Western Canadian farmers need market and price transparency to succeed in an open grain market.
An increasing number of farmers have spent the money to hire marketing advisers and subscribe to market newsletters since prime minister Stephen Harper’s government ended CWB’s marketing monopoly.
However, there are data gaps that make it difficult even for professionals to analyze and understand the Canadian grain market.
Farmer frustration over the issue is illustrated by a resolution at a Keystone Agricultural Producers meeting in Manitoba this fall to lobby the federal and provincial governments for more transparent grain price reporting.
Read Also
Agriculture needs to prepare for government spending cuts
As government makes necessary cuts to spending, what can be reduced or restructured in the budgets for agriculture?
As one KAP member noted, a clear picture of grain cash prices is hard to get. Some companies publicly post their basis and cash bids online. Others reserve that information for clients who have an account. Farmers can spend a lot of time searching the web and calling around to elevators to determine which company is offering the best prices.
The discussion at the KAP meeting noted that the U.S. Department of Agriculture collects cash prices in some states from elevators that voluntarily participate and publishes regional price reports, providing a helpful benchmark.
A similar system in Canada would be welcome. Government could run it or the industry itself could take the initiative, perhaps through the Western Grain Elevator Association.
Companies now unwilling to publish prices at a particular station should be willing to contribute data for regional price benchmarks or ranges.
However, much more information should be collected and made public on a timely basis to help illuminate the market, identify problems and give farmers the ability to make smart marketing plans.
The Canadian federal government should emulate the U.S. Department of Agriculture’s role in collecting and publishing data on grain exports.
In the United States, grain companies must report the volume of every major grain export sale. The USDA maintains a tally of these sales and also the volume that is actually shipped. It reports the data weekly.
This allows traders, analysts and farmers to determine if the USDA’s export target will be met. Prices will likely weaken if sales are disappointing and rise if they are running ahead of expectations. Farmers can use this knowledge to better time their sales to maximize revenue.
In Canada, the export data provided by the Canadian Grain Commission and Statistics Canada cover only grain shipped and not the amount already sold for future shipment.
Also, in the case of Statistics Canada, the data is about two months old when it is published, which greatly reduces its value.
The USDA also publishes daily port grain export bid, while Agriculture Canada publishes port prices weekly.
Producers, the grain industry and government should work together to develop a list of data sets on prices, exports, domestic use and movement, which could be produced in an efficient and timely manner and made public. Greater information empowers everyone in the marketplace and makes it function more efficiently.
Any member of the grain industry that balks at this should recognize the cautionary tale provided by the railways, whose service failures and lack of information have led to farmer anger that triggered new government regulation.
Voluntary co-operation can pre-empt bureaucratic intervention.
