SASKATOON – Some barley growers say they’re being shut out of lucrative world markets by the Canadian Wheat Board.
The board says it’s simply trying to keep returns from the feed barley pool account as high as possible.
And a market analyst who’s not affiliated with either group says the board is probably doing the right thing to achieve that goal.
It all adds up to the latest exchange in the increasingly nasty war of words between the board and some Alberta-based barley groups who want to end the marketing agency’s export monopoly.
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In separate press releases issued last week by the Western Barley Growers Association and the Alberta Marketing Choice Implementation Group, the board was accused of manipulating barley markets at producers’ expense, punishing open market supporters, mismanagement, insensitivity and corruption.
It left wheat board commissioner Ken Beswick bemoaning the depths to which the debate over grain marketing has sunk.
“There’s an idea that the end justifies the means, and the means can include unfair and untrue comment to reach certain ends,” he said in an interview. “The small-minded and mean-spirited attitude that’s out there does not represent the industry that I’ve been proud to be involved in all my life.”
All of this was triggered by the board’s March 18 announcement that it would take only 50 percent of feed barley committed for delivery under the Series C contract.
The board said because prices have declined recently and prospects for later in the crop year are uncertain, it doesn’t want to risk undermining the strong returns now being forecast in the Pool Return Outlook.
Farmers shouldn’t be surprised, said Beswick, since the board described this strategy last fall.
“We said we were going to protect the value of the PRO in order to provide comfort to those who were prepared to commit barley to us earlier rather than later,” he said. “Since we said it, we’re going to live with it.”
Buck Spencer, president of the Western Barley Growers Association, said the board’s action “makes no economic sense.”
World feed grain markets are strong and the board last week increased the initial payment for feed barley by $10 a tonne.
Spencer said there’s lots of barley in the country and if the board isn’t going to export it and if farmers aren’t allowed to export it on their own, domestic stocks will become surplus and soften local prices.
“It’s a definite attempt to control and manipulate the marketplace by the board,” he said.
Protecting the return
But Charlie Pearson, a grain market analyst with United Grain Growers Ltd., said the board is probably doing the right thing if its goal is to protect the pool return.
Any barley the board takes in now might have to be sold into a weaker market, he said.
World prices have slipped by about $10 (U.S.) recently and may drop even more if the barley-laden European Union decides to enter the market.
The board perhaps should have sold more barley earlier in the year, he said, although a lack of delivery commitments from farmers may have prevented that.
Pearson added an aggressive export program now would drive up local prices, making it hard for the board to secure contracted supplies.
Tom Jackson, secretary of the Alberta marketing choice group, said he thinks the board is punishing open market supporters by manipulating sales and stocks in order to keep a lid on domestic prices.
“They’re saying ‘you’re a very bad person for delivering to the non-board’,” he said, and rewarding those who deliver to the board.
Beswick said that’s ridiculous, adding that the board’s interest is seeing barley growers get the highest possible return, no matter what market it comes from.
