularits decision to no longer fundmalting barley research.We worked with numerous newand existing industry partners toform alliances that benefit barleyfarmers across Alberta. ABC is ableto leverage producer dollars to theextent that every $1 from theCommission attracted $7.35 fromthose investing partners and agencies.We also published just threeeditions of Barley Country insteadof the normal four, saving about$40,000.In all, we reduced our expendituresand investments by $240,000in 2007/2008, almost enough torecoup the shortfall we experiencedin 2006/2007. Our “good year” alsoincluded:• Registration of a new maltingbarley, Bentley• Agronomic advances in maltingbarley production, the result ofjoint projects with the CanadianWheat Board and Agricultureand Agri-Food Canada• Attracting increased fundingfrom the Alberta Crop IndustryDevelopment Fund (ACIDF) forfeed research• A project to encourage agronomic advances in producing Albertabarley for Japanese Shochuliquor• A very favourable and comprehensive technical and businessstudy on using barley in biorefining (ethanol, distillers’ grainsand extracts) through our BarleyBioproducts OpportunitiesProject done with the help ofother groups including theWBGA.• Making recommendations toimprove and strengthen farmerinsurance and income programs• A joint project with the CanadianInternational Grains Council touse barley in more foods• Positive, flexible changes infederal regulations for kernelvariety distinguishability (KVD)and plant novel traits (PNT)• Renewal of the Alberta/CanadaBarley Agreement with AlbertaAgriculture and RuralDevelopment and Agricultureand Agri-Food CanadaThis past year has seen one changein the office, with Audra Crumpmoving over to SAIT to continue hercareer there. Mandi Tilleman hasjust recently been hired on as thenew Office Administrator, and wewelcome her aboard.At the end of October we receivedsome very sad news that one of ourDelegates and the son of ourDirector-at-Large in Region VI hadpassed away at home. Leo Meyer Jr.was a promising young farmer wholived and breathed agriculture, andhis loss was a big blow to all of us.Our deepest sympathies are withLeo and Kathy and their family asthey make the painful adjustment.On the Board front, threeDirectors including myself startedwith the ABC six years ago and willretire this year as our maximumterms run out. Region II DirectorDoug Miller from Acme has been thevoice of the farmer since he came onour Board, and always kept usgrounded in what was good for theproducer, our customer. Region IDirector Brian Otto from Warner hasbeen the voice of reason on theBoard, never afraid to stand for hisbeliefs and take the tough standsrequired. Throughout my time atABC Brian has been the person Iturned to for advice and guidancewhen the times and decisions werethe toughest. As for me, my positionas a Director-at-Large has allowedme the time to serve as ABC Vice-Chairman for two years andChairman for three, and it has beencontinued on page 13The Barley Grower • 8
TRIBUTECHATENAY'S LEGACY OF PRINCIPLEIn 1946, when the CWB’s District#2 Director Jim Chatenay wasfour years old, he traveled bytrain with his family to New YorkCity, where they boarded an ocean linerand sailed for Lausanne, Switzerland, toattend his grandfather’s funeral.Chatenay didn’t return again toSwitzerland until he was thirteen, whenhe attended the exclusive private school,“École Nouvelle de la Suisse UisseRomande” near Lausanne, where hebecame fluent in French, and German,and Latin.When fifteen year old Jim was ready toreturn to Canada, he asked his godfather,who was the President of the SwissNational Bank, if he could borrow somemoney. His godfather advised Jim that ifhe were to borrow a million dollars, itwould be more prudent to borrow from aCanadian bank and pay the going 18%interest rate, than to borrow from a Swissbank and pay the 3% rate, because itwould be more difficult in the yearsahead, to pay back the Swiss loan withCanadian dollars. The advice was sound.The Swiss dollar quickly became morevaluable than the $CAN, and it was a lessonChatenay never forgot.Chatenay is an interesting man. Hiseyes are very lively, and he‘s got acharming way about him and easy to visitwith. He’s a successful farmer. His childrenare educated as professionals.........doctors, lawyers, accountants. Hiswife Olive, is gracious. He’s comfortablewith himself. And it’s quite remarkablethat as a Wheat Board Director for threesuccessive terms, no other director canmatch the voter support Jim has received.Chatenay was consistently elected on amarketing choice platform, and neverswayed from it, not even an inch, eventhough the Wheat Board were, as herecalled, “ganging up on me.” Recallingsome of the Board’s intimidating tactics,he mentioned, “They faxed my wife sayingwe’d lose everything,” and of course,there was the routinely experienced alienation,which is such a lonely feeling whenattending Board