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Farmers facing grain marketing decisions

More choice carries higher risk

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When planting crops each spring, grain farmers have to gamble on good growing conditions. Now, they also have to take a chance on their marketing strategies.


"It’s what you’re comfortable with and how you can sleep at night," said Starbuck farmer Chuck Fossay.


For the first time in their lives, Western Canadian wheat and barley growers have the power to decide how to market their grain.


The Marketing Freedom for Grain Farmers Act officially ended the Canadian Wheat Board’s 77-year monopoly on wheat and barley as of Aug. 1. The act gives farmers the freedom to choose how they sell this year’s crop.


While the majority of Manitoba wheat and barley growers supported the board’s monopoly, not all of them are expected to use the new CWB’s pooling options. Sign-up for the CWB’s early delivery pool closed on Oct. 2.


A CWB spokesperson said while the amount of grain committed to the pool can’t be made public, it was satisfactory. The sign-up deadline for wheat, durum, barley and canola in the CWB’s Harvest Pool is Oct. 31.


Fossay said the current strong prices created by this summer’s drought in the American Midwest will benefit Manitoba farmers, but he still plans to hedge his bets.


"I’m going to market half my grain through the CWB and half through other means," he said.


Brad Rasmussen, who also farms near Starbuck, said he has been watching the market and hasn’t made a final decision on selling his grain.


"We’ve not committed all our wheat yet," he said.


Now that the CWB has some grain to market, its sales staff can start selling to international customers, many of whom have long-standing business relationships with the former Canadian Wheat Board. As in previous years, farmers who have signed up for the pools receive an initial payment for their grain, and additional payments depend on sales agreements.


In August the CWB announced that it will market canola. Vice-president of grain procurement Gord Flaten said the company’s canola marketing manager knows the market and there is overlap with customers for the CWB’s other grains.


Fossay said the pooling system could work well for canola since the canola market is more volatile and it’s harder for farmers to stay up-to-date on market conditions.


"We’re too close to the product to be best at predicting prices," he said.


Fossay added that getting the best possible price for wheat requires farmers to know their grain’s grade and protein level so testing is essential. Most of this year’s crop is high-quality, but testing becomes even more important when low-quality grain is harvested.

 

andrea,geary@canstarnews.com

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