Oversold forward contracts ongoing issue at KAP

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Published: December 16, 2021

Many farmers priced and contracted grain deliveries in 2021-22 but yields were heavily impacted due to drought.

The Keystone Agricultural Producers (KAP) wants to help members — but sometimes finding a solution that pleases everyone is tough.

Take for example the plight of many farmers who priced and contracted to deliver more grain to elevators in 2021-22 than they produced due to the drought.

Wilfred (Butch) Harder, who farms at Lowe Farm, complained during KAP’s districts meeting online Dec. 7, that the farm organization should do more to help farmers who found themselves short mostly due to the drought.

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“It bothers me a bit… that the grain companies — we are sympathizing with them and they have taken millions of dollars from western Canadian farmers, especially G3, and now we kind of feel sorry for them if they should lose on the market and haven’t developed programs (to protect themselves),” he told the meeting.

“I just think we’re being far too lenient on the grain companies, almost like we want to protect those poor people. And I think that’s a bit of an insult to farmers.”

KAP president Bill Campbell acknowledged the financial hit many farmers are taking and how one sided some of the contracts are — a message KAP took to the Western Grain Elevators Association.

“But we honestly believe that these are contracts between individuals and companies and that it is a business decision… ” he said.

Farmers and grain companies need to improve forward contracts and be better educated, Campbell said.

“We need to have a fully functional grain industry through production, transportation and marketing so that it’s beneficial to all segments of the industry so that moving forward there will be quite a bit of interaction and conversation and some steps forward,” he said.

There are no easy answers, KAP general manager Brenna Mahoney told Harder.

“I think it’s important to recognize that this system we are operating in is all about relationships and if producers felt like they’re not being supported and they’re not feeling that the grain companies are looking out for their best interests we have work to do here at KAP,” she said. “These are long-term discussions.”

Mahoney also stressed KAP was having those discussions with “the right parties” and would have an educational presentation from Meyers Norris Penny during its AGM on the topic.

“This is something that we will absolutely be actioning,” she said.


For more content related to drought management visit The Dry Times, where you can find a collection of stories from our family of publications as well as links to external resources to support your decisions through these difficult times.

About the author

Allan Dawson

Allan Dawson

Contributor

Allan Dawson is a past reporter with the Manitoba Co-operator based near Miami, Man. He has been covering agricultural issues since 1980.

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