meetings, and hedescribed it as “ugly”, but he never gaveup.I’ve recently read posts on the farmforum Agri-ville, written by unsignednames espousing the Wheat Board’smonopoly view, intimating that Chatenaywasn’t worthy of a directorship, trying todenigrate him, even though he representedhis constituency as he promised, and itis difficult to understand the single-deskvenom that spews like vomit from themouths of those whom Chatenay neverlooks down upon. He seems to maintainan attitude of renewable tolerance for theperson who’s message he may vociferouslydisagree with. I asked Chatenay wherehe found his inner strength, and heanswered without hesitation, “From mymother.”His mother, Ann Cérésole Chatenaywas a well-educated stately woman whocared deeply about people, even thoughshe was stoic. An expression she frequentlyrepeated was, “It’s a matter ofprinciple,” one that Jim has obviouslyrelied upon his entire life.Although she grew up in an upper classfamily, she worked as an artist inSwitzerland, and painted many beautifulcanvasses. Her grandfather was thePresident of Switzerland, Paul Cérésole.One of the president’s sons was a judge,and one of Ann’s cousins was a general,and another of her cousins was married toJean Piaget, and one of her uncles wasGhandi’s best friend, a who's-who list,and yet, in all the years I have knownhim, and spoken with him so very frequently,Jim is not a name-dropper,although he has every right to be. It wasin this kind of environment, that AnnCérésole Chatenay was exposed to manyfacets of society, and the experience andknowledge she gained from such a backgroundhave greatly influenced her son,and stays deep within him.In his interview with me, Jim hasregrets, “In reality, we never put more infarmers’ pockets, and I wish I could goback and finish it. To me it’s difficultbecause I put so much into it.” Then hisvoice faded, “I didn’t get it done.”He did get it done. He loyally servedhis voting constituency. He set an exampleof how a voice of hope can survive ina boardroom of psyche-slashers. He providedthe continued visible leadershipthat moved the choice movement forwardsto a place where the polls nowreflect a majority. He is the beacon forALL Designated Area farmers wantingchange. He is a friend. How did heaccomplish so much?It was a matter of principle.Printed with permission fromCarol HusbandThe Barley Grower • 9
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CHAIRMAN’S REPORT - continueda privilege to do so. I have servedwith many fine Board members overthe years, but none better than thoseserving now. Three new Directorshave just been elected for next year– Greg Stamp from Enchant inRegion I, Matt Sawyer from Acme inRegion II, and Glenn Logan fromLomond as Director-at-Large. I hopethat ABC can continue the betterrelationship we have built this pastsix years with all farm groups, especiallythe WBGA.Although some may not see thedifference in the ABC over 6 years, Iassure you it is huge. Just to give 4examples - when we started 6 yearsago the Commission had no operatingrules for the Staff or Board, ourlevy list was inaccurate, financialreporting to the Board was incompleteand strategic planning wasdone by the General Manager alone.The ABC has evolved into a professionally-runorganization that iscited by Marketing Council to othersas an example of how to operate abusiness and protect producer’s levyinvestments.I’d like to end by thanking themany people who contributed toABC’s progress and success thispast year. Our Board members andDelegates contribute their time andexpertise in guiding the Commission.The industry partners we workwith help us achieve common goalsand make important advances. Andlast but not least, my thanks to ourstaff and contractors. Led by MikeLeslie our innovative CEO, they arededicated and professional in everythingthey do to serve our producers.We cannot imagine ABC doing whatit does without them.Doug RobertsonChairman ~ ABC
A MUST ATTEND Conference…With all of the concern about the possible recession, continued high input costs and lowerprices, producers are wondering how they can compete.Farmers, industry and government officials are all invited to attend and participate.WBGA 32 nd Annual ConventionFebruary 11, 12 & 13, 2009Sheraton Cavalier Calgary Hotel -- Calgary, ABFeaturing first-rate speakers and an exciting agendaWednesday evening - President's Welcome ReceptionThursday - Speakers Followed by Banquet, Guest Appearance by Steve Stubblejumpski & Annual Fun AuctionFriday - Speakers (closing 5:00 p.m.)❖ Vision for “Value Added” in the Grain Industry❖ Barley, The Evolution of BioRefining❖ Biofuels and how to meet the supply of feed at the same time❖ Vision and the future of malt contracts❖ AgClearing - an important new marketing infrastructure for farmers❖ Evaluation of Producer Payment Security Options❖ Grain Markets for 2009❖ Saving dollars on your fertilizer utilizationConvention registration: Email: firstname.lastname@example.org - Subject “Exploring the Future of Barley”Hotel reservation: By phone at 403-291-0192, email at email@example.com or online atwww.starwoodmeeting.com/StarGroupsWeb/res?id=0811180847&key=A93F9For more information or to reserve your place at the convention please contact either Linda or DianneWestern Barley Growers Association97 East Lake Ramp N.E. Airdrie, AB T4A 0C3Phone: (403) 912-3998 Fax: (403) 948-2069 (convention only) Email: firstname.lastname@example.org
