Agri-retailers work between the farmers they supply and the grain companies that buy the farmers’ crops.
They have expanded in recent years and now hire agronomists and production experts to coach and assist farmers.
So what does the end of the Canadian Wheat Board’s monopoly mean for the hundreds of prairie agri-retailers?
Members of a panel considered that question during the Canadian Association of Agri-Retailers’ recent convention, and like most aspects of the post-monopoly world, there were no definitive answers.
The panelists saw both opportunities and risks.
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“Now everything is fair game, and I think the ag retailer out there can look at how do I fit into the farmer’s farm, and how can I be a better fit for him providing a full service from early in the seeding time right through his marketing and assisting him in his marketing decisions?” said Dale Heide, president of Manitoba grain company Delmar Commodities.
“If he’s got 100 key customers, is there a revenue stream for providing that at a local level, independent of the grain (company) system? Is the farmer willing to pay for that type of service?”
Heide, Brad Vannan of ICE Futures Canada, southern Manitoba farmer Rolf Penner and western Saskatchewan farmer Bill Woods all thought there could be new roles for farm supply and service businesses to play in the post-monopoly world.
Vannan, whose commodity ex-change is offering new futures and options contracts for wheat, durum and barley, said some agri-retailers could offer marketing assistance as a new line of business.
“A lot of the agri-retailers in this room have a lot of experience in providing agronomic intelligence and how to utilize that agronomic intelligence. Now (they could) shift over to the other side of the page,” said Vannan.
“Not just how to produce a crop, but once it is produced, how to get the most out of it. There are opportunities there.”
Woods said the prairie grain industry will likely face more rationalization of grain companies and service providers as the open market re-moves some of the supports that helped smaller players compete.
“When it becomes more competitive, the bigger players have an advantage,” said Woods, a former farmer-elected wheat board director.
He expects farmers will earn less money without the wheat board monopoly, which will not help overall business for farm input and service providers.
New roles might appear for existing companies, and new processing opportunities could attract new players, he added, but it is not a general gain for the agriculture sector if it is based on lower values for grain.
However, Penner thought farmers will make more money and be more interested in new services now that the wheat board monopoly is about to be eliminated.
“There will be more money on the plate for the farmer,” said Penner, Manitoba vice-president for the Western Canadian Wheat Growers.
“There will be a great incentive to increase acres of wheat of those board crops, particularly wheat.”
Penner said risk management is more complicated for wheat than most other crops, and farmers will need to develop skills in that area or find someone who can help them.
Heide said he thinks the CWB system narrowed the range of wheat varieties grown, and that the open system will allow processor needs to be better matched with the varieties promoted to farmers.
That creates another opportunity for local farm service and input suppliers, he added.
