New Flour Mill in BC

[Everest]

From the CWB bulletin:

"Rogers Foods Ltd. announced last week that it will build a new flour mill in Chilliwack, B.C. Services provided by the CWB, including supply assurance and professional/technical assistance, were factors in Rogers Foods' decision to locate within Western Canada."

Questions:

Now what do you suppose the supply assurance might have cost the captive suppliers? Put another way, what is it worth to Rogers?

Does a monoploy have to provide this in order for new developments such as this to occur?

What about existing end users who might threaten (or bluff) to close and leave...do they get similar assurances?

How would the CWB 'benchmark' the value of these assurances to end users to assure themselves and us that this will return more money to farmers?

Does the single desk premium that we are assured we get offset the supply assurances?

And the professional services. What exactly is the CWB "professional" at that Rogers foods would not already possess of have commercial access to?

[TOM4CWB]

Everest;

I believe this is another example of lost opportunity for Alberta, Why?

1. We have one of the best markets on earth for screenings and middlings, demand in our livestock sector for millions of tonnes of feed that is not being met.

2. Farmers are paying to get the raw wheat to the Coast, and if the yield is 70% flour, then we are paying the equivelent freight to get the feed back to the livestock producer in Alberta... GOOD DEEAL, We get to pay twice.

3. If the CWB monopoly is knocked out in the next year, and Rogers Foods can't get cheap wheat from the CWB (The only likely reason Rogers likes the CWB to begin with) then what will Rogers Foods do?

Is this efficient effective development of our economy, built at the cost of "designated area" farmers expense... once again?

[TOM4CWB]

I have talked to two flour mills in the last month. One stated that they could not source any #1 or #2 HRS Wheat from the CWB as it was being exported to their best customers. The second mill stated they were being discouraged from sourcing #1 and #2 wheat by being charged and extra $30.00/tonne penalty by the CWB. Reason for the penalty was not explain by the CWB.

Both mills were totally disinchanted with the policy of the CWB on this matter. They would not disclose their buying price from the CWB stating confidentiality demanded by the CWB.

MY thoughts are that the $30.00 penalty was to discourage domestic use but at the same time allow the CWB to state that domestic mills were not denied access to High quality milling wheat.

The CWB are discouraging value added processing in Western Canada because of these policies. If you consider that a processor in Man. Sask or Alberta has to pay grain co. handling fees $12.00/tonne(.30Cts/bus), CWB fees of $8.00/tonne(.20cts/bus) and then a penalty of $30/tonne(.80cts/bus) over the export price. These charges amount to $1.30/bus Over and above what the mill would have to pay a farmer to deliver the extact wheat they wanted to their plant on the prairies.

Now does that look like the CWB is trying to foster value-added on the prairies. Farmers you don't have a light on. You are letting bureaucrats push you around and lie to you.

Farming techinology today has allow producers through different harvesting capabilities and extensive fertilizer use the ability to achieve better grades, yields and higher protein on a more consistant bases. This all comes at a higher input expense. But the CWB, their single desk and pooling accounts takes away any extra premium obtained from this practice and shares it with farmers who couldn't raise quality on a regular bases often enought to obtain the below average prices that the CWB represents.

[chaffmeister]

News Release....

ROGERS FOODS LTD. TO BUILD A NEW FLOUR MILL IN CHILLIWACK, BRITISH COLUMBIA, CANADA

Chilliwack, BC - January 15, 2003 Rogers Foods Ltd., operating for fifty-one years in British Columbia as a flour and cereal mill, announced today that it has selected Chilliwack, BC as the location where it will build a new 250 tonnes per day, state-of-the art flour mill. The new mill, expected to be in operation by late 2004, will be called Rogers Foods Ltd. - Pacific Division (Chilliwack).

The new plant will mill wheat into custom, high quality flours, in bulk and bag, sold to commercial bakers, food processors, and distributors in the Lower Mainland of British Columbia plus to export customers in Pacific Rim countries.

The existing Armstrong mill, located in the Spallumcheen Valley of the North Okanagan, will continue to be the base of our milling, cereal operations and will be known as Rogers Foods Ltd. - Interior Division (Armstrong).

