An Economic Analysis of Removing the Canadian Wheat Board's Single Desk Authority and Rail Deregulation in Western Canada

Wheat is the most common cereal crop grown by farmers in Western Canada and is mainly used for export. The marketing structure for wheat in Western Canada is unique. The Canadian Wheat Board (CWB), a statutory marketing board, is mandated to sell all wheat grown by farmers for human consumption in Manitoba, Saskatchewan, Alberta and the Peace River region of British Columbia. Using historical price and basis data, this research attempts to quantify the economics of the current marketing structure for wheat in Western Canada. Simulations are developed to determine the economic profits and risk that could have been realized in an open market considering scenarios for three potential changes in the grain handling and transportation system (GHTS) and four alternative marketing strategies. Each are evaluated using a utility-based risk model to ascertain the most preferred marketing environment in terms of expected profit and risk.