Canadian Wheat Board University Of Lethbridge

2 1 CWRS 13.5 vs. DNS 14 US$ /bu Average Price Received (USDA)Average Elevator Bid DNSNDMTNDMTDPC OfferedDPC PaidPRO US$/bu Aug $ 5.46 $ 5.61 $ 5.84 $ 6.06 $ 4.85 $ 4.83 $ 5.08 Sep $ 6.42 $ 6.09 $ 7.03 $ 7.45 $ 6.43 $ 6.39 $ 6.59 Oct $ 6.69 $ 7.55 $ 7.98 $ 8.50 $ 6.99 $ 7.12 $ 6.50 Nov $ 6.81 $ 7.08 $ 8.24 $ 8.59 $ 7.22 $ 7.57 $ 6.33 Dec $ 7.60 $ 7.29 $ $ $ 8.70 $ 8.58 $ 7.32 Jan $ 8.50 $ 8.40 $ $ $ $ $ 7.99 Feb to date $ $ $ $ $ 8.97 Weighted Average $ 6.50 $ 6.56 $ 9.69 $ $ 7.37 $ 6.70

3 1 CWAD 12.5 vs 1 HAD US$/bu Average Price Received (USDA)Average Elevator Bid DurumNDMTNDMTPRO US$/bu Aug $ 6.93 $ 6.64 $ 7.32 $ 7.31 $ 6.65 Sep $ 9.73 $ 7.05 $ 9.66 $ $ Oct $ $ 9.50 $ $ $ Nov $ $ 9.13 $ $ $ Dec $ $ $ $ $ Jan $ $ $ $ $ Feb to date $ $ $ Weighted Average $ $ 8.15 $ $ 15.36

4 SS CW Two-Row vs US Malt Barley US$/bu Average Price Received (USDA)Average Elevator Bid Malt BarleyNDMTNDMTPRO US$/bu Aug $ 3.38 $ 3.65 $ 3.15 $ 3.20 $ 4.15 Sep $ 3.86 $ 3.73 $ 4.40 $ 4.19 $ 5.07 Oct $ 4.42 $ 4.02 $ 4.96 $ 4.81 $ 5.09 Nov $ 4.53 $ 3.22 $ 4.62 $ 5.02 Dec $ 4.16 $ 5.15 $ 4.88 $ 4.61 $ 4.90 Jan $ 5.30 $ 4.13 $ 5.39 $ 4.77 $ 4.92 Feb to date $ 4.89 $ 4.64 $ 5.00 Weighted Average $ 4.27 $ 4.12 $ 4.61 $ 4.41

5 Global Commercial Storage

6 Producer Cars

7 Railway Service Performance

Logistical Issues Incremental Capacity – Maximizing use of BN and trucking directly to the U.S. – Taking advantage of lower freight rates Lowering Supply Chain Costs – Churchill – Producer cars – Commercial agreements – Tendering New rail allocation system introduced by CN Feb. 1, 2008 – a system where grain is “pushed” from origin, instead of being “pulled” to destination – 6 grain shippers have applied to CTA for emergency relief

9 Railway Costing Review Freight cost on grain movement single largest marketing cost to farmers Prior to the railway revenue cap – transportation costing review every four years Need to reduce farmer freight costs CWB requesting that the CTA pursue the continuation of regular costing reviews to ensure productivity gains are shared with farmers

10 Costing study What is fair and adequate railway compensation? – July 2007 Travacon Costing Study reviewed and rail compensation Result: railways have been earning more than $6 per tonne in excess of fair and reasonable levels (50 per cent contribution rate versus 20 per cent)

11 Global agriculture World-wide, the agriculture industry is consolidating: – Four firms control over 70 per cent of world grain trade – A handful of companies dominate agriculture input production and sales – Farmers must vertically integrate to succeed

12 Global concentration Billions of dollars Canadian World wheat trade is controlled by a handful of very large players Annual company revenue (2006 available data)

