Qualman is director of research for the National Farmers Union.
On July 31, the Federal Court ruled that government moves to terminate the Canadian Wheat Board’s single-desk mandate over barley violated the law; barley would stay under the board.
In the days that followed, many, including the prime minister, told us barley prices fell as a result of the ruling. One hundred percent wrong. The data clearly shows that the price of barley did not fall as a result of the court decision.
While prices did decline in the days after the decision, those early-August declines merely continued ongoing and consistent declines that had been underway for nearly eight weeks.
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Further, and this is key, the eight-week long downward trend in barley prices does not correlate at all with the July 31 court decision to retain the CWB’s single-desk. If that eight-week long decline correlates with anything, it correlates with the government’s announcement of its Cabinet Order to terminate the CWB’s single desk.
The accompanying graph shows Lethbridge cash prices for barley. The data is compiled by Agriculture Canada.
The highlighted data point near the right-hand side of the graph is July 31, the day the court ruled to retain the CWB’s single-desk for barley. The highlighted point nearer the middle of the graph is June 11, the day then-federal agriculture minister Chuck Strahl announced the “market choice” Order-in-Council regulations. The graph shows us the following:
- Cash prices rose for just four days following the government’s June 11 market choice announcement, before going into a sustained eight-week decline beginning June 15.
- Prices were already in mid-decline on July 31, the day of the court ruling.
- The beginning of the cash price decline correlates most closely with the government’s announcement that it intended to strip the CWB of its single desk (with only a four-day lag); there is no visible causal link to the court decision, no visible correlation.
- In June and July, falling U.S. corn prices put downward pressure on barley. Analysts were predicting corn-related barley price declines well before the court decision. ÂÂ
- One week after the July 31 decision, the eight-week price decline ended and markets surged upward.
- Prices today (Sept. 11) are far higher than they were on July 31, the day the court ruled that the CWB’s barely single desk would stay.
Days after the government announced its Cabinet Order to terminate the CWB’s barley mandate, an eight-week long barley price rise ended and an eight-week long decline began.
That’s the true story.
