In retrospect, says Canadian Wheat Board director Larry Hill, the board could have done things differently during the 2002-03 marketing year.
“In hindsight, it would have been a lot better last year to have done two things – bought up a whole bunch of Canadian dollars and sold as much grain as we could at the peak,” Hill said March 11 after an appearance before the House of Commons agriculture committee.
Currency purchases in 2002 would have benefited from the dramatic increase in the value of the Canadian dollar in 2003.
Read Also
Man charged after assault at grain elevator
RCMP have charged a 51-year-old Weyburn man after an altercation at the Pioneer elevator at Corinne, Sask. July 22.
Selling or at least pricing more of the Canadian wheat crop during a short price peak in autumn 2002 could have earned farmers close to $3 per bushel more on their wheat. After the spike, wheat prices plummeted.
“We miscalculated, as the entire trade miscalculated, how much lower-priced grain the former Soviet Union would be able to get to market,” he said. “We expected the peak to last longer.”
The experience is leading the board of directors to reconsider its policy of selling the Canadian wheat crop throughout the year, trying to balance the inevitable lows with hoped-for highs. A planning session in April will consider giving board staff more discretion to sell or lock in prices during what they consider unsustainable peaks in world prices.
“The fact is we can’t price the whole crop at a peak but we can price a significant amount of it,” said Hill after a grilling by Conservative MPs about board pricing policies. “So the question mark is, do we allow producers to do that or do we allow the board to do it? What we’re thinking is we have to give management discretion to do a certain amount of that and then put pricing options in place to let farmers do their part of it.”
The board’s concession that it could have made different and better decisions last year did not blunt attacks by Conservative MPs who believe the CWB should lose its monopoly.
Alberta MP and party wheat board critic Leon Benoit said the board’s failure to sell more at $7 per bu. meant farmers ended up receiving closer to $4 per bu.
“It is unfortunate indeed that $3 was left on the table and lost to farmers at a time when farmers simply could not afford to lose that money,” he said in the House of Commons March 12. “It clearly is time for farmers to be given a choice to market through the wheat board or not, as they choose.”
Benoit also wondered during committee if Agricore United would face wheat board retaliation because delegates to the AU convention voted to support an end to the CWB monopoly.
“I can give you absolute assurance,” CWB president Adrian Measner responded. “There will be no retaliation. We never have and never will.”
“That’s debatable,” Benoit shot back.
Meanwhile, Measner said the federal government will hold consultations this spring and summer on whether to add a “market acceptability” requirement to the potential registration of genetically modified wheat. The board says 80 percent of its customers do not want GM wheat and might quit buying from Canada if it is approved for unconfined production.
