Information is power, and producers want some

Information is power, and producers want some

Western Canadian farmers are asking commodity buyers to hand over export sales information. Maybe they should ask for even more.

It is often difficult for farmers to determine whether the price offered for their commodities is a good one. There are a lot of farmers and only a few buyers. It has always been so, but Canadian farmers used to have more tools at their disposal to level the playing field.

The Canadian Wheat Board, farmer owned co-operatives, the prairie pools and the Winnipeg Commodity Exchange were among those tools. Price discovery wasn’t perfect but it was something. Those days are gone.

In Western Canada we now have many players building, investing and ultimately competing for farmers’ grains and oilseeds. Companies are paying for all their investment with margins earned from farmers.

Western Canada’s history of co-ops, pools and the wheat board is the reason farmers don’t have the same level of information that is available to their American farming counterparts. Robust price reporting wasn’t deemed necessary by our federal government.

Though there are more companies in Western Canada that buy crops than there were 20 years ago, it still isn’t many so as buyers, they hold all the cards. They know how much product is available and who has it, and they likely have a pretty good notion of what any farmer might sell it for.

That isn’t a good situation for sellers, especially ones who compete with a heavily subsidized neighbour across the international border.

In the U.S., farmers receive sales reports, export reports and prices, in real time, from most commercial sales of agriculture products. It’s the law down south and has been, in some cases, since 1946.

Last week farmers in southern Illinois, for example, knew how many of their soybeans were purchased in the previous week, the oil and meal yield per bushel in pounds, the market value of those fractions and what the elevators paid for a bushel of the crop. All of that is due to mandatory reporting to the U.S. Department of Agriculture’s Agricultural Marketing Service.

In that report farmers found that crushers should have had a margin of about US$1.63 per bushel. Last week it was $1.34 and one year ago it was $1.82.

The actual margins for each business aren’t reported to the public. The system reports the data for statistical information only. However, it gives farmers an idea of how their buyers should be doing and whether they, as producers, are getting their share.

The American real-time sales reporting also shows how much of the crop has been delivered, how much is sold for export and shipped and, by extension, an estimate of how much is in the countryside.

The all-important rate of sales is critical to understanding the level of demand for farmers’ inventories. There is no six-week delay in information, as there is in Canada, and there is a much broader supply of data.

Many of the companies doing business in Canada also trade in the United States, so Canadian farmers who are now requesting more sales details at home shouldn’t tolerate complaints about compliance problems.

What information should Canadian farmers be receiving? The same information as their free-market American competitors would do nicely. In fact, nothing less should do.

Those curious about what American farmers have to work with can check

Karen Briere, Bruce Dyck, Barb Glen and Mike Raine collaborate in the writing of Western Producer editorials.

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