MINOT, N.D. — When it comes to selling grain, Kevin Archibald isn’t afraid to state his opinion openly: it has become apparent over the past hour of conversation.
“I guess I’m not a big orderly marketing kind of guy,” the Killarney, Man. farmer said as people milled around him at the annual workshop put on by the Manitoba North Dakota Zero Tillage Farmers Association.
Archibald, 37, said farmers his age are agriculture’s “generation X” — caught in economic circumstances that make it almost impossible to get ahead.
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Since he started farming in 1978, he squeezed all the efficiency he could from his farm operations and managed his financing as interest costs exploded and commodity prices sank.
“It got to the point that we were doing all the things we could on the production side, we’d reached the limit,” he said. “The only way was to starting looking more broadly at marketing.”
Archibald’s quest for profits prompted him to join his local marketing club three years ago. In doing so he became part of a phenomenon — and a paradox — that has swept the Prairies.
Marketing clubs and their thousands of members have become influential vehicles for the growing debate over the future of the Prairie grain handling system.
They raise several key questions. Are they agents for change? If so, are they strengthening or undermining the existing orderly marketing system?
Some view marketing clubs as a way for farmers to learn the advantages of the system built by their forefathers.
Lowe Farm farmer Bill Toews said he’s gained a new sense of respect for the job done by the Canadian Wheat Board since he joined a marketing club three years ago.
He estimates it cost him 25 cents per bushel to market his canola last year by forward selling and hedging in the futures market. By comparison, it costs about 3.5 cents per bushel to market wheat through the Canadian Wheat Board.
“It’s made me more appreciative of the sophistication of our Canadian Wheat Board system,” he said.
But Toews, who gave up a job as a university professor to take over the family farm in 1976, sees within his own club frustration with the current structures as farmers gain confidence in their marketing ability.
At their core, marketing clubs are economic self-help groups. As such, they have helped foster a group of farmers who are willing to do more to help themselves; more than the present system allows.
While the knowledge Archibald has gained about marketing has put more dollars in his pocket, it has also led him to conclude he’s a modern entrepreneur working within an antiquated system.
Last year, he estimates he earned an extra $40 an acre by buying his feed wheat back from the Canadian Wheat Board and selling it into the United States.
He questions why he should pay the board so he can sell his own grain.
“The system we have in place doesn’t serve my generation of farmers,” he said. “We’re frustrated, we see what we can do ourselves and we just want the chance to do it. We’re not ashamed to say we want to get rich.”
Far from enjoying the cushioning effect that pooled price averaging provided farmers of his father’s generation, Archibald has come to view Canada’s system of co-operative marketing as an impediment to financial security.
Need the chance
“Unless I get a choice to market where I want, I’ll never get those good years. I can’t see myself ever having those, unless I get the chance to do my own hard work and just … go for it.”
Members of his club met with their Member of Parliament Glen McKinnon (Lib – Brandon Souris) last winter to press home their call for more marketing freedom.
The Killarney Club is among a number of clubs that have publicly thrown their support behind the concept of ending the Canadian Wheat Board’s monopoly over exports.
It’s an agenda that closely matches that of farm organizations such as the Western Canadian Wheat Growers Association and the Western Barley Growers Association.
They want the option of opting out of the co-operative marketing system.
Have the same view
“I have yet to meet a marketing club whose views are not consistent with our own,” said Blair Rutter, a Winnipeg policy analyst with the Western Canadian Wheat Growers Association.
The association voted at its most recent annual meeting to support a continental North American market for both barley and wheat.
“It’s not like there’s a network … but I think our efforts compliment what it is that they’re trying to do,” he said. “In that sense, we are like-minded.”
Long-time supporters of co-operative marketing say the clubs reflect a changing attitude on the Prairies.
In their view, the trend toward the use of producer cars and the heightened calls for an end to the Canadian Wheat Board’s monopoly reflects a growing willingness by farmers to go it alone.
“There is a cultural change taking place,” said Richard Lemoing, a Manitoba farmer who serves as a Manitoba Pool Elevators delegate. Lemoing said young farmers are several generations removed from the original founders of orderly marketing on the Prairies. He said it’s common, although regrettable, for co-operatives to undergo a “third-generation crisis” in support.
From the wheat board’s perspective, this is one of many pressures working against orderly marketing.
“I don’t want to overplay the threat the board faces, but there is a bit of a break-down in the social consensus that allows the board to operate,” said Bob Roehle, director of corporate communications for the board.
“A whole lot of things have come together at once and created a situation that we’re reeling from.”
Roehle believes much of the criticism aimed at the board these days stems from a combination of factors: prolonged economic downturn; the U.S. Export Enhancement Program which makes domestic U.S. prices higher than Canadian prices; the threat of trade retaliation by Canada’s competitors; and two consecutive bad crops.
He said the board is not faultless.
Farmer discontent with the board in Manitoba this year stems from its handling of the fusarium wheat issue. Officials have since acknowledged at farm meetings that the board could have done better.
But although marketing clubs harbor some of the board’s biggest critics, Roehle said he views the marketing club movement as a potential ally.
The clubs generally attract younger farmers who are well educated and eager to learn about marketing. He believes the more they learn about the international grain trade, the more they’ll come to appreciate what they have.
Support for single desk selling has traditionally stemmed from the belief that farmers lack the know-how or the resources to do the job themselves, he noted.
But “it can also spring from a very profound understanding of the nature and structure of the international grain market.”
Toews agrees. “Sometimes a little bit of information is a dangerous thing,” he said. “But I think we’ve got to get past that first level …. to really understand what this game is all about.”
