OUTLOOK, Mont. — Grower groups in the United States are trying to prepare wheat growers in the western part of the country for what could be an influx of wheat from north of the U.S.-Canada border.

That is what’s behind resolutions passed late last month by the National Assoc. of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) calling for an open border between the United States and Canada, and a bilateral wheat trade. Last year the conservative Canadian government passed legislation to eliminate the Canadian Wheat Board (CWB), a longtime monopoly on the wheat trade in that country.

Barring any legal impediments, the CWB will lose its decades-long monopoly on the Canadian wheat trade beginning Aug. 1.

“There are some economists who say the wheat won’t move very far,” said Gordon Stoner, president of the Montana Grain Growers and NAWG director. He is also chair of the Joint International Trade and Policy Committee, which is made up of NAWG and USW members.

“Every expectation is that Canadian wheat will come south. Historically, U.S. prices have been better than Canadian prices. The (CWB) had a captive clientele. Their growers had to sell wheat through the Wheat Board. Canadian growers are just like U.S. growers. They want the best prices they can get.

“I fully expect arbitrage will level out the prices between Canada and the U.S. That’s certainly why we passed the resolution, that there has to be reciprocity. The market should determine where grain should flow. I believe in the free market. I want to make it very clear to my farming friends that there might be some small dislocations. We may have some Canadian farmers bringing a lot of wheat into the U.S.,” Stoner added.

“Overall, it’s a good thing, but there’s drawbacks.”

He said it only makes sense that Canadian wheat growers living close to the United States might want to take their wheat to grain elevators south of the border. Emotions can run high on this issue. Stoner said in the 1980s some Canadian truckers who were trying to bring Canadian wheat into the United States were reportedly “roughed up.” He explained in actuality, the truckers were severely beaten.

What’s different now is a new law is in place. “There’s a court challenge,” he said. “I can’t tell you what’s going to happen with certainty, but every indication is it’s going to happen.”

Not everyone is in favor of getting rid of the CWB. According to the National Farmers Union (NFU) of Canada, the CWB held a vote last year to gauge the support of its members. The NFU states on its website that a clear majority of CWB members voted in support of what it calls the “single desk.”

It also says that legislation eliminating the CWB is “in defiance of existing legislation that requires a farmer vote before making any changes to the CWB’s single desk. Because of trade deals such as NAFTA (North American Free Trade Agreement), if the CWB’s single desk is eliminated, it will be impossible to reinstate it later.

“The National Farmers Union says farmers, not MPs (Members of Parliament), should decide the future of their grain marketing agency and we are working to save the Canadian Wheat Board.”

In a recorded presentation to the CWB-Regina last August, CWB Director Rod Flaman told his audience he used to be for “dual marketing,” but changed his mind after he saw confidential price premiums.

“The U.S. is not our biggest customer,” Flaman said. “Hauling across the border, that’s a non-starter. First of all, you’re going to drive the premiums out of the market; secondly, you’re going to erase the identity of Canadian wheat.

“It’s going to be commingled with U.S. wheat, which is a lower quality, and they’re probably going to shut the border down. And then you’re probably going to have to compete with Indonesia instead of the United States.”

Herb Axten, a wheat grower in Minton, Saskatchewan, just north of the Montana border, is a friend of Stoner’s and a fierce advocate for an open market. He said, angrily, that a few years ago people who were tired of the lack of transparency tried to market grain south of the border and were sometimes arrested and put into jail.

“We’ve been fighting for this for the past 40 years,” Axten said. “Our biggest argument is that there was no price transparency under the Wheat Board. We had no control all along the line until it got to the end user. Now we’re going to have price transparency.”

Axten said since the new law was passed in December 2011, a major investor has come forward with $50 million to invest in a pasta plant in the Minton area.