Vic Bell, President of Rogers Foods Ltd. said, "Chilliwack has excellent road and rail transportation corridors that will enable us to easily receive raw materials and efficiently ship finished products to our target markets. We also selected Chilliwack as the site of our new mill because of the community's commitment to agriculture and agricultural infrastructure." Vic Bell added, "We would also like to acknowledge the hard work and support put forward by the City of Chilliwack and in particular the Mayor's Office plus the invaluable help and advice of the Chilliwack Economic Partners Corporation (CEPCo) and their staff. The positive attitude of both the City and CEPCo attracted us to focus our search for an appropriate site in the Chilliwack area. Their assistance definitely helped us to decide that we should become long term members of the Chilliwack business community."

About Rogers Foods Ltd.

Rogers Foods Ltd. produces and sells a variety of high quality "branded" and "private label" flour and cereal products for the grocery/retail, bakery/food, export and feed markets. Sales in consumer and industrial sized bags, or in bulk are distributed in BC and throughout Western Canada.

The Company is strategically located so it can obtain grain from Western Canadian farmers, as well as serve its major market areas. While 85% of Rogers Foods Ltd. business is still domestic, the continued growth of export sales to Pacific Rim countries ensures stability of our sales of natural, nutritious, high-quality flour, and cereal products.

During the past fifty-one years, the Company has built upon its reputation for service, quality, and competitively priced, specialty flour, and cereal products.

The Company's employees and management are a motivated and eager team ready to accept the challenges of the future growth of customers, products and milling capacity. The Company encourages a continuous program of training and innovation as it positions itself to meet international quality and sanitation standards.

About Rogers Foods Ltd. Shareholders

Rogers Foods Ltd. is a subsidiary of Nisshin Flour Milling Inc., one of the core companies of the Nisshin Seifun Group, the largest flour milling company in Japan.

Mitsubishi Corporation, one of Japan's leading corporations, is also a shareholder.


...Can anyone please tell me where in this news release Roger's Foods indicates the role of the CWB in its decision to locate in Chilliwack??? All I can find are references to customers (lower mainland of BC and offshore), the City of Chilliwack (and CEPCo), and that it is located strategically to "obtain grain from Western Canadian farmers".

[chaffmeister]

On CWB pricing, mills in Western Canada pay the Domestic Human Consumption (DHC) price that is derived from the Minneapolis track price, converted to an instore Thunder Bay basis. Western Canadian mills then pay that price MINUS the single car freight from their location to T Bay and MINUS another adjustment (I believe to reflect freight to Minneapolis).

Kernel – not sure where your grainco fees and CWB fees come from.

[TOM4CWB]

Chaffmeister;

Thankyou for the Rogers Food statement, I am much more comfortable now, knowing myself personally that they have had the same problems as we have with the CWB...

The CWB...

It makes me disgusted and sick that the CWB would put out the press release that Kernel quoted...

[TOM4CWB]

Talking to others in my farm community gets the thumbs down...

The only reason to build on the BC coast I can see... is so the CWB can be forced into lowering the price we "designated area" farmers get from our wheat... by forcng arbitrage with international wheat markets.

So much for the CWB extracting a premium through the monopoly...

Meanwhile the "designated area" loses one more value adding opportunity...

And the CWB says this was a big victory for us "designated area" grain farmers???

WHAT A SPIN...

[wilagro]

I don't see your logic in regard to the reason for locating in B.C. Most business decisions are based on a multiplicity of factors one of which is closeness to markets. since they intend to export a portion of their production to the Orient it makes sense to locate out west.
Please don't read the CWB as being the cause of every evil under the sun.

[chaffmeister]

There is no doubt in my mind that the decision to locate in Chilliwack was, as Wilagro says, based on a “multiplicity” of factors as listed by Roger’s. Sorry Tom, but I don’t see the CWB as evil here. In fact, I would say that this IS indeed a “victory” for designated area farmers. The only source of grain for this mill will be the designated area. (My sense is that the BC interior doesn’t grow enough food quality wheat to make it an issue.)

What I don’t like is to see the CWB using this as propaganda to spout off about the value of the central desk. If it was true that the CWB provided critical support, Roger’s would have included the CWB in their list of those helping make this happen in Chilliwack. The fact that it didn’t list the CWB tells me that Roger’s does not see it the same way as the CWB.

Let’s be clear, the reasons why Roger’s is building a plant in Chilliwack have nothing to do with the CWB and lots to do with the source of quality wheat, the location of their customer base (Vancouver and offshore) and logistics. Concessions by the City of Chilliwack also probably helped. The CWB has nothing to provide in any of that – if it did, Roger’s would have said so. But also – the CWB did not drive them away from the designated area either.