PRIVATE SECTOR CLEARINGHOUSEWBGA GOAL TO LAUNCH PRIVATESECTOR CLEARINGHOUSE FORAGRICULTURE COMMODITIES IS ALIVEThe goal of the WesternBarley Growers Assn.(WBGA) to launch a privatesector clearinghousefor agricultural commodities is aliveamidst the robust merger and acquisitionactivities of global exchangesand clearinghouses and the turmoilof the worldwide financial crisis nowupon us. Now, more than ever, theneed for and value of a clearinghouseto guarantee performance and paymentof contractual agreements isvital as the world market place isbeing critically tested for integrityand confidence.There are still barriers to thedevelopment of an agricultural cashcommodity clearinghouse in respectto demonstrating value. Potential serviceproviders have to see a longtermbusiness opportunity and potentialusers must feel that value existsin order for them to use the service.In general, farm groups and individualfarmers support clearing as anoption for providing producer securityin cash commodity trading and inforward contract sales. Extensiveresearch across all market areas anddemographic segments shows that theconcept of clearing is strongly supportedby the majority (70%) offarmers. In terms of farm policygroups and commodity organizations,with the exception of the pulseindustry the concept of clearingforward contracts and spot sales haseither been endorsed by them or theorganizations are neutral to the concept.While some end users haveendorsed clearing, the major grainhandlers have been reluctant toembrace the concept. Meetings withsenior members of western Canada’sgrain trade have reinforced that thecentral issue in moving the clearinghouseproject forward is the abilityto demonstrate value for the buy sideof the transactions. The work by theWBGA’s development team hasshown that without major buy sidesupport for clearing bi-lateral contracts,a “stand alone” clearinghousewill not create enough value toattract adequate user participation orthe services of a clearinghouse operator.In view of the situation the WBGAproject management team directedthe development consultants to workto identify ways that incrementalvalue could be created to attractmajor grain handler participation.In the evaluation of options themost promising approach, based ondiscussions with potential serviceproviders, is the development andinclusion of electronically tradedforward cash contracts. These contractswould add value for buy sideparticipants as they increase the abilityto trade forward cash contractselectronically on a multi-lateral basisand to consummate the trade byclearing the transaction.The team has identified a number of benefits to this approach for both buyers and sellers including:FEATURESVisible spot and forward market bids, offers and trades.Risk position offsets.Securitized transactions.Pre-approved credit with central counterparty guarantee.Independent dispute resolution and arbitration.Ease of access.BENEFITSEnhanced price discovery and market transparency offering improved marketing opportunities.Recognition of offsetting cash purchases and sales or futures and cash offset positions whichresult in reduced margining costs.Financial lender recognition of securitized transactions against physical inventory resulting inimproved borrowing scenarios and reduced financing costs.Centralizing transactions and settlements through the clearinghouse optimizes financial leverageand reduces the need for broad-based credit approvals and financial scrutiny. Strong substitutefor Canadian Grain Commission bonding.All disputes on performance and payment can be handled by the clearinghouse offering bothcounterparties advocacy and a balanced, unbiased review process.It is expected traditional cash and futures brokers will offer their clients an easy and user friendlyweb-based portal to access online trading information.continued on page 16The Barley Grower • 15
PRIVATE SECTOR CLEARINGHOUSE - continuedIn summary the view is thatagricultural cash commoditycontracts can be traded electronically.In fact most major futuresmarkets have embraced electronictrading. Most importantly electronicallytraded and cleared contracts incash markets could very effectively andefficiently provide an important newmarketing infrastructure for farmers andtheir customers across all commoditiesin western Canada. It could also be thedriver for the utilization of clearing toaddress industry payment and contractexecution risks.The Barley Grower • 16
