The head of the federal grain monitoring agency says a study on grain marketing commissioned by the Alberta government misuses the agency’s statistics.
“I don’t think there was any malice, but they definitely misused the statistics,” said Mark Hemmes, president of Quorum Corp.
The study, conducted by Informa Economics of Memphis, Tennessee, concludes that the Canadian Wheat Board marketing system costs prairie farmers $450 to $628 million a year in lost revenue and higher system costs.
Among those expenses, according to the study, are higher costs of handling and transporting CWB grain to port compared with non-board grain.
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The study said that based on seven years of Quorum statistics, the average export basis is $55.80 per tonne for wheat and $68.64 for durum. It compares that unfavourably with the basis of $35.37 for canola and $67.19 for peas.
Hemmes said that’s not a fair comparison because two different methodologies are used in calculating the basis for CWB grain and canola.
Rather, they are designed to indicate whether the export basis is going up or down over time for an individual commodity.
A statement on the Quorum website specifically cautions against using the export basis figures to compare marketing systems.
Meanwhile the CWB released a harsh critique of the Informa report.
“This study is badly flawed,” said chief executive officer Ian White.
The board identified a number of what it called flaws in the report:
- It improperly discounts significant premiums earned by the CWB for certain kinds of wheat in certain markets.
- It makes incorrect assumptions about what grades and quality of wheat the CWB sells to particular markets and looks at only 11 of the 70 markets to which the board makes sales.
- It ignores that the U.S. sells 60 percent of its wheat into its high-priced domestic market, while Canada exports 80 percent to lower-priced overseas markets.
