The CWB And NAFTA: Hillary Clinton And Barack Obama Weigh In

Markets continue to pound away this week.  I’m sure it’ll be ditto next week too, as traders armed with their computer driven algorithms try to find a price, which will buy grain and oilseeds.  This year’s version of the “mother of all USDA reports” comes at the end of March.  To some its big news, to other’s its comic relief.  Let me tell you now.  We don’t have enough of anything this year to satisfy demand.  With that in mind maybe Canadian farmers should be watching the value of that loonie.

Loonie you say?  I’m sure some of our American friends would say what’s that, just like many Canadians would wonder about the “Sacagawea Dollar.”  It’s funny we’re great friends on both sides of the 49th parallel, but sometimes a little titter on one side of the line causes a calamity in Canada.  Case in point was last week’s Ohio musings between future Presidents Hillary or Obama on what they’d do with NAFTA.  Both cried foul about NAFTA with President Hillary being particularly outraged saying she’d demand changes to some very core issues.  Although this caused nary a titter in the US, Canadian politicians were huffing and puffing like the War of 1812 wasn’t over.  We even had some bizarre calls for Canada to cut off oil from the US.

The fact is Canada exports more crude oil to the United States than anybody else.  Our American friends might think its Saudi Arabia, but its not.  NAFTA guarantees our American friends that our natural gas and oil comes to them without export controls or tariffs.  So President Hillary or President Obama wants to renegotiate?  Hmmmm, something tells me the real complaint is with Mexico.

However, from a Canadian perspective, everybody take Valium and forget it.  President Hillary or Obama will do what they want just like every other American administration.  We’ll huff and puff for a few days, then we’ll do what they want.  It won’t even register a nano-decimal on the Richter scale down south.

What may be more significant to farmers this past week was the court decision lost by our federal government regarding giving marketing choice by taking malting barley out from under the Canadian Wheat Board.  This essentially forces the federal government to table a bill in Parliament to force the CWB’s hand.  I’ve always maintained that’s “dead in the water” politically because all the opposition parties are against it.  In our minority parliament, it’s a non-starter.  Stephane Dion told me last summer he’d defeat the government over it.

However, last summer was a long time ago.  We saw last week Stephane Dion and the Liberals couldn’t bring themselves to defeat the government’s budget.  They were widely panned for that.  So now, I cannot see them falling on the sword for the Canadian Wheat Board.  I expect the bill to be introduced shortly and barley will find a home outside of the CWB.  I expect wheat to follow but with a lot of politics involved with both of these scenarios, it’s all even money.  There will be no guarantees until there is a majority Conservative government and in our present political environment, that’s not going to happen.

I’m always on “thin ice” when I comment on the Canadian Wheat Board.  That’s because I’m an Ontario guy who sells his wheat for any old price I prefer.  In Quebec it’s a single desk and of course with the Canadian Wheat Board, it’s the same thing.  One Saskatchewan reader told me once I needed to talk to people at an elevator in the west to get a true picture of the feeling.  I didn’t do that, but I did spend time in Alberta and I did talk with quite a few farmers who dealt with the CWB.  To say the least the air was blue.  As one Tisdale Saskatchewan farmer once told me, the CWB brings everybody down to the lowest common denominator.

What makes this issue even a bigger deal is the value of wheat.  In Ontario that’s $7 or $8 for new crop and $10 or $11 if anybody has some old crop.  However if you are in Quebec or in Western Canada the price of wheat is some “nebulous idea” behind a layer of marketing bureaucracy, which is not easily changed.  As producers look across the western border and see American wheat prices, feelings run wild.

Keep in mind if that border wasn’t there, wheat prices in North Dakota; Montana and Minnesota wouldn’t be so strong.  But, in fact, the border is there and it continues to represent both a political and economic divide and if this past week means anything, a deep cultural divide.  When President Hillary or Obama takes office we’d better hope they realize there is a border there too.

(——-For those of you wondering the Sacagawea dollar is an American Dollar coin, which debuted in 2000.  Sacagawea was an aboriginal woman who helped Lewis and Clark)