PRODUCER PAYMENT SECURITY OPTIONSEVALUATION OF PRODUCERPAYMENT SECURITY OPTIONSOn July 21st, 2008 a jointannouncement byKeystone AgriculturalProducers (KAP),Agricultural Producers ofSaskatchewan (APAS), Wild RoseAgricultural Producers (WRAP) and thepulse industry including Pulse Canada andprovincial organizations indicated theirintentions to evaluate new options for producerpayment security given the proposedchanges to the Canada Grain Act. This initiativewas spawned following the federalgovernment’s announcement of its intent toremove bonding coverage for paymentassurance to producers. To address the concernthat producers would be left with nopayment security these farm organizationsindicated they will be working with ScottWolfe Management, a Winnipeg based consultingcompany, to evaluate a range ofoptions that may be available to the industry,including but not limited to:• Security-based mechanisms;• Insurance-based mechanisms;• Fund-based mechanisms, and• Clearinghouse models.KAP/WRAP/APAS and the pulse industryhave received funding from the PrivateSector Risk Management Partnerships programof Agriculture and Agri-Food Canadato conduct the evaluations. The WBGA,along with the Canadian Canola GrowersAssociation (CCGA), were invited to participateas members of the working group andboth the WBGA and the CCGA haveaccepted that invitation. The WBGA fullyintends to share the work it has completed todate on the clearinghouse concept. DougMcBain will be the WBGA representativeto the working group established by themanaging partner in this initiative, theKeystone Agricultural Producers.The efforts by the above organizations orthe WBGA’s participation have not changedthe WBGA’s view or the strong intent by theWBGA to find ways to launch an operatingclearinghouse. The WBGA’s view is thatthere is likely room for more than onemechanism for producer payment securitygiven the broad range of commodity andspecialty products produced in westernCanada. The WBGA’s extensive comparativeanalysis of alternative mechanisms forproducer payment security, including thecurrent bonding approach, check-off fundsand insurance techniques demonstrated thatclearing offers the broadest and most comprehensiveprotection of any alternative. Forspot and forward contract sales of majorgrains and oilseed commodities it wasfound that a transaction-based mechanismsuch as clearing and a market drivenapproach offered expanded coverage tobonding which is an entity-based protectionmechanism. Clearing forward contracts alsooffered a longer time frame of coverage aswell as providing coverage for both buyerand seller. Finally, clearing contracts is“user-pay” but only on as “as needed” basisand furthermore had the distinction of beingthe only mechanism that was proactive tocontract default as opposed to the reactivenature of check-off funds, surety bonds andinsurance policies. A concern for theWBGA is that alternative mechanisms offersome degree of financial recovery in theevent of default but do little in the way ofpreventing the failure. For these reasons theWBGA continues to endorse clearing as thepreferred contractual and settlement riskmitigation mechanism for the Canadianagricultural sector.Additionally an important distinction of aclearinghouse solution as opposed to otherpotential options is that a clearinghouse isbased on an entity operating a business andproviding value to both buyers and sellers ofcommodities through that business.Conversely other options are likely to bemore “program” orientated.The Barley Grower • 17
TREASURER’S REPORT & FINANCIAL STATEMENTSTREASURER’S REPORTThe fiscal year ending September 30, 2008 saw theWestern Barley Growers (WBGA) continuing to workwith other groups and organizations to do the most goodfor the agriculture industry. The past year has been aneventful one for the Association in a number of areas.While efforts of the staff and Board to reduce officeoperating costs were very successful over the last fewyears, this year’s expenses are increased mainly by legalfees and director’s travel. Revenues have also beendeclining. We know that for those individuals in the agriculturalsector, 2008 has been a very challenging andtough year. It is imperative that the association finds waysof increasing revenues if it is to enjoy a productive future.This marks the 32nd anniversary of the WBGA.Membership support and involvement are crucial to thesuccess of the organization. We are hopeful in attainingmore memberships in the future. A larger membership ismore effective for keeping ideas fresh and introducingnew ideas – “Exploring the future of barley”. We inviteyou to visit our website at www.wbga.org.A sincere thank you to all those corporations and individualswho continue to support the Western BarleyGrowers Association.Rick StrankmanTreasurer, WBGAREVIEW ENGAGEMENT REPORTTo the Members of Western Barley GrowersAssociation:We