SASKATOON – A war of words has erupted over the Canadian Wheat Board’s selling job in the feed barley market.
In a strongly worded press release, the Western Barley Growers Association criticized the wheat board’s sales performance in feed barley in 1994-95 and repeated its call for a voluntary pooling system for barley.
“The WBGA strongly believes that the CWB should be held accountable for this ‘marketing debacle’ which has cost producers to lose so much money,” said association vice-president Darwin Kells of Elfros, Sask.
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The wheat board responded by saying this year’s experience proved voluntary pooling wouldn’t work and said the association should do a better job of checking its facts.
“The press release is so full of inaccuracies that you’re almost afraid to give it legitimacy by responding to it with a formal statement,” said board spokesperson Deborah Harri.
The association’s ire was triggered by the wheat board’s decision to reduce the estimated pool return for the 1994-95 feed barley pool account by $14 a tonne to $103 (basis export position). The board said high domestic prices made it hard to get barley, and the agency had to pass on anticipated sales to the lucrative Japanese market.
Criticisms and comebacks
In its press release, barley growers raised a number of criticisms and questions about the board’s actions in the past year. Here are some of those comments, along with the board’s response:
- The association said the board may have lost money buying barley contracts from the U.S. in order to make sales to Japan, a market it has since lost to the U.S.
Harri said the barley originally sold to the U.S. was re-sold at a much higher price in Japan. The deals produced a net gain of $18 million to the feed barley account. And she said it’s not true that Canada has “lost” the Japanese market to the U.S.
- The association asked whether the board planned on moving the close of the 1994-95 feed barley pool to an earlier date in order to avoid a deficit. Harri said the pool will be closed when all 1994-95 deliveries can be priced and there will be no deficit.
- The association criticized the board for shipping barley by rail from Thunder Bay to California at an estimated cost of $55 a tonne. Harri said that was a “sound business decision.” Malting barley shipped to the Lakehead was rejected on unload and had to find a new home. Rail rates from Thunder Bay to California were not much more than shipments from southern Alberta.
- The association wondered if the board would take money out of the malting barley pool to prop up returns in the feed barley pool. The answer is “a definite no”, said Harri.
- The association said that in January the board asked for export standards for foreign material to be raised to 3.0 from 2.5 percent in order to fill Japanese demand for barley graded 1 CW. Harri said the standard had been dropped from 4.0 to 2.5 but that proved difficult to achieve. She said the board supports strict standards in order to meet customer demands.
