Farmers usually appreciate Canadian Wheat Board payment adjustments. But that was not the case for Kirk Torkelson, an organic farmer who recently received an unexpected invoice from the grain marketing agency.
In November 2002, the Beaubier, Sask., producer sold 76 tonnes of No. 2 CWRS wheat to a commodity broker through the board’s producer direct sale or buyback program.
Since the grain was destined for an export destination in the United States, Torkelson made a transaction to buy his grain back from the board. It cost him $1,430.77, which he paid.
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A year later, on Dec. 16, 2003, he received a second invoice from the wheat board saying he owed an additional $4,630.13 because the first bill was calculated using estimated interim and final payments that turned out to be too optimistic.
It was an unpleasant surprise for the organic producer.
“I wasn’t planning on this bill. Things are down. We have a mixed farm. We have cattle too and the income is way down from the year before,” he said.
“I told them I don’t have the money to pay the bill now. They said, ‘we’ll just take it from your grain sales in the future.’ “
Torkelson can’t understand why he should have to pay for what he considers the wheat board’s “incompetence.”
When he completed the buyback in November, the initial price for his wheat was $178.80 per tonne. The board estimated he would receive another $118.10 per tonne in interim and final payments.
Later, it was determined that the pool only returned $57.10 in further payments, a difference of $61 per tonne that Torkelson owed the board.
“I picked a prime time to sell that grain but they turned around and picked a poor time to sell theirs and then I have to take the loss,” said Torkelson.
“I don’t even want to sell grain through them anymore if there’s a risk that I have to take the loss because of their incompetence.”
CWB organic marketing manager Donna Younghdahl said wheat prices peaked in the fall and plummeted throughout the spring and summer.
“The projected pool price ended up being a lot lower than was initially thought because the markets fell and the Canadian dollar strengthened.”
It was a turn of events few predicted, but Torkelson should have realized the consequence.
“It appears that he wasn’t following the pool return outlook and he wasn’t keeping abreast of what the market was doing. If he had done that, he would have been more aware,” said Younghdahl.
The grower could have protected himself from market volatility by using one of the board’s fixed price options.
She also pointed out the producer would have received an organic premium for his wheat on top of the pooled price.
This isn’t the first time the buyback program has been criticized by an organic farmer. It was also denounced by Prairie Pasta Producers who at one time said the policy impeded plans for farmers to deliver durum to their own mill.
Wheat board director James Chatenay sympathizes with Torkelson.
“It’s unfortunate that he didn’t live in Ontario. He could have saved himself a whole bunch of headaches.”
Chatenay, who is pushing for an open market for wheat and barley, said he feels “extremely sorry” for the organic farmer.
“The buyback program has to be evaporated. Why in the hell should you buy your own grain?”
CWB chair Ken Ritter suggested a less drastic fix. He said the details of this case appear to warrant an investigation or review of the producer’s particular circumstances. He encouraged Torkelson to write him and request such a review.
“If that policy proves unfair, we’ll certainly address it,” said Ritter.
