Grain producers will soon have access to a new web based tool aimed at improving market transparency and assisting farmers with grain marketing decisions.
The Crop Data and Price Reporting project, launched by the Alberta Wheat Commission, will gather and publish market information on a website designed for primary producers, grain brokers, market advisers and other industry participants.
The information is expected to include cash grain prices offered at delivery points across the West, as well as data on grain movement, stocks, regional basis levels and other factors that influence farmgate returns.
The wheat commission announced the new initiative Jan. 28, saying it will “significantly improve farmers’ ability to make well-informed marketing decisions and maximize the value of their crops.”
The start-up phase is expected to cost about $1 million.
The wheat commission developed the project with FarmCo, a grain marketing consulting firm from Winnipeg run by John DePape.
DePape was a proponent of market deregulation before Ottawa eliminated single -desk grain marketing in Western Canada.
“This project will close a major information gap related to cash grain prices and market data,” said commission chair Kent Erickson.
“This information will significantly improve farmers’ access to market-related data to capture the best marketing opportunities available to them.”
Farmers took on added responsibility for marketing their grain when Ottawa eliminated the CWB marketing monopoly for most types of wheat and barley in August 2012.
Since then, many growers have complained about the lack of accurate information on western Canadian grain pricing and related data.
DePape described the first phase of the project as a needs assessment.
“We’ll be consulting with the trade, with farm groups, farmers, market analysts, government — basically anybody that wants to talk to us — about what they need in terms of market information.”
The project will not focus solely on publishing cash prices, he added.
It will look at any information that improves farmers’ ability to sell grain and maximize returns.
“It’s not all about price, although that is a large part of it,” he said.
“For example, we’re hearing already that farmers want better pricing visibility on the Prairies but also at destinations like Vancouver, Chicago, Thunder Bay or wherever.”
The system could also include data such as year-to-date grain movements, domestic and global stocks, basis levels, grain quality and grading.
DePape said some information included in the system might be available through existing organizations.
Quorum Corp, Canada’s federally appointed grain monitor, has already been contacted. The Canadian Grain Commission is another possible source.
“We see this kind of information as a public good, and I think markets function better when this type of information is readily available,” said DePape.
The information that is compiled will eventually be published on a website known as Price & Data Quotes (PDQ).
A test version of the site has been launched at www.pdqinfo.ca to introduce the concept and gather feedback from potential users.
In a recent post on the PDQ website, FarmCo vice-president Russ Crawford said current and accurate information on prices and events affecting price are critical for farmers.
Values on futures exchanges are an important consideration, but they don’t offer a complete picture of farmgate values.
Basis levels during the past two years have varied significantly from location to location.
Cash values for commodities without a futures contract, such as peas, lentils and flax, can be particularly difficult to determine.
Crawford said grain sales to the increasingly important U.S. market also highlight the need for enhanced marketing information.
“Although record amounts of wheat, canola and other crops are being shipped to the U.S., there is no effective information source providing data on these exports until months after the fact,” he wrote.
“This is not good enough if you’re making marketing decisions today.”
DePape said he expects the needs assessment component of the project to be completed within the next two months.
The web-based service should be functional by Aug. 1.
Erickson said the system would ideally be self-sustaining.
Organizers have not made decisions yet on what methods could be used to generate revenue. One possibility is that two levels of information could be offered on the website, one providing basic market information as a free public service and another providing a more detailed information package available on a user-pay basis.
The commission represents wheat farmers in Alberta, but the new project is expected to benefit producers of various commodities in all prairie provinces.
“We see the PDQ project as strategic and necessary for farmers to compete on the international stage,” said Erickson.
Agriculture Canada will contribute as much as $742,000 through the AgriRisk Initiatives program to help launch the project.
The wheat commission will make in-kind contributions of about $200,000.