It has become abundantly clear that accurate information is a fundamental requirement of efficient Canadian grain markets and infrastructure systems.
Lack of information contributes to rail transportation problems and the failure of markets to arbitrage to eliminate mispricing and return to fair value.
The move to an open market in wheat and last year’s cold winter, which led to transportation backlogs, have identified information shortfalls in Canada’s rail and market infrastructures.
And so congratulations are in order to those who are trying to fill in these shortfalls, providing the light that will reveal where things are broken and the solutions to fix them.
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?
The Ag Transport Coalition, a group of grower groups, grain company associations and processors, recently published its first report on rail performance.
Another step forward is the Crop Data and Price Reporting project launched by the Alberta Wheat Commission. Its intention is to develop a web-based tool — Price & Data Quotes with the delightful acronym PDQ — that will provide information on cash grain prices as well as data on grain movement and trade.
Ottawa is providing welcome financial support to both these initiatives.
To prepare its weekly report, the Ag Transport Coalition hired QGI Consulting, a company affiliated with Quorum Corp., the federally appointed monitor of Canada’s grain handling and transportation system.
It will be the first performance measurement independent of government and railway data.
Its first report shows there is still a significant 11 percent shortfall between the number of rail cars that shippers order and the number that railways deliver.
As well, there is a lack of timeliness in the delivery and pick up of cars.
This tracking will help put shippers and the railways on a more equal footing when negotiating ways to solve problems and assess responsibilities.
The data should also help paint a fuller picture of the challenges the transportation system faces for the federal review of the Canada Transportation Act, which is now underway.
The Crop Data and Price Reporting project should provide similar benefits for the effort to make Canadian grain markets more transparent and fair.
Farmers now find it difficult to determine where the best prices are for their crops and to assess the fairness of a country price compared to the port price.
Major companies post cash prices on their websites but, particularly in wheat, the way those prices are determined appears artificial when related to American futures exchanges that are priced in U.S. currency.
There is also the continuing irritation that American wheat prices appear to be significantly better than Canadian prices.
We hope all grain buyers co-operate with the data and price reporting project. Otherwise, its effectiveness and value to farmers will be sorely diminished, just like the new ICE Futures wheat, durum and barley futures contracts, which languish in irrelevancy because the companies do not use them.
Agriculture minister Gerry Ritz says there is no mandatory stick to make grain companies co-operate with the project. Through his initial statements, he appears to hope that the expected popularity of the site will encourage broad participation.
However, if that fails to materialize, we hope he will use his bully pulpit to make it clear to the big grain companies that participation is in their interest if they want to avoid more government oversight.
