The big grain companies today would no doubt like to do the same. They would like farmers to focus on growing the crop and leave the grown-up marketing decisions to the grain companies. Just haul it to them whenever and let them worry about it.
It’s been mostly better for those companies in the post-CWB days, with not only no board to complicate things but also so few substantial competitors that the three mainline companies are an effective oligarchy.
Preventing that oligarchy from having complete control are the traditional medium-sized players, such as Paterson, and Parrish and Heimbecker, plus the new players who have stormed into the western Canadian market post-2012.
Those new players comprise everything from those with substantial grain-handling assets, such as G3, to single-site connections to foreign grain companies, to all sorts of grain merchants who try to wheel and deal Canada’s crops.
It’s a frothy marketplace out there still, and the operators of one of the online grain marketplaces believes they’re helping that to survive and thrive.
“There are always new entrants,” said Mike Witkowicz, the vice-president of Ag Exchange Group, when we met recently to chat about the evolution of the western Canadian grain marketplace.
“There are going to be more.”
I’ve been thinking about the online marketplaces in the wake of a widely read blog post from an American grain marketing platform that declared that the online grain marketplace was dead and a more orderly marketing mall (his) was taking their place.
I think what annoyed me about the argument was the sense that somebody was suggesting that the messiness of the grain market was a problem, and that he could clean it up and make it nice and tidy.
One of the features I’ve admired most about the free markets in crops I’ve been lucky enough to bear witness to has been the mess, the frothy ferment, the riotousness inherent in free markets. Sure, they can be a mess. So can be much of life in a liberal democracy. But that mess is where new ideas, new approaches are born. I’d hate to see anybody clean up or organize the primordial mess of our grain markets too much.
That’s why I think I have a soft spot for the online grain marketplaces. I get the sense they are helping that mess to get messier, and for the ferment to get frothier.
Witkowicz thinks that’s what they’re doing, especially with the outsiders who have been trying to enter the walled garden of Western Canada.
“The growth of our marketplace was connecting the smaller buyers who didn’t have the network (of buyers, handlers and facilities) into a network,” said Witkowicz, a long-time operator in Canada’s grain markets.
“They didn’t come to build a business with 100 grain originators.”
They’ve also given a way for small grain merchants to find suppliers (farmers), and for farmers to find markets that actually want their small crops, off-grades and specific sub-classes.
I know a lot of people look at the online markets. Many use them for price discovery and nothing else. Others use them to transact business.
I like them being part of the mix. Farmers like their marketing freedom, and that’s not a reference to the CWB.
“Nobody owns the farmer,” Witkowicz observed.
That’s true, and that’s why I think nobody’s ever going to have one marketing approach, one system, one portal-of-portals that satisfies everybody.
Good ideas and new approaches are always welcome. But not too many farmers are looking for somebody to come to them and make everything simple – their way.
Markets can seem like a mess, but let’s hope nobody ever manages to make things too tidy. Freedom isn’t tidy.