have reviewed the statement of financial positionof Western Barley Growers Association as at September30, 2008 and the statements of operations and relatedschedules, changes in net assets and cash flows for theyear then ended. Our review was made in accordancewith Canadian generally accepted standards for reviewengagements and accordingly consisted primarily ofenquiry, analytical procedures and discussion related toinformation supplied to us by the Association.A review does not constitute an audit and consequentlywe do not express an audit opinion on these financialstatements.Based on our review, nothing has come to our attentionthat causes us to believe that these financial statementsare not, in all material respects, in accordance withCanadian generally accepted accounting principles.Western Barley Growers AssociationStatement of OperationsFor the year ended September 30, 2008 (Unaudited)2008 2007RevenueMembership fees 25,150 19,609Project policy development 5,000 10,000Interest and other revenue 4,751 17,63234,901 47,241ExpensesAdvertising and promotion 55 853Amortization 432 734Bad debts 500 -Computer repairs - 340Consultants 34,413 31,704Directors' fees and travel 12,040 8,394Donations and contributions 450 15,262Dues and memberships 4,507 2,346Interest and bank charges 151 148Meeting costs 1,758 1,244Office 1,385 2,557Professional fees 17,338 14,562Seminars - 14,234Telephone, fax and internet 1,879 3,28174,908 95,659Deficiency of revenue over expenses from operations (40,007) (48,418)Convention 49,013 25,632AgClearing Project (3,679) 4,375BBOP Project - -Excess (deficiency) of expenses over revenue 5,327 (18,411)Meyers Norris PennyChartered AccountantsCalgary, AlbertaNovember 10, 2008The Barley Grower • 18
WESTERN GRAINS RESEARCH FOUNDATIONRESEARCH GIVES FARMERSCHOICE AND CONTROLWGRF (WesternGrains ResearchFoundation) supportswesternCanadian publicresearch programs and projects throughlong and short-term agreements.Farmers funding their own researchgives them choice and control. The barleyresearch being conducted keepswestern Canadian producers a stepahead of the rest of the world. Researchis important for advancing technology,whether it be increasing yields or othernotable agronomic improvements.Barley varieties have seen greatadvancements over the years, and thesenew varieties give farmers a leg up oncompetition from all over the world. Forexample, in the 2008 Canadian WheatBoard survey results, WGRF supportedCDC Copeland was the second mostpopular malt variety grown in 2008.Improvements have been seen in theareas of disease resistance, yield potentialand a number of quality characteristicsthat those purchasing barley arelooking for. These innovations havebeen made possible because of the dedicatedbarley breeders from around thecountry. WGRF invests in breeding programsacross Western Canada, with thegoal of developing varieties that growwell in farmers’ fields and are demandedby industry.Over $600,000 per year is invested inbarley breeding research. This amountcomes from producers through thecheck-off and from the royaltiesreceived on certain varieties (whichWGRF reinvests directly back intoresearch). Every dollar invested in theBarley Check-off is matched or doubledby government funds. WGRF workshard to leverage each farmer dollar toget the most benefit possible.As government begins to move awayfrom these investments, WGRF is fightingto maintain their involvement.Canada has a strong history of developingleading-edge varieties that keep ourproducers competitive. The agriculturalindustry depends on a continuous sourceof outstanding varieties to keep us aheadof the rest of the world.WGRF Supported Barley Varieties - afull list is available at:www.westerngrains.comMike EspesethCommunications Manager ~ WGRFThe Barley Grower • 19
WESTERN BARLEY GROWERSASSOCIATION32nd Annual Convention“Exploring The FutureOf Barley”AcknowledgingourSponsorsSponsors are an important andvalued part of ourconvention.On behalf of the WBGA Boardof Directors, we want toexpress our appreciation toyou. None of this would bepossible without your continuedand generous support.Once again,Thank you!PLATINUMC NDow AgroSciencesJohn Deere Ltd.Monsanto Canada Inc.Richardson International LimitedSyngenta Crop Protection Canada, Inc.ViterraGOLDParkland Agri ServicesSILVERAlberta Barley CommissionBASFCase IHNewco Commodities Ltd.Rahr Malting CanadaBronzeAFSCAgri-Trend Group of CompaniesAgriumATB FinancialBayer CropScienceCanada Malting Co. Ltd.DuPont Canada Inc.F. P. Bourgault Industries Ltd.ICE Futures, Canada, Inc.New Holland AgricultureParrish & Heimbecker, LimitedPrairie Malt LimitedRBC Royal BankTD Canada TrustThe Western ProducerUFAAlberta Beef MagazineAlberta Grain CommissionBrewers Association ofCanadaCONTRIBUTORCanadian Grain CommissionFarmers of North AmericaQuorum CorporationWeyburn Inland Terminal Ltd.
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