Initial payments for Canadian Wheat Board grains probably will increase before the end of the month, CWB minister Ralph Goodale indicated last week.
Farmer representatives said Monday higher initial prices would be good news, but they criticized the government’s handling of the issue.
Saskatchewan Wheat Pool president Leroy Larsen said there should be no more delay in increasing prices: “I think any delay is unnecessary. An increase in initial prices should already have happened.”
Western Canadian Wheat Growers Association president Larry Maguire said the current level of prices is unjustified, bearing “no correlation to prices in the market.”
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Goodale said in an interview the government will make a decision on CWB recommendations for higher prices “before the end of September” and he expects it will be for an increase.
Board recommendations in late August were for sharp increases in the initial prices that took effect Aug. 1. Agriculture and finance department officials have been analyzing the new price estimates.
“I haven’t yet had the benefit of my officials’ work on it but that would certainly be my intention (to announce higher prices),” Goodale said.
“The level at which prices started for this current crop year is obviously a level no one can be happy with … . It is everyone’s objective to have the initial payments at the highest possible levels without running the risk of a price reversal later in the year that could create a deficit.”
He said if his planned reforms to the Canadian Wheat Board Act go through this Parliament, the new board would be able to increase initial prices faster than is now possible.
“It would probably have the impact of shaving … two to three weeks off the time frame (for increases), which means money in farmers’ hands faster,” he said.
Maguire said the lower-than-necessary prices “have created a lot of stress for farmers. And even if prices go up, there still is going to be a cash crunch for a lot of farmers on the Prairies this year.”
Mix good news and bad
He said some of the farmer anxiety might have been eased if the government had announced protein premiums at the same time it was announcing the sharp drop in initial prices for the new crop year.
“I think that was a real flaw in how this was handled.”
Reform party agriculture critic Jay Hill said the lower prices reflect undue caution by the wheat board, even though he said the board must be careful not to set prices higher than the market returns.
“But I really thought they were being overly conservative and the farmer is being asked to pay for that conservatism,” he said Sept. 8. “The government should have moved before now to get the price up and some confidence back.”
Meanwhile, both Maguire and Larsen agreed few farmers have sold grain in the five weeks since the lower prices took effect.
Maguire said many Manitoba farmers have been selling canola and peas as a cash crop, waiting for wheat prices to increase.
Larsen said in Saskatchewan, elevators in many areas remain plugged with last year’s crop.
“I don’t think producers have been waiting voluntarily for the initial price to increase,” he said. “There just hasn’t been much room to deliver into.”
