Until last year Canadian wheat farmers had to market their crops through the Canadian Wheat Board. It’s been just over a year since the single desk monopoly ended, meaning western producers could freely market their wheat, barley and other Canadian crops on their own instead of going through the board. Before this change, farmers would have to send their wheat to the board and the board would then export it to foreign markets.
There was some controversy regarding this change. The main argument was that farmers could face selling their crops at a loss when the market was down without the protection of the Canadian Wheat Board. There were also concerns that the quality of Canadian crops would decrease without the regulations of the wheat board, having a negative effect on international markets.
Others believe that regardless of this uncertainty in the market, farmers are no longer regulated by government-mandated marketing and have the opportunity to be more competitive and could increase profits. They also argue that international markets will always pay extra for a premium crop, just as the wheat board did, so the quality of Canadian crops produced should remain high.
Federal Agriculture Minister Gerry Ritz was stated in the Globe and Mail commenting that the change had given farmers the freedom to market their own grain. He said that the ability to choose “the time, price and place” of grain sales has already resulted in higher profits for farmers.
According to Agriculture and Agri-Food Canada, the crop-year average for 2012-13 for wheat was $285 per tonne. Crops are larger and have seen a greater return. In fact, the average pooled return on wheat during the previous five crop years under the wheat board was $257 per tonne. That’s an increase of almost 11 percent.
Canadian wheat prices have been high in the last year, so producers have not felt the strain of uncertainty that was predicted with the fall of the wheat board monopoly. Some believe the success of the 2012-13 year was a result of the new system. Others believe the high prices were a result of major drought and crop failures that occurred in the United States this year. They speculate that because of the drought, this year’s statistics do not show a clear representation of how the marketplace will look without the single desk wheat board.
Farmers must now search for the best buyer, and buyers have to be competitive with their bids. Some farmers choose to sell to the Canadian Wheat Board, which is still operating and now competes in the open market.
Farm to Farm: Buying Canadian Crops
Barr-Ag is a Canadian grain and hay producer with years of experience in international grain export. Offering competitive market prices for Canadian grown crops, Barr-Ag will buy locally farmed wheat, oats, barley, flax, canola, alfalfa, timothy hay, as well as pulse crops for our international customers. Local farmers can sell their Canadian grown crops to Barr-Ag, knowing it will reach a database of reliable, international purchasers.