13 Domestic concentration Viterra, Cargill and JRI – 5 of 6 terminals in Vancouver and Prince Rupert – 3 of 5 terminals Thunder Bay Rationalization of CN’s and CPR’s networks increases captivity of farmers Malting, milling, crushing, foreign owned

14 Concentration Canadian Industry – Millers – Maltsters – Handling companies 4,947 elevators(1970) 1,300 elevators (1998) 950 elevators (2000) 376 elevators (2005) 284 delivery points Transportation – 6 major North American Railways – Short lines

15 Growing Region Distance from Water (kms from center of growing region to port) USA France Australia W. Canada Argentina Russia , Ukraine675

16 Always a Wheat Harvest Somewhere

17 Bilateral and Regional Free Trade Agreements Canada has 6 concluded agreements, 2 pending implementation and 6 under negotiation. Canada’s key agriculture competitors are aggressively pursuing bilateral trade deals with key customers for Canadian grain. Canada is negotiating with: – Colombia, – South Korea, – Singapore, – Dominican Republic, – and Central America - 4. Continue to lobby the government for additional agreements with markets such as Morocco, Japan and South-East Asian nations.

18 Northern plains percent soil moisture: February 20, 2008

19 U.S. HRW February 2008

20 Western Canada Soil Moisture (November 1, 2007) 0 mm to 25 mm (Very Dry) 25 mm to 50 mm (Dry) 50 mm to 100 mm (Moist) >100 mm (Wet) Millimeters of Available Soil Water

21 Cdn$/tonne In store Vancouver or St. Lawrence CWRS Pool Returns to Farmers $390 $360

22 World Durum Production vs Consumption

23 Major Exporters Durum Wheat Exports (July-June) Source: CWB, IGC

24 Cdn$/tonne Durum Wheat Pool Returns to Farmers In store Vancouver or St. Lawrence $125 $468 $439

25 Pricing Alternatives The following pricing alternatives are available to farmers: – Early Payment Option – prices based on Pool Return Outlook (PRO), best used as a cash flow tool for earlier payment. – Basis Price Contract – can price basis or futures separately. – Fixed Price Contract – provides a locked-in price. – Daily Price Contract – similar to the FPC except that it offers a spot basis and cash spreads based on the U.S. market. Note: Pricing contracts only – not delivery contracts PPO contracts require 100% application of tonnage

26 Direction and Planning July 2007 board of directors planning session – unanimous agreement to focus on improving the flexibility and control farmers have in pricing and delivery Goal to increase farmer flexibility and choice with more options within the single desk A complete overhaul of programs to be considered where appropriate Consider different programs for different crops / classes to address their specific marketing circumstances

27 Objectives Flexible and easy for farmers to use Provide farmers fair, reasonable and timely access to delivery Provide more predictable timing of delivery Better match farmers’ deliveries with CWB sales requirements – Improved logistical efficiency – Increased ability to capture sales opportunities – Better overall return Farmers want a daily cash price Program risks must be manageable (price and basis risk)

28 Improvements to existing programs for Changes approved by board of directors in October Enhanced guaranteed delivery contracts Delivery exchange contract (DEC) expansion Early payment option improvements Expanded direct selection (malt barley) Cash buying (feed barley)

29 Moving Forward Consultations with farmers on new programs and program amendments for malting barley, CWRS and durum Programs approved by the board of directors in Nov. and Jan. board meetings: CashPlus for malting barley Pricing option year round on tonnage declared up front – CWRS pilot program to begin this July for Defined delivery contracts – pilot program to begin August 2008 for CWRS Churchill specific contract Consultations on minor classes (CWRW, CPSR, CPSW, CWES, CWSWS)

30 Future Programs in the works for Lock in grade & protein spreads To enable farmers to lock in grade & protein spreads that are more reflective of market conditions – Based on the PRO – For FPC/BPC contracts Additional EPO lock-in options To provide more payment values to choose from (e.g. 75, 85, 95 per cent of PRO)