After years of uneasy relations with the Ontario Wheat Producers’ Marketing Board, private grain buyers are relishing the opportunity to take over wheat marketing in the province.
Growers are now able to sell their wheat either to the board or to private traders.
Private wheat buyers are aggressively outbidding the board’s contracted and pooled price and it’s expected that about 75 percent of the province’s record 2.2 million tonne wheat crop will be sold off board.
One of those buyers is Lynne Cohoe, who runs Homeland Grain, a small elevator company in Burgessville, about 50 kilometres east of London.
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“I don’t believe the board can compete with the elevator system,” she said, adding there are lots of reasons why the private trade is going after wheat so hard.
Part of it is simple economics.
The elevator business in Ontario is highly competitive and all companies need to handle as much grain as possible to finance their multimillion-dollar investments.
Part of it is customer relations.
Good deals and good prices are crucial to keeping their customers happy and coming back not only with their wheat but also other cash crops such as corn and soybeans.
And part of it is, for lack of a better word, revenge.
“The wheat board has always tried to promote an adversarial relationship between themselves and grain dealers,” she said.
“That was their justification for their existence.”
She said the board always tried to portray the private trade as the farmers’ enemy. Dealers took a lot of abuse in dealing with the board over the years, she added, and there always seemed to be problems with paperwork and payments.
Now that they have a chance to operate freely in the wheat market, those same dealers are anxious to show they can do a better job than did the board and take away the board’s traditional business.
Convenience is an-other factor.
Most farmers grow wheat for straw or for rotational purposes and because of the board system, have never devoted much attention to marketing.
But they’re used to selling their corn and soybeans on the open market and feel comfortable doing the same with wheat.
“So now when I buy their corn or soybeans from him, he says, ‘why don’t you just sell my wheat, too,’ ” Cohoe said.
“When he sees that opportunity, and the price is better and he can get his money immediately, that’s what’s going to happen.”
Despite the record crop, wheat prices in the province have held up well, due to a combination of a slow harvest, strong demand and a lot of wheat going into on-farm storage.
