In the days before harvest, farmers need to check their combines to make sure they are running smoothly.
But this year some are going to have to give up maintenance time to do some reading and make phone calls.
That’s the situation facing any farmer who signed sales contracts with grain companies, maltsters or anyone else with the belief that the Canadian Wheat Board’s barley monopoly would disappear Aug. 1.
“You’ve really got to go back to the maltster themselves and ask them what they’re going to do,” said Alberta Agriculture marketing expert Charlie Pearson.
Read Also
One Beer Market Updates Day 3 – Lentils and beef
Day 3 of the One Beer Market Update at Ag in Motion 2025.
“A lot of farmers are going to have to sit back and read their contracts and see what they say.”
The Federal Court decision that spoiled the federal government’s bid to break the barley monopoly has left hundreds, possibly thousands, of barley contracts in limbo.
The board has said it will try to respect all the contracts signed.
“We need to look at all of these (signed contracts) beside the sales that were made by the grain companies and we will get back to everybody as soon as we can as to what can be done to make arrangements for these,” said Gord Flaten, the board’s marketing manager.
Pearson said he feared the board’s decision to discuss each contract with each producer might mean some get better deals than others.
Flaten said the board wants to clear up the marketing mess as quickly and justly as possible.
The board is urging all producers who signed contracts with American buyers to call 800-275-4292, or e-mail the board at questions@cwb.ca.
John Duvenaud, who publishes the Wild Oats marketing newsletter, said the continuation of the barley monopoly will inconvenience farmers who have been relying upon sales contracts they made over the summer.
But there is little danger of farmers being tied to contracts that they can’t legally deliver.
“All of the contracts I know have clauses that say if the board did not lose its monopoly that the deal is off,” said Duvenaud.
“That’s been standard procedure all along.”
Pearson said farmers should read the fine print of their contracts just to make sure they understand what they signed.
The good news for barley growers, said Errol Anderson of Pro Market Communications, is that barley demand is strong domestically and internationally.
“Saudi Arabia is back in the market, and they’re there whether or not the board has a monopoly,” said Anderson. “That export market is here to stay for quite a while.”
That country only buys feed barley, but it pays high prices and those feed prices shore up higher malting barley prices.
Export demand will combine with strong domestic demand and a heat-reduced crop to give barley marketers a chance to make good price sales.
“The maltsters are going to be running like crazy to secure malt barley. They have to get really aggressive,” said Anderson.
“My view is that it should be a minimum (delivered) $4.50 (per bushel) upwards to $5 to the grower.”
The day after the court decision was announced, barley futures prices on the Winnipeg Commodity Exchange locked limit down, but Anderson said that was caused by an export price premium coming off, not any sense in the market that demand would be curtailed.
“It really doesn’t change the fundamental picture of barley,” said Anderson.
Until recently barley futures had been priced in terms of domestic feed value, but with the federal decision to break the monopoly, users began using it to hedge export barley sales, driving up the price.
Anderson said the hot market means any producer of good barley will do well this year, but that won’t satisfy everyone.
“Anyone supporting the open, dual market, it’s got to be a major blow and disappointment to them, and somewhat frustrating that the federal government can allow this to happen.
“It feels like the continental market a few years ago, and when that disappeared.”
Farmers will almost certainly do well with their malting barley this year, Anderson said, but they’ll need patience to get through these disruptive times.
“Let the wreckage clear.”
