Richard Gray won’t miss the fighting amongst western Canadian farmers over the Canadian Wheat Board.
The University of Saskatchewan agricultural economist says the long, divisive debate distracted farmers from tackling even more financially important issues such as crop research.
Grain marketing has been a touchy issue. A farmer who declined to be interviewed likened it to a civil war where sometimes friends and family are on opposing sides.
The focus now should be on making the open market as effective and as efficient as possible, says Gray. One way is to improve the Winnipeg-based wheat futures market. As he predicted the ICE Futures contract is moribund.
“The most important thing is you want a futures market that takes the risk out for buyers and sellers,” he says. “There are lots of things that would affect the Minneapolis price that wouldn’t affect Vancouver prices.”
The ICE wheat futures contract is based on inland delivery, like its canola contract. Basing it on Vancouver delivery would show the value of Canadian wheat at port.
“Transparency has been known to reduce basis and certainly reduce the basis risk for all shippers, big or small,” Gray says.
Grain marketing adviser John De Pape is also calling for more “transparency.” He says grain exporters should be required to report sales on a weekly basis.