This year felt like the year the prairie cash grain market came of age.
As with all situations of life, growth and aging, this one contains elements that have flourished and prospered and those that have weakened and died.
While marketing platforms, marketing advisers and price competition grew more transparent and robust, some post-Canadian Wheat Board hopes sickened and died.
The most remarkable aspect of the five-year anniversary of the end of the CWB’s monopoly powers was how unremarked it went this summer, surprising almost everybody with how quickly and quietly the anniversary had crept up.
That was pretty strong proof that the post-CWB grain market has not been a disaster in most farmers’ eyes and testament to the argument that the board monopolies weren’t playing an essential role in farmers’ economic sustainability.
Also mostly unremarked was the burial of Winnipeg’s ICE Futures Canada wheat, durum and barley futures contracts, which had never showing anything like real lives.
Lots of work went into creating the contracts, which were designed to represent the main crops that would no longer be marketed by the CWB. Many hoped a Canada-specific grains futures marke could be successful.
However, in the end farmers, marketers, processors, importers and traders voted with their grain and money and avoided the contracts.
After being kept on life support for a couple of years, ICE pulled the plug on the contracts Oct. 26.
What the fading of the CWB and the death of Canadian grain futures have left behind is a robust and dynamic cash market for grains.
Following a messy couple of years right after the CWB’s disestablishment, farmers should now have no trouble finding prices, buyers and accurate price discovery. A plethora of broker marketplaces, marketing firms and price discovery platforms now exist to give farmers a quick and easy way of finding out who wants their grain and for how much.
“Cash is king in the western Canadian grain market,” FarmLead founder Brennan Turner said to me during Grain World, the revived Canadian grain industry conference in Winnipeg that almost died along with the CWB.
Turner’s FarmLead site allows farmers to find out what grain like theirs is selling for in their area. It uses real prices and lets a farmer chart present and deferred price trends. It’s the kind of thing many thought wouldn’t be possible in the post-CWB world, but has flourished. In fact, Turner’s foray into cash market price transparency has spread from Western Canada into dozens of U.S. states.
At Grain World, Lyle Ehrmantraut’s Ag Exchange Group marketplace got time in the spotlight.
It’s another platform through which farmers have been finding prices and buyers and making the sorts of deals that many feared wouldn’t be possible in the post-board environment.
Grain World, once a CWB hallmark, is now put on by a marketing advisory firm, FarmLink Marketing. That firm’s meteoric rise since 2012 has been amazing.
It’s hard to find a more perfect example of grain market evolution than seeing the CWB eliminated, leading to the near demise of Grain World and then its sudden resurrection with the new energy of the dynamic and booming prairie grain market.
AgriTrend has expanded in a similar way, helping fill the CWB void and providing farmers with the kind of customized marketing that is as typical of this new era as pooling was in the old era.
For those who don’t want to employ comprehensive marketers such as FarmLink and AgriTrend or the many independent operators available today, or rely upon the grain companies looking after them, the Alberta Wheat Commission’s PDQinfo.ca website offers real regional average grain prices. It’s just another information tool that helps an independent farmer when approaching a prospective buyer.
A lot of people worried that the prairie grain market would sink into a dark age as the CWB disappeared with a handful of buyers controlling price information and preventing price transparency from existing in any real way.
However, as we ease into 2018, it’s nice to see that the cash market has survived